Cabot Wealth Advisory for 04/2016
Alcohol Stocks, Tobacco Stocks and Firearms Stocks, Really
I did a little research and a little calculating, and found that a portfolio with three alcohol stocks, three tobacco stocks and three firearm stocks would actually have enjoyed some great returns over the year since April Fool’s Day 2015.
Cheap Stocks vs. Growth Stocks
Everyone knows what a cheap stock is. Or do they? To some people, a cheap stock is one that is low-priced, like SunEdison (SUNE), currently trading at less than a dollar per share. People who like these stocks generally don’t have a lot of money to invest, and they like the fact that they can buy 100 shares of stock for less than $100 (plus commission). To other people, like Warren Buffet, a cheap stock is one that is selling at a price that’s below its true value.
One Small-Cap Stock that Could Be the Next Salesforce
Small caps will outperform large caps in 2016. Given that small caps outperform over the long-term, yet have underperformed large caps for two consecutive years (2014 and 2015), and have fallen so much year-to-date, I see solid potential for small-cap outperformance over the next 12 months.
3 Clues for Potential Growth Stock Breakouts
Today, I want to describe a simple but powerful chart pattern that can help you identify low-risk entry points, or at the very least, inform you that the stock is acting properly. I’m talking about tightness in a stock price’s movement, and I’m seeing a lot of it these days.
The Dirty Little Secret of the Financial Industry
The rule changes for financial advisors that came out on Wednesday created a modest stir in the financial industry. While there are over 1,000 pages in the new guidelines, the one change that hit a nerve was a requirement that anyone who gives investment advice for a fee has to act with the client’s best interests in mind.
Tesla Motors vs. Toyota Motor
In the 10 days since Tesla Motors (TSLA) unveiled the prototype of its Model 3 sedan, more than 325,000 people around the globe have put down $1,000 deposits for the car. That’s more than $325 million in Tesla’s coffers, which the company gets to keep for more than a year; deliveries of the $35,000 four-door sedan won’t begin until late next year.
Are All of the Highest Paying Dividend Stocks High Risk?
In recent years, high paying dividend stocks have become incredibly popular with retired investors—and baby boomers too. Adding a few of the market’s highest paying dividend stocks to your portfolio can be a huge help in generating regular income in today’s ultra-low yield environment. But many investors don’t realize how much risk is inherent in most of the highest paying dividend stocks.
Spotting the Fast Growing Small-Cap Stocks
Small cap gold stocks have been on fire in 2016. Many are up 50%, 100% or more. It hasn’t mattered much if the company is a profitable gold producer or a pre-revenue gold explorer. If it has anything to do with gold, it’s probably gone up. I monitor a watch list of small-cap gold stocks. And these five are up over 100% so far this year.
Earnings Time for Facebook: What to Do with FB Stock?
Facebook (FB) will report its latest quarterly results next Wednesday, April 27, after the market closes. And you can bet that people will be paying attention. When your company has a market cap of nearly $322 billion, a float of 2.2 billion shares, coverage from 49 analysts and over one billion active users per DAY (!), people tend to pay attention.
Gold Stocks and the Fear Factor
The focus of today’s column is gold, particularly the environment that makes gold stocks, gold ETFs and even gold bullion attractive to investors. For some readers, the highlight will be the 10 gold stocks I'll discuss.
Why Hedge Funds Lost in Pfizer-Allergan
Many traders and large hedge funds trade strictly in merger arbitrage. These traders look at deals that have already been announced, and examine the deal terms and the levels the stocks are trading. If they think the chances of the merger going through are great, but the stock being acquired is trading below where it "should," they see opportunity and will often buy shares (or call options or take some other bullish position). In the case of Pfizer-Allergan, there was plenty of "opportunity."
Three Growth Stocks in the Strongest Sector
Construction stocks, especially those tied to infrastructure (whether it’s residential, commercial or municipal), have been thriving since the market put in its early February low. Here are three names I like the most.
Want Gold? Think Silver!
Gold is hot right now, that’s for sure. It’s in the headlines and has been contributing to beautiful stock charts since the beginning of the year, which is nice for the diehards who have been predicting its resurgence for years (through gritted teeth). Suddenly, everyone wants to invest in gold. But there’s an even bigger opportunity in silver.
Are You a Growth or Value Stock Investor?
I was at a cocktail party recently, and a friend who’s a hotel manager asked what stocks I was recommending now. In return, I asked, “What kind do you want—big and undervalued, that will appreciate in the long term, or smaller and faster-growing, that are likely to bring you more action, and more risk, now?” He chose the former, bigger and slower with low risk, so I suggested these two stocks.
2 Strategies to Find Leading Value Stocks
The two strategies that I use to find consistent winning stocks involve evaluating sales and book value. I prefer sales and book value rather than earnings, because earnings fluctuate wildly and are often engineered, using an endless system of “adjustments.” Valuations based on sales or book values are more reliable when assessing the past, present and future prospects for companies.
The One Thing You Can Do that Warren Buffett Can’t
Everybody (including me) loves Warren Buffett. He’s rich. He’s a major philanthropist who actively exhorts other rich people to give away their money. And he looks like an ideal grandfather ought to look: gray, smiling and enjoying life. But I do think Warren Buffett has a little bit of a regret, and it’s this ...
Another Dire Stock Market Prediction: Whoopee!
McKinsey & Company is a big consulting firm—9,000 consultants and 2,000 researchers around the world—that companies hire when they need advice. I get research reports from McKinsey every once in a while, and they’re usually beautifully designed, well written and interesting in an abstract kind of way. The report that reached my email in-box on Thursday had the intriguing title: “Why investors may need to lower their sights.” (Note how the avoidance of Capital Letters makes things a little edgier; that’s the McKinsey Difference!) It took seven people to write this little piece of analysis, so you know it must contain really valuable information.