Daily Posts Archive
If you follow a proven system (like cutting your losses), it doesn’t mean you’ll always be on the right side of things. But it does mean you’ll come out richer in the end. It’s usually the investors who don’t have a proven system that get so nervous and anxious about the market, the future, what their stocks might do, etc. Making money in the market is difficult, especially this year. So don’t feel silly or beat yourself up a poor trade or two--oftentimes, as in this case, it was just a bad market, or bad luck. Simple as that.
In my mind, the future is likely to bring something new to America, and for lack of a better term, I’m going to call it the Great Shrinkage. In this Great Shrinkage, as I ventured before, credit will shrink and equity will increase. In this Great Shrinkage, the number of colleges will shrink, as fewer parents choose to borrow the big bucks required. States and municipalities will cut non-essential services. Savings rates will climb ... but with demand so high, returns from savings will stay extremely low.
Forecasts were all gloom and doom for Black Friday, with the media predicting a huge pullback in consumer spending. But on Monday, numbers were released showing that shoppers had actually increased their spending over the same period last year. Many media outlets are still predicting less shopping in the weeks before the holidays and spending was way down leading up to Black Friday, meaning the boost may not do much to help ailing retailers.
You can believe the United States’ best days are over and we are slowly slipping back toward dependence and bondage. Or you can believe that “good old American ingenuity” will allow us once again to “overcome the challenges that lie ahead” and retain our position of global leadership. Or you can choose something in between. Me, I’m an optimist, not least because life is a lot more fun when you look on the bright side. It makes you healthier, more productive, and more fun to be with.
A few years ago, (January 2006, actually) during my annual physical exam, my doctor gave me a stock tip. I knew that he was aware of what I do for a living, but we hadn’t ever talked about stocks or investing or anything other than how to get my cholesterol down. I was so surprised that I think my blood pressure actually spiked! But there my very own Primary Care Physician was, telling me about how a drug rep for a big company had dropped a name on him during a sales call.
The past weekend brought the news that you can now pay $149 to get your child’s DNA tested to determine whether you’ve got a future Olympic athlete or NFL Hall-of-Famer on your hands ... or a first class couch potato. The focus of the genetic test is the ACTN3 gene, which instructs the body to produce a protein, alpha-actinin-3, that is found specifically in fast-twitch muscles ... the muscles most valuable in power and speed sports. In brief, the makeup of the gene helps determine whether a person might be better suited for sports that require power and strength, or endurance, or general activity ... or none of the above.
I hope that you had a wonderful Thanksgiving and that you’re recovering well from your turkey hangover. Thanksgiving is when we celebrate all that we are grateful for, but it’s also a holiday of retail deals, holiday sales and shopping. Many Americans start their seasonal gift buying on Black Friday, but if you didn’t join the shoppers yesterday , or if you have more presents to buy, this issue is for you. Today I’m going to highlight some of the best books for the investor on your gift list, all recommended by the Cabot editors.
Happy Thanksgiving! I’ve written in the past that dividend investments can be a solid piece of your portfolio. I prefer growth stocks, and in that realm, dividends are basically meaningless. However, with more and more stocks, trusts, exchange-traded funds and the like, there are definitely intelligent ways to invest for yield. But beware of the supposed free lunch on Wall Street, because there is no such thing. Double-check the safety of the dividend before you jump in.
Yesterday afternoon, my wife and I returned from a two-week trip to India. The experience was absolutely marvelous, rich in warmth and beauty, yet at the same time colored by the substantial economic challenges that face the country of 1.1 billion people. While I was gone, the Dow dropped another 10%, the S&P 500 lost 14% and the Nasdaq plunged 16%. Happily, all our Cabot growth-oriented letters have been recommending a heavy cash orientation for many months so this continued erosion has brought little pain.
Last week I ranted about overspending by American consumers and I received many interesting responses through email and the blog. I’ve included some of the best rants in today’s issue, but if you haven’t sent yours in, feel free to do so at any time. Enjoy!