Cabot Top Ten Trader is the best source of momentum stock ideas available to experienced investors and investment professionals. Our proprietary software program screens more than 8,000 stocks and selects—without bias—the 10 strongest stocks in the market (many of them unknown to most investors) using Cabot’s time-tested criteria.
And what are those criteria? Strong relative performance, i.e., those stocks that are outperforming the market at the fastest pace. These stocks are being heavily accumulated by investors, some by big mutual funds with dozens of research analysts, some by lots of individual investors in-the-know. In many cases, this type of unusual price strength is forecasting big positives in the future…something that can drive the share price even higher in the weeks ahead.
But you’re not just getting a list of strong stocks. We also dig into the details, telling you why these stocks are so strong. We analyze the charts, giving you suggested buying ranges so you avoid buying at a temporary top. And we highlight one stock each week called the Top Pick that looks to be a good buy with great short-term potential.
Of course, not all 10 stocks each week will turn into big winners, so it’s important for you to have a game plan on how you can use Cabot Top Ten Trader to improve your own investment results. Here are some guidelines to help you along the way:
Spend time reading the Why the Strength sections
Sometimes Cabot Top Ten Trader’s stocks are strong for what might be fleeting reasons; other times the company may have a truly revolutionary product offering. We’ll let you know in the Why the Strength section, giving you an idea whether the stock may be temporarily hot, or whether it has the legs to be a big market winner.
Also, it’s important that you to have some conviction in the stock’s story. That way you won’t bail out any time the stock falls for a day or two. We urge you to read through the entire report each week and narrow down your potential buys to those stocks whose stories you believe in.
Pay attention to our Suggested Buy Ranges
No matter how hot a particular stock is, or how amazing the story seems to be, if you buy wrong, you can get burned. This is a common mistake among all investors—the desire to get in now, instead of waiting for the right opportunity. That’s why we provide you with a suggested buy range—if we think a stock is temporarily too high, we’ll say so. Remember, if you miss one, you shouldn’t worry—there are always other trains leaving the station.
Our Suggested Buy Ranges are valid for two weeks. Beyond that time frame, too many things can occur for us to forecast where a good entry point might be.
You don’t have to buy them all
Ten strong new stocks each and every week may seem overwhelming. And if you consistently try to buy most of the stocks in each issue, it will be. But remember this: You don’t need to own every strong stock to be a winner. You just need to buy a few good ones, hold them during their up-moves and sell them while you’re ahead.
Thus, whether you’re a shorter-term trader or a longer-term investor, we advise you to select just a few stocks that appeal to you. There will always be next week’s whole new set of market-leading stocks.
Have a sell plan
Buying stocks is easy for any investor; the hard part is selling them. We’ve been in this business 40 years, and we’re still looking for ways to improve our exit strategies.
What’s more important than a rigid selling system, however, is having a common sense plan and following it. To some, that means taking quick profits after just a week or two if the stock is acting strong. To others, it means allowing the stock plenty of room to fluctuate, aiming to develop a few big winners over time.
The Cabot Top Ten Trader is useful to both types of investors. Our Previously Recommended Stocks section (found on page 12 of every issue) gives you a brief follow-up on previously recommended stocks—you’ll find Hold ratings (for those that have already traded within our buy range), Wait ratings (for those that have yet to trade within our buy range) and Sell ratings.
We’re also in touch on Fridays with a Movers & Shakers email, which gives you our latest thoughts on the market, as well as highlighting some past recommendations that are at good buy (or sell) points.
Beyond those helpful tools, we urge you to develop your own system, using charts to determine when to take profits, when to cut losses, etc. On this front, check out selling strategies and other resources in the Education and Investing Topics sections of this website. Don’t forget we’re always here to help, so you can send us an email—we promise to get back promptly.
Use wise portfolio management
Lastly, don’t forget to keep your wits about you. Don’t invest the rent money in these volatile stocks. And make sure you have a game plan that includes how much money you’re going to commit to each purchase, when you’ll sell, when you might ease off new buying (say, when the market is in the tank) and when you might average up (buy more shares of your best performing shares). There’s no one perfect way to do all these, but it’s good to have a game plan before you jump into the market with both feet.
Following these tactics should get you off to a good start when using the Cabot Top Ten Trader. But because the market is always changing, we’re always here to help. So don’t hesitate to give us a call, or send us an email. We look forward to hearing from you, and helping you get the most of our advisory.