Daily Posts Archive
While Emerson Electric Co.’s (EMR 36.09 NYSE – yield 3.70%) short-term prospects depend on the vagaries of the global economy, the company has a history of innovation, as well as manufacturing and marketing strength, that bodes well for the longer term. The company’s brands are well-known and well-respected around the...
On a recent trip to the local shopping district near my house, I noticed that a staple of the neighborhood--the local movie rental store--had closed. I suspect the closing has a lot to do with the lack of people renting at locally owned video stores. Now I’m seeing a Netflix subscription in my future. It’s not that I’m against the online movie rental giant, but I liked the character of my local video store. Whatever my feelings about the company, it doesn’t change the fact that Netflix (NFLX) has transformed the movie rental business with its online platform. In fact, it was featured in Cabot Market Letter just a few weeks ago.
Right now, the auto industry is presenting a lot of opportunities for appreciating assets in the stocks of companies developing the cutting edge technologies for electrics, hybrid, natural gas vehicles and many others. Most of the truly exceptional opportunities are in companies most people have never heard of, not Ford (F) and Toyota (TM). Two such companies are featured in the August issue of the newsletter I edit, Cabot Green Investor. They are major growth stories that have a lot to do with a bill 77 senators are co-sponsoring in Congress, Indian oversight of taxicabs, and China’s admiration for European air quality.
It’s easy to understand what a leading economic indicator is and why it leads. If purchasing managers are increasing their buying, it’s because their businesses need new equipment to do business with. Increasing consumer confidence will lead to more consumer spending. Simple. Trailing indicators are a little more complicated, and the amount of attention being paid at the end of last week to layoffs, initial unemployment claims and the unemployment rate are a great illustration. As with corporate earnings, how the figure compares to estimates is more important than the absolute number.
Last year, after much soul-searching, I decided to trade in my trusty 1998 Toyota Avalon in favor of a smaller, better-for-the-environment car--2009 Toyota Matrix. According to Toyota, the 1998 Avalon gets 19 miles per gallon city and 27 miles per gallon highway, not bad for such a large car. But the Matrix gets 26 miles per gallon city and 32 miles per gallon highway. At the time, there was no such thing as the Cash for Clunkers program that’s available now. My Avalon wouldn’t have been eligible anyway, as it comes in well above the 18 combined mile-per-gallon qualifying mark. Well the program, which is supposed to run from July 1 to November 1, has been such a hit that it has already run out of funding. Congress has just added an additional $2 billion to the nearly depleted $1 billion the program started with.
An attractive beverage investment for investors who want fast growth is Green Mountain Coffee Roasters (GMCR), which we’ve mentioned here before. Michael Cintolo of Cabot Market Letter is a big fan of the stock; he added it to his Model Portfolio on May 5 at 50, and is now sitting on a 36% profit. Long-term, the key attraction to Green Mountain is its razor blade business model. The recurring income from the disposable K-cups, which make you a cup of coffee for less than 50 cents, represents a very predictable stream of income for the company. If you don’t own it, it’s not too late to buy.
Note from Cabot Wealth Advisory Editor Elyse Andrews: Occasionally, we bring you articles from outside sources that we feel you will be interested in and benefit from. Today, we have an article from Nathan Slaughter, Chief Investment Strategist of the Half-Priced Stocks newsletter at StreetAuthority, about why you should invest in the “Best-Managed Bank in America.” I hope you enjoy it!
Every few months I like to do a frequently asked question (FAQ) issue for Cabot Wealth Advisory. The reason I’m able to do this is that I’m available to subscribers--every editor answers many emails each week, so we have a pretty good idea of what’s on subscribers’ minds. I find the FAQ both makes for a good read and helps me think through some of the most common and intriguing questions out there. A quick note before I start, the answers to these questions are from my growth stock and market-timing perspective. So without further ado, on with the show.
Forget the Dora the Explorer, Hannah Montana and the Jonas Brothers, kids will soon have a new idol to emulate in the form of a new cartoon series starring ... Warren Buffett. No, your eyes aren’t playing tricks on you. The famed billionaire investor is the star of a new online cartoon series aimed at teaching children about financial responsibility. (After the credit crisis, housing market debacle and stock market meltdown last year, it seems like more than just kids would benefit from this series.)
What do you do with a McMansion that nobody wants? I’m serious. There are a bunch of 4,000 sq. ft. (and larger) houses out there that were quite appropriate for a time of growing families, big paychecks and two SUVs in the driveway. For all I know, there are lots of families who still love their super-sized abodes and wouldn’t trade them for anything. But I’ve seen a couple of stories about how much these castles cost to heat in the winter and cool in the summer, and to clean all year long. If people don’t want to pay to heat a place, and cool it, and make the payments on it, they move out and find a bungalow of manageable size. Then what happens to the big one?