Stock Market Analysis Video 4/23/2010
Editor Mike Cintolo discusses the market's recent volatility and its relation to earning seasons. He looks at the charts of stocks which have released earning reports, including Tupperware Brands (TUP), Tempur-Pedic (TPX), VMWare (VMW), F5 Networks (FFIV), Netflix (NFLX), Cree (CREE).
Vice President of Investments, Editor of Cabot Market Letter and Cabot Top Ten Report
A growth stock and market timing expert, Michael Cintolo is editor of Cabot Market Letter and Cabot Top Ten Report. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Perhaps most notable was his development of the proprietary trend-following market timing system, Cabot Tides that has helped Cabot place among the top handful of market-timing newsletters numerous times. Cabot Market Letter is one of only nine newsletters included in Hulbert Financial Digest's 2010 Honor Roll for performance in up and down markets, and Timer Digest Top Ten Long-Term Timer.
The Most Lucrative Phase of this Bull Market is Beginning Now!
Dear Cabot Wealth Advisory
I usually don’t write this
kind of letter, as I prefer doing what I love to do--picking stocks,
timing the market and helping my subscribers make money. But I
put together this special write-up because I feel strongly about the
following: The most lucrative phase of this bull market has just
begun! And if you identify and invest in the market’s best leading
stocks--not just the myriad also-rans that are touted online and on
TV--you’ll stand to make big, big money.
Why do I say this?
and foremost, because of what I’m actually seeing in the market …
and my knowledge of market cycles going back 75 years. In a nutshell,
2008 was the year of the crash; we’ve seen such declines only a handful
of times in history. And every time, the following year (2009
in this case) was the year of the turnaround stock--that is, the stocks
that fell 90% or more during the crash rebound strongly for many months.
(Think Bank of America, Goldman Sachs and some of the beaten-down commodity
However, it’s what happens
next that really excites me. It turns out that, following the
big “rebound” year, the market historically gets back to “normal”--the
turnaround stocks of the prior year calm down and generally meander
sideways. But the best leading growth stocks go through the roof!
And true to history, I am now seeing literally dozens of top growth
stocks in many sectors advancing on powerful volume … a clear sign
that deep-pocketed institutional investors are buying hand over fist.
Many of these stocks are so strong they can’t pull back for more than
a day or two before getting up and running again!
But beyond the action of individual
stocks are the signals from my time-tested market timing indicators--the
same indicators that had my subscribers averaging 50% cash for the entire
bear market (including 90% in early September 2008, just before the
crash) and that gave fresh buy signals in early April 2009. These
indicators are unanimously bullish right now, and some of them point
to much higher prices down the road.
For instance, as of March 17,
a full 90% of the 1,500 stocks in the S&P indexes (including the
small-, mid- and large-caps) were above their 10-week moving average--a
very rare blast-off signal that almost always leads to double-digit
gains in the major indexes within six months. A similar signal
was flashed last year, leading to huge gains, and before that it was
last seen in June 2003 … just as the market was set to rip ahead for
Moreover, traditional measures
of market breadth--things like the number of stocks hitting new 52-week
highs--are hitting their best levels in years. That has never
(never!) happened within a few months of a major top.
Thus, the evidence is clear--this
market is heading higher, and it’s not the beaten-down stocks from
2008 that are leading the way. It’s the true growth stocks that
have great sales and earnings, that are in leading fast-growing industries
and, most important, that have revolutionary and unique products or
services that are changing the way we live and work. How can you
discover such stocks? I suggest Cabot Market Letter, our flagship
newsletter that has, for the past 40 years, picked most of the best
leading stocks of every market cycle.
Now, granted, I am a bit biased--I’m
the editor of the newsletter! But I can say that Cabot Market
Letter’s track record speaks for itself; it’s not so much my stock-picking
ideas as much as Cabot’s stock-picking system, which has been refined
and improved over those 40 years to be able to spot the true leaders,
and to know the best times to buy (and buy more), hold and sell.
That’s why, going back to
the 1970s, Cabot Market Letter was able to uncover the leaders of each
cycle, whether you’re talking about American Medical Systems and MCI
Communications back in the late 1970s and early 1980s (up 1,097% and
295 %, respectively), or SafeCard and Triangle Industries (both rose
more than 150%) in the late 1980s, or American Power Conversion and
Summit Technology in the early 1990s, or Yahoo!, Amazon.com, JDS Uniphase
and Qualcomm in the late 1990s.
The success has been even more
pronounced during the past decade, despite the market’s horrendous
ups and downs. In the 2003-2005 advance, we nailed XM Satellite
Radio, eResearch, Taser (which was one of our biggest and fastest winners
of all time, up 295% in just five months), Apple and Google, all of
which mushroomed more than 100%. And in the great year of 2007,
we enjoyed big gains in Crocs (up 177% when we sold in November) and
First Solar (we sold our last piece in September 2008 for a 298% gain,
as well as some solid winners like GameStop (profit of 61%) and Intercontinental
What about the bear markets,
you ask? Did we hold these winners during the good times, only
to ride them all the way back down as so many investors did? Absolutely
not! While we give stocks plenty of rope as long as they’re
acting well, when big investors begin dumping shares (i.e., when we
identify clear distribution), we tighten our stops.
Just as important, however,
is our market timing system, which is based mainly on the market itself.
Simply put, when the trend is up, we’re bullish; when the trend is
down, we’re cautious. Yes, it’s that simple, and it’s that
simplicity that has made us the #2 long-term market timer among all
newsletters according to Timer Digest (the keeper of the keys of timing
newsletters). Cabot Market Letter was also named to Hulbert’s prestigious
Honor Roll for performance in both up and down markets.
For example, here’s an excerpt
from our Cabot Market Letter dated September 10, 2008:
“Cash is still king.
Since the last issue, we’ve sold First Solar--taking our big profit
and walking away--and Qualcomm, taking a small loss. We find ourselves
in a highly unusual position--the Model Portfolio contains just one
stock (out of a maximum of 12) and is over 90% in cash. The market
has been nothing if not a meat grinder the past few weeks--almost no
stocks have enjoyed sustained advances. And the few that do advance
for a time often get hit hard in the weeks that follow. Thus,
we’re content to sit with our cash hoard and avoid the market’s
viciousness. We need to see at least some strong buying power
emerge before we recommend buying in a serious way.”
After that, AIG got bailed
out and Lehman went under--and the Dow fell 3,400 points in one month!
In fact, we averaged a 50% cash position in our Model Portfolio during
the entire bear market (October 2007 through March 2009)--a feat our
subscribers are very thankful for.
Moreover, we didn’t hide
in a cave as so many did following the crash. We know that bull
markets always follow bear markets, and we began receiving buy signals
in late March and early April of 2009, just as the bull market was getting
underway. And we’ve been bullish ever since!
During that bullish time, we’ve
gotten back to doing what we love most--finding and buying great growth
stocks. We recently averaged up in one of our favorites, a stock
we believe is the #1 leader of this leg of the bull market. Its
major competitor just left town, and sales and earnings are projected
to grow 50% in both of the next two years … and frankly, I believe
those numbers are way too low.
We also own a company that’s
already doubled for us since our recommendation a year ago, but I feel
there is much more left. Why? Because the company is revolutionizing
one of the biggest mass markets in the world; it’s by far the top
dog in its industry, and we think it will sell millions more of its
products in the quarters ahead. It’s truly one of the biggest
stories we’ve ever uncovered, and the stock continues to act well
as big investors pile in.
Then there’s a firm that
is leading the charge in replacing all standard, incandescent light
bulbs around the globe. Its technology produces lights that last
many times longer, use far less energy and don’t contain any harmful
mercury. Known as light emitting diodes (LEDs), these products
are in huge demand, both from the HDTV industry (which is switching
over to LEDs in a big way), but also by commercial and industrial outfits
that can save millions of dollars each year in lighting costs.
While there is some competition, right now, this firm is selling all
it can produce. Long-term, this is a market that could total $100
And, as I wrote above, this
bull market is nowhere near its end … meaning many more potential
winners are likely building launching pads as you read this. I
think many of them will likely lift-off during the current earnings
season, as Wall Street continues to underestimate the earnings potential
of a number of young growth companies.
So, if you want to be like
most investors--sit in an index fund and ride the S&P 500 (which
hasn’t made any progress since 1998) like a yo-yo during the next
few years, go for it.
But if you want to take full
advantage of this bull market, which is launching big winners left and
right … and know that you’re following a system that knows
not only when to buy, but also when to sell and hold cash … then I
urge you to try Cabot Market Letter.
And to give you that added
push, I’m offering a special low introductory price for new subscribers.
As my long-term subscribers can attest, giving Cabot Market Letter a
try is a decision you’ll thank yourself for. You have nothing to lose ... and everything to gain. Click below:
Editor of Cabot Market Letter
P.S. I’m continuing to spot
more and more good-looking stocks with great stories and growth. I expect
many will take flight during the next couple of weeks as they report
better-than-expected earnings and institutional investors pile in. Don't
delay--this is a completely risk-free offer …
If you don’t see the huge
profit potential our 40-year advisory service offers you then call us
and cancel within 60 days. I’ll rush you a full and prompt refund.
So what are you waiting for?