Search

There are two kinds of losers in the lottery. The first are those who play and don’t win. That’s the fate of the vast majority of participants in lotteries these days, and it’s not such a bad fate (unless you’re betting the rent money.) The second are those who win big. Yes! History is full of people who won millions in the lottery and ruined their lives.

This stock market collapse has lasted longer than some thought, leading the mainstream media to scramble for an explanation. The real reasons for the extended downturn are simpler than you think.

I have a lot of stock market advice written down. And it turns out that over the years I’ve been fairly consistent in the small cap advice that I’ve given during challenging markets. Most of the advice is the same each time the you-know-what hits the fan, as it’s been doing lately. For example, in the spring of 2010, small caps were in correction mode, and ultimately fell 15% before finding bottom.

Yesterday was another extremely volatile day in the stock market for options traders. Being patient is challenging for many traders, and especially options traders. We’re often looking for the next home run. However, in this environment, patience is key.

The stock market losses continue to pile up, and it’s discouraging for any investor. But there are positive signs if you look closely enough.

The decade-long secular bull market (early 2000s to 2014) in commodities is over, which means the next 10 years will probably bring generally “low” commodity prices. Who will that benefit? I think it will be retail and consumer-oriented companies, as consumers have more money to spend, and as input costs for food or materials decline and stay down. Thus, I’m on the hunt for some retail-related companies that can make huge runs during the next bull phase.

Criticizing Wall Street and major U.S. companies—especially pharmaceuticals—is very popular these days. For Hillary Clinton, Bernie Sanders and Donald Trump, the evils of Wall Street, the major banks and the drug industry are very popular talking points on the campaign trail. And perhaps in reaction to this negativity, leading bank stocks such as Goldman Sachs (GS) and Bank of America (BAC) are down 14.50% and 20% respectively just this year.

Not all stocks are falling in this volatile market. The stock prices of leading companies operating in stable industries generally hold steady during market declines. I advise investing at least 50% of your portfolio into ultra-safe stocks and ETFs. I have assembled a list of 12 ultra-safe companies for your review.

At its essence, growth-investing success comes down to playing the right trend, at the right time, and with the right stocks. The bigger and the more durable the trend, the better. And one of the most durable growth trends is giving to charitable causes! It’s not rampant growth—it grows a couple of percentage points faster than GDP—but it’s consistent.

Oil and the stock market are moving in tandem now. But as these two charts show, that’s rarely been the case.

There are hundreds of undervalued stocks in the market today. I have listed 10 high-quality companies that have been beaten up badly, but will likely recover during the next 12 months. All 10 of the stocks in my list are rated as undervalued by Standard & Poor’s, and each stock is rated above average quality by S&P.

Even though the market rebounded heroically in October, that August correction was just too strong to overcome. Cabot’s growth advisories protected subscribers by moving heavily into cash when things were stormy, but we didn’t have the kind of steady tailwind from the market that produces bushels of big performers. Today I would like to review three top performers of 2015.

The end of a year is a great opportunity to make a New Year’s Resolution to be a better investor. The question is: what should you resolve? The experience of people who vow to lose weight or stop smoking or learn Chinese should give you a little guidance here. Huge resolutions often lead to huge failures.