Daily Posts Archive
One of the most encouraging signs I see in the market is the action of many potential leading stocks. There are more than a handful that are hanging in there despite the market’s woes. And there are a few that have actually broken out on the upside! A group that has broken free is one that I pointed out to you in my last Cabot Wealth Advisory (dated January 5)--education stocks.
Entrepreneurs, according to academics, are motivated by an overwhelming need for achievement and a strong urge to build. As Thomas Edison commented, while he and his team were working to develop an incandescent light bulb that lasted more than a few minutes, “I have not failed. I’ve just found 10,000 ways that won’t work.” Without entrepreneurs the world, would be far, far poorer today. Most entrepreneurs are less famous than the men in this issue. But they are no less valuable. One is my father, who launched Cabot Market Letter from his kitchen table back in 1970 and persevered until he could afford to leave his regular job a few years later.
Every so often, I compile the responses to the survey at the bottom of each issue of Cabot Wealth Advisory and from our welcome survey, which is sent to new subscribers. This week, it was time to read the results and there were some very interesting responses. Most responses were complimentary and some contained specific questions or requests for information, which is what I’m going to address today.
So with the Detroit auto show starting this week and running through January 25, I’ve been paying attention to what might be coming down the line. No surprise, there are lots of electric and hybrid concept cars on display, including the Chevy Volt. And yes, the Volt is still scheduled to go into production--at the end of 2010, about 23 months from now. That’s a long ways off, especially when you realize that a full two years have passed already since the car was first announced.
Last week I wrote a long piece about Steve Jobs, Apple and AAPL, saying, “AAPL’s best days as an investment are over. In fact, AAPL is likely to underperform the market in the years ahead.” Today, the stock plunged on big volume through technical support, following the news that Steve would take a nearly six-month medical leave. So my timing was lucky. And my conclusion is unchanged. Remember, it’s all about changing levels of perception. Your job--and ours--is to find the next AAPL. One way to do that is to ask, “What company serves a mass market, is profitable, has terrific prospects for growing revenues and earnings rapidly, can ride a wave of societal evolution, and is not yet loved by the majority of investors?”
Last Thursday, in a financial story that you may have missed, Nasdaq OMX Group announced that it had created a new index. It’s called the Nasdaq OMX Government Relief Index and it is now trading under the symbol QGRI. The components of the index will be the companies that receive $1 billion or more under the Troubled Asset Relief Program (TARP) or any other government handout program. Creating and updating indexes like The Bailout Index (my term) is one way financial services companies make a living. But I think I’ll give The Bailout Index a pass
Today’s first topic is Steve Jobs, Apple and AAPL. Steve Jobs, of course, is the man at the head of the company. Apple is the company itself. And AAPL is the stock. They are three separate entities. But investors often make the mistake of confusing them, and that can be dangerous. The media have focused on Steve Jobs and his health and worried about the effect on the company should Steve’s health problems force him to step down. But I’m not making the mistake of thinking that if Steve returns to good health AAPL will continue to be a fine investment.
OK, by now you’re probably sick about hearing of New Year’s resolutions; heck, Paul Goodwin even wrote about a few pointers a couple of weeks ago and Elyse Andrews discussed some in last weekend’s digests. Even so, I like to write down some New Year’s investing resolutions every January, and I think you might get a valuable nugget or two out of them. So here are 10 to consider, in no particular order. Adopt one of them, adopt them all--whatever works for you. But I’m hoping to adhere to all of them (and more) in the months ahead.
It’s been a crazy year, with bank failures, bailouts and a historic election behind us, 2008 will definitely be one to remember. In honor of the New Year, I’ve been looking back at 2008--all its ups and downs--and came up with a few investing New Year’s resolutions based on what’s happened. The most important thing to remember is to learn from your mistakes, but don’t dwell on them. They teach important lessons, but the most important thing is to move forward with those teachings in mind. Best of luck to you in 2009!
Shifting into academic/environment/energy mode, I recently read an article in The New York Times that claimed we’d save more fuel as a country if we stopped measuring miles-per-gallon and began measuring gallons per 10,000 miles. On the surface, it doesn’t seem to make sense, and I assume that’s because we’ve been brainwashed (conditioned) into thinking m.p.g. is the gold standard. So I opened up a spreadsheet and tried some scenarios, and here’s what I found. It’s absolutely true.