Cabot Wealth Advisory for 03/2016
The Clinton-Sanders-Trump Effect on Wall Street
Criticizing Wall Street and major U.S. companies—especially pharmaceuticals—is very popular these days. For Hillary Clinton, Bernie Sanders and Donald Trump, the evils of Wall Street, the major banks and the drug industry are very popular talking points on the campaign trail. And perhaps in reaction to this negativity, leading bank stocks such as Goldman Sachs (GS) and Bank of America (BAC) are down 14.50% and 20% respectively just this year.
5 Tips on Finding Leading Growth Stocks
The real question for many investors is: “How can I, an individual investor, find leading growth stocks?” These are the people who want to do the work themselves. So here are 5 tips on finding leading growth stocks.
Five Ways to Increase Your Profits
Long experience has taught me that the number-one thing subscribers want from Cabot is stock tips. They want the name of the next Apple (AAPL), the next Netflix (NFLX), the next Amazon (AMZN). But what I’ve discovered is that many people, even when presented the right stocks, don’t know how to handle those stocks properly. So today it’s back to basics. Today, I’m presenting five ways to increase your profits and reduce your risk.
The Most Consistent Growth Investing Trend Ever?
At its essence, growth-investing success comes down to playing the right trend, at the right time, and with the right stocks. The bigger and the more durable the trend, the better. And one of the most durable growth trends is giving to charitable causes! It’s not rampant growth—it grows a couple of percentage points faster than GDP—but it’s consistent.
Costco (COST) vs. Apple (AAPL)
Costco has demonstrated consistent growth, growing revenues and earnings in each of the last five years. So should you buy Costco stock today? Before I answer that question, let me tell you a story. It’s about Apple (AAPL), possibly the most loved, most well known company in the world.
3 Challenges to Your Saving Strategies
I get a little impatient with people who say they are “saving” for retirement. If someone is saving, I assume that they’re putting the money in a bank savings account, CD or other insured, interest-bearing account. They may also be buying Treasuries or other high-quality bonds. These are the only genuinely safe options for saving money.
A Valuable Lesson about Cyclical Trends
My wife and I recently returned from a long trip to Australia (where a niece married an Aussie) and New Zealand, a trip that included waypoints in Los Angeles and Tahiti. I got some great ideas for stories, the first of which I’ll share with you today. It starts with our visit to The Broad, a museum in Los Angeles whose name rhymes with “road” — or “rode”— or “rowed.”
2 Crucial Growth Investing Skills
One of the most interesting parts of my job is answering questions from subscribers, mostly about growth investing. The questions I get tell me an enormous amount about how investors are thinking, what they’re worrying about and how they’re handling market conditions. Here is a question I got last week, and the answer I sent back.
10 Value Stocks Due for a Comeback
There are hundreds of undervalued stocks in the market today. I have listed 10 high-quality companies that have been beaten up badly, but will likely recover during the next 12 months. All 10 of the stocks in my list are rated as undervalued by Standard & Poor’s, and each stock is rated above average quality by S&P.
TOGA Stocks: The Ones that Got Away
My topic today is what I call TOGA stocks, which stands for The Ones that Got Away. I got an email a few weeks back from an acquaintance who is still beating himself up because he didn’t buy Cisco Systems (CSCO) at 10 cents per share (split-adjusted) in 1990 and sell it at 80 in 2000.
Oil Prices, What Next?
Today we start with a discussion of oil prices, starting with the chart published in January 2015, which shows that oil prices, after building a long plateau in the $110 per barrel range, plummeted to $50 per barrel in late 2014.
5 Years of Biotech Outperformance
I have no idea if the biotech sector is near a bottom, but based on history, it would seem that we’re within 10% or so of that mark. The greatest risk seems to be that the binary outcome possibilities for developmental-stage biotech stocks (either fail or succeed) don’t mesh with investors’ risk appetite right now.
A New Leading Growth Stock at New Highs
Most growth stocks are still on their launching pads, which I think is a good thing, at least for now—if the market strengthens from here, my guess is we’ll see some rotation into exciting new growth ideas. That said, I’m also seeing many “follow-on” opportunities in growth stocks—names that soared to new price highs in recent weeks (often following a great earnings report) and have since traded very tightly on light volume … a constructive sign that higher prices are ahead.
Where Is Alibaba Stock Headed?
In August 2014, financial sites were flooded with news about Alibaba (BABA), the Chinese online marketplace whose IPO turned out to be the biggest in history. It got a little crazy, frankly, with endless commentators analyzing fundamentals, market penetration, leadership, strategies, threats, competition and everything else imaginable about Alibaba. Founder Jack Ma became a familiar face, even for people who weren’t hanging around the business end of news sites.
An ‘Earth-Shattering’, Low-Risk Dividend Stock
Are there any compelling investment opportunities in New Zealand? Given that the country’s economy still has a large agricultural component, and that a “brain drain” has been a problem in recent decades, no. On the other hand, the complete collapse of commodity prices around the globe in recent years does make me eager to spot a nascent uptrend in despised commodities that have been discarded in the panic selling of recent months.
Chinese Stocks on the Rebound
Right now, I think there are some very convincing signs that Chinese stocks, which have been about as popular as used gym socks for a number of years, are about to turn around in a massive way. One Chinese social media giant in particular seems to be gaining momentum.
4 Investing Maxims For More Profitable Investing
For a growth stock investor like me with a sense of history, investing maxims help a lot; I often think of one when I'm in an investing rut, or when the market is a bit confusing. However, my only beef with all of these maxims is that there's only so many times you can hear the basic ones like "cut losses short" before your eyes glaze over. So what I’m doing today is adding some “how” to the “why and the what” of those basic maxims, offering some ideas about how to actually implement them.