Daily Posts Archive
In the short-term, we remain in the midst of a contraction of liquidity, as the reverberations from the collapse of the sub-prime credit markets continue. Eventually, these markets will stabilize, and when the smoke clears we’ll see a market that is smaller, cleaner and saner ... and liquidity will return. How long this will take I have no idea.
While the Opening Ceremony of the Beijing Olympics wowed many, revelations about the accuracy of what viewers saw has somewhat soured the event. Questions about the ages of the girls on the Chinese gymnastics team have also clouded the athletes’ gold medal win. Fairness has always been an issue at the Olympics, but this year, the host country is attempting to prove itself to the world. It’s all about deception and perception at these Games.
When saving for retirement, most investment gurus tell you to start young, live a disciplined life, diversify and take the long view. But some of us are too old to start young. If you fit into that category, the best way for you to approach investing for retirement might be to allocate some of your portfolio for growth stocks. But make sure you have a system to follow if you choose that path.
Today’s investment idea is in the biotech field. I’m stuck on these stocks for several reasons. One, they’re strong. Two, many actually boast growing earnings trends. Three, the group has failed many times in past decades to put together a lasting advance, so maybe now is the time. Four, there will be tremendous demand for health-improving products as baby-boomers age; biotechnology offers the best chance we have to stay healthy.
I recently found and purchased a copy of The Boston Globe from August 9, 1974, announcing then-President Richard Nixon’s resignation. The paper contained several political cartoons that were written for exactly 34 years ago, but could have been imagined for today. They detailed the weak economy, high food and fuel costs and political scandal.
Throughout the 13 years he was steering the Magellan Fund, Peter Lynch became known for his philosophy that you should invest in what you know. Buying what you know has long since become a bit of Gospel among a large segment of investors--after all, if it worked for Peter Lynch, it should work for you. But it can taken too far, such as when you invest in a company without checking out its management and chart.
You should be taking taxes into account when investing, and the proper time to do that is BEFORE you buy a stock ... i.e., when you’re deciding how many shares and how much money to invest in the first place. Consider the taxes before you invest--if you do, you’ll have a truer grasp of your portfolio.
Today I’m proud to announce the addition of two well-respected newsletters to the Cabot Family of investment advisories, Dick Davis Digest and its companion, Income Digest.
There are many things I’ve learned about investing since starting work at Cabot, but two of the most important are the need to be patient and the need to be flexible. Those are two lessons that could serve many investors well. The best thing to do now is to build a watch list and prepare for the next bull move. It’s coming, and if you follow your investing system you’ll be ready when it does.
We know that every bear market is followed by a profit-making bull market, and today I’m watching very carefully as the old bear market that very likely ended on July 15, is replaced by the next bull market. What you don’t want to do as the new bull market gets under way is be stuck holding the winners of the last bull market. You want to be holding the winners of the new bull market ... and the best way to do that is to keep an eye on the new highs list.