Daily Posts Archive

Stock investing is just like golf in every way that matters. Markets are completely impartial and their rewards and punishments are meted out with an even hand. They cannot be mastered. You can make two investments that seem exactly the same to you and yet one will deliver a sack of cash and another will turn into a box of rocks. Just as in golf, the most important question in investing is “What are you going to do next?” In both golf and investing, sometimes you go for the big shot and sometimes you play it safe. But whining about conditions won’t help you a bit. And just like golf, investing requires you to know your own temperament and limitations and the current conditions on the course and play accordingly if you’re going to make money.

There are several general strategies you can use to manage your winning stocks. Here is a range of possibilities to consider.

My featured stock today is a restaurant chain that serves healthy food and has a healthy balance sheet. I featured Chipotle Mexican Grill (CMG) in the latest issue of my Cabot Benjamin Graham Value Letter. Chipotle is defined as a smoked and usually dried jalapeno chili used in Mexican or Mexican-inspired cuisine. Chipotle chilies are used to make various salsas. The company, Chipotle Mexican Grill, develops and operates 886 restaurants in 33 states.

I was browsing through our Web site archives this week and ran across a Cabot Wealth Advisory written by Brendan Coffey in August of last year. In it, he discussed the concept of buying stocks based on what you know ... and what you like. I took this advice to heart after reading the June 1 issue of Cabot Top Ten Report, which featured on of my favorite stores: J. Crew (JCG). But there is the potential for investors to take this notion too far.

REIT Annaly Capital Management, Inc. (NLY 16.72 NYSE – yield 14.40%) invests strictly in mortgage-backed bonds, holding only bonds issued by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac. These bonds are about as safe as U.S. Treasuries. Thanks to a much-needed dose of liquidity, things are running much...

So maybe the title of this Cabot Wealth Advisory (The Portfolio Management Manifesto) is a bit much. But with the market in a pullback/correction/retreat/whatever-you-want-to-call-it, I wanted to review a few ways you can go about handling your stocks ... especially your winners. Any growth-stock investor worth his salt cuts all his losses short. Also, any investor who’s going to make good money in the market takes good-sized positions. So then the question becomes ... how do you handle your winning stocks? I’ve been thinking a lot about this subject in recent days and weeks, and I’ve concluded it comes down to a battle between drawdowns and profit potential. Let me explain.

Arch Coal, Inc. (ACI 17.47 NYSE – yield 2.10%) engages in the production and sale of steam and metallurgical coal from surface and underground mines to power plants, steel mills and industrial facilities in the United States. As of December 31, 2008, the company operated 20 active mines, and owned...

With annual sales exceeding $44 billion, SUPERVALU, Inc. (SVU 14.89 NYSE – yield 4.70%) is one of the nation’s largest food wholesalers and retailers, servicing over 5,000 stores in 48 states. It owns and operates 2,400 retail supermarkets, including Acme Markets, Albertson’s, Bristol Farms, bigg’s, Cub Foods, Farm Fresh, Hombacher’s,...

A group of 5 countries – Brazil, Russia, Australia, Canada and China – will flourish by controlling essential and ever scarcer natural resources, leading, in turn, to strong currencies. All investors should have stakes in these powerhouses. These BRACC countries are growing far faster than the rest of the world,...

If you take time now and then to think about the long-term changes going on around you, you can put yourself in position to benefit from them financially, by making the right investments. The most successful investors are not only far-sighted; they are also courageous enough to buy and hold these stocks when they were flying high and more cautious investors warned, “That P/E ratio of 100 means the risk is way too high.” So today I’m going to mention 10 big trends I see developing, and suggest 10 investments that might benefit from these trends ... starting with global trends and narrowing focus from there.