Daily Posts Archive
At Cabot, we believe education is a key component of successful investing. Today I’m going to review my system for picking growth stocks, which I’ve discussed in this space before. I call it SNaC, for Story, Numbers and Chart, and it’s the method I use to choose stocks for the Cabot China & Emerging Markets Report.
Soaring gasoline prices. A weak job market. A higher grocery bill. A still-slumping housing market. All of these add up to one thing: lower consumer confidence. Even Warren Buffett thinks we are in a recession. The Consumer Confidence Index dropped to 57.2 in May, down from 62.8 in April. I don’t know about you, but I certainly didn’t need a report to tell me that consumer confidence is low.
The American economy is in a period of great transition, but just like the frog in the pot of water that’s being slowly heated, many people don’t appreciate the magnitude of the coming changes yet. There are tremendous investment opportunities out there for investors who are willing to embrace the future. This week, General Motors (NYSE: GM) stock hit a 25-year low. In the same week, Clean Harbors (Nasdaq: CLHB), hit an all-time high.
As I’ve also mentioned before, I think the biggest aspect of today’s larger-than-life wedding planning process is the benefit of working together, facing some adversity, and (I hope!) a feeling of satisfaction knowing that we’re actually pulled off what is effectively the biggest and most meaningful celebration we’ll ever throw. As a student of the market, and as a person whose passion is and always will be the market, I believe more than ever that this wedding process has lessons not just for life, but for investors as well.
Since I was child, Memorial Day has meant a canoe trip on the Ipswich River here in Massachusetts, and that’s where I am today, enjoying nature, unplugged. A small part of the day, as always, will be devoted to honoring those who made the ultimate sacrifice. But for me, a larger part will be devoted to wondering whether war will ever become obsolete as a tool for conflict resolution. In the long term, I’m optimistic that mankind will eventually evolve to put the practice of war behind us. War is destructive, and I’d rather be productive. But I’m not holding my breath.
Part of my job at Cabot is fielding emails from our Cabot Wealth Advisory subscribers, and one question I see quite often is, “What are the differences between Cabot’s publications?” I’m going to explain our newsletters, one at a time in an ongoing series. This is part one of the series, focusing on Cabot Market Letter, our flagship publication.
I’m a value investor, which means I’m constantly looking for bargain prices in the stock market. The question is: how can we determine whether a stock is a bargain?
Value investors must determine the true worth of a company before deciding whether it is a good buy. The same philosophy can be applied to politicians, as Warren Buffet demonstrated when he backed Senator Barack Obama for president.
Markets are always going up and down, and if you have a way to distinguish a real market move from random motion, you can be back in the market before most investors know that the bull is back in town. Right now, for instance, while most investors are still cowering under the covers, the market timing indicators for the Cabot Market Letter and the Cabot China & Emerging Markets Report are positive.
Tribune Company recently sold Newsday, Long Island’s daily newspaper, to Cablevision, a cable, TV and Internet company headquartered on Long Island. While the future of the newspaper business remains uncertain, perhaps a company with considerable assets (Cablevision owns Madison Square Garden, the Knicks and the Rangers) can breathe some new life into it.