Welcome to Cabot Benjamin Graham Value Investor
Thank you for subscribing to the Cabot Benjamin Graham Value Investor and welcome!
The Cabot Benjamin Graham Value Investor includes two issues per month: the low-risk Cabot Value Model and the moderate-risk Cabot Enterprising Model.
Your Cabot Benjamin Graham Value Investor subscription includes:
- The Cabot Value Model portfolio and Top 275 Value Stocks published on the first Thursday of the month.
- The Cabot Enterprising Model Portfolio published on the second Thursday of the month.
- Weekly Updates every Friday
- Special Bulletins emailed to you whenever market or your stocks require action.
All Cabot Benjamin Graham Value Investor resources—current and past Issues, Updates, Special Bulletins, Special Reports and investing tools are available for your review on our website, which you can view by clicking on the Library tab.
The goal of the Cabot Benjamin Graham Value Investor is to provide you with exceptional stock recommendations using the techniques pioneered by Benjamin Graham. Our second goal, just as important, is to give you the confidence to buy the stocks and the patience to hold them to fruition. If we can achieve these goals, we’re confident that you’ll achieve yours, and together we’ll have a long and prosperous relationship.
Here’s a step-by-step guide to investing with the Cabot Benjamin Graham Value Investor:
1. Organize your portfolio
Commit a percentage or dollar amount of your portfolio to value stocks. You should commit at least enough to accommodate investments in 10 or more of the stocks recommended in the Cabot Value Model. Round out your portfolio with moderate-risk value stocks in the Cabot Enterprising Model.
2. Determine how many value stocks to buy
After determining how much money you will invest in value stocks, you need to determine how may stocks to buy. I recommend 10 to 12 stocks for commitments under $100,000, and 30 to 40 stocks for commitments over $500,000. If your portfolio commitment is between 100,000 and 500,000, you can interpolate to get the approximate number of stocks you should own. Divide your cash investment evenly by the number of stocks, leaving 2% to 5% in cash.
3. Buy stocks
I recommend waiting for your chosen Cabot Value Model stocks to dip below the suggested Maximum Buy Price before buying. Investors may miss out on a stock or two, but it is better to move on to another stock than to buy a stock with limited potential. Cabot Enterprising Model stocks are recommended to be purchased at their current prices.
If a stock is selling above its Maximum Buy Price, you should consider placing a limit order with your broker to buy the stock at our Maximum Buy Price. After purchasing a stock, if the stock falls 10% or more, don’t be alarmed. Rather, consider buying additional shares at the lower price.
4. Buy a diversified selection of companies
Choose companies that will diversify your portfolio as much as possible, limiting your investment in any industry sector to no more than 20%. Purchase your selected Cabot Value Model stocks as soon as they drop to or dip below the Maximum Buy Prices.
5. Commit your funds slowly
I highly recommend dollar-cost averaging into the models. Use a three-month time frame and invest equal amounts each month. For example, if you want to invest in a total of 15 stocks, invest equal dollar amounts in five different stocks in each of the next three months. Don’t overweight stocks—it rarely works out well.
6. Monitor your stocks
Our Minimum Sell Prices are two-year objectives. In the interim, expect the stocks to go up and down—ride them out. Each stock should be held until it reaches its Minimum Sell Price. Occasionally, a stock should be sold before it reaches its Minimum Sell Price; in that case, we will send you a Special Bulletin with the Sell recommendation.
7. Sell stocks
All Cabot Benjamin Graham Value Investor stocks are assigned a Minimum Sell Price. When the price is reached, we will alert you in the issues and again in the weekly Update. If you are ever unsure whether you should sell a stock, send an email to roy@cabot.net and I’ll get right back to you.
8. Restock your portfolio
After you have sold a stock, simply replace it with another stock from the current Model. If your sale creates excess funds, you can add part of the sale proceeds to one of your smaller holdings to keep your portfolio in balance.
Click here to access Cabot Benjamin Graham Value Investor online.
Your guide to value investing,
J. Royden Ward
Chief Analyst, Cabot Benjamin Graham Value Investor