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Patience Pays Off With Small-Cap Stocks

Cabot Small-Cap Confidential, a limited subscription newsletter, is one of our newest publications, launched just one year ago. Its focus is on finding undervalued and little-known small-cap companies that are poised to break out in a big way. The number one request Cabot has had over the years has been to find great stocks sooner and with Cabot Small-Cap Confidential, we’re able to do that.

Cabot Small-Cap Confidential, a limited subscription newsletter, is one of our newest publications, launched just one year ago. Its focus is on finding undervalued and little-known small-cap companies that are poised to break out in a big way. The number one request Cabot has had over the years has been to find great stocks sooner and with Cabot Small-Cap Confidential, we’re able to do that.

Or, I should say, the publication’s analyst and editor, Thomas E. Garrity, is able to do that. Tom is a lifelong investor; he has been a stockbroker, stock analyst, venture capitalist and portfolio manager. His long career and varied experiences taught Tom to make investments only when the potential rewards outweigh the risks. He applies this philosophy to every stock he recommends in Cabot Small-Cap Confidential.

Small-Cap System

Tom searches for paradigm shifts that are opening up new opportunities and he invests only when the market opportunity is huge. This is Tom’s Law of Large Numbers, which means that he only selects companies that serve large, burgeoning markets. One of the keys to Tom’s success is investing in companies before institutions notice them. This allows subscribers to buy stocks more cheaply and enjoy the ride up as institutional investors push the stock higher as they get on board.

Tom has developed a disciplined investment methodology using a series of qualitative and quantitative metrics that are evaluated for each company under his investment consideration. The company’s products must target large markets, the science or technology must be proven, the balance sheet must be strong enough to support research or investment activity, and the idea must be strong enough to attract future institutional investment.

Tom’s analysis results in a portfolio of companies that are pioneers in their industries ... and, in many cases, are creating industries of their own! Because these stocks have little or no institutional or research coverage, Cabot Small-Cap Confidential subscribers can acquire significant positions in these companies more cheaply than if their stocks were widely followed.

Thus, Cabot Small-Cap Confidential is for experienced investors seeking big opportunities in little-known, undervalued stocks that have the potential to explode.

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Recommendations From the Best Minds on Wall Street

During the last 27 years, thousands of investors have benefited from ideas and recommendations found in the Dick Davis Digest, a bi-weekly publication featuring market insights and informed recommendations from the Best Minds on Wall Street. We review hundreds of financial newsletters and institutional research publications and after careful screening, we bring you the ideas with the greatest profit potential.

Throughout the decades it’s become an indispensable tool of tens of thousands of investors just like you. Try it and you’ll get:

Expert advice on market timing.

Expert advice on growth stock selection.

Expert advice on gold stock selection.

Expert advice on mutual fund investing.

To start your subscription today and reap the benefits offered by the Best Minds on Wall Street, click the link below.

http://www.cabotinvestors.com/dddii05ec01.html

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Extensive and Detailed Research

Tom does extensive research about each of the companies he selects, as well as keeping up on what the institutions are buying. This gives him a sense of what industries the big boys are looking at and what might become interesting to them in the future.

Interestingly, Tom looks for stocks that offer both growth and value. This means he wants stocks that offer growth-oriented ideas but are undervalued in the market. Along with this, Tom looks to invest at the right time of the product cycle, as this can greatly affect the growth potential of the stock.

The stocks are held for varying lengths of time based on their performance. It often takes time for these stocks to mature so patience is necessary.

Track Record

For example, Tom discovered Hansen Natural way before most investors. Our momentum-based Cabot Top Ten Report first identified this as a strong stock in May 2004, when it was selling at a split-adjusted 3.13. If you bought then and held on until recently, your profit would have been more than 600%.

But Tom invested in the stock three months earlier, in February, when Hansen was selling at a split-adjusted 1.71. His profit as of February 29, 2008, when he sold some of his position, was a mind-boggling 2,338%.

So as you can see, the profits may not come in overnight but when they do, they come in droves.

Included in a subscription to Cabot Small-Cap Confidential is the monthly newsletter, available by email or postal mail, with one heavily researched and detailed stock pick as well as updates on previously recommended stocks. Subscribers also receive a weekly update of the stocks every Friday, VIP access to our Web site and the opportunity to email Tom with questions.

This is the latest in a series explaining Cabot’s publications. To read the rest of the issues, go to http://www.cabot.net/Issues/CWA/Archives.aspx and click on my name. Please send us any questions, comments or suggestions via email and don’t forget to check out Cabot’s blog at www.iconoclast-investor.com

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Book Recommendation

I haven’t recommend a book in a while and thought I’d pick that back up this week. Today’s investment book is “How I Made $2,000,000 in the Stock Market” by Nicolas Darvas, which was originally recommended in Cabot Wealth Advisory by Timothy Lutts

In the book, the author details how he made $2 million in the stock market. Frequently on the road, Darvas would have Barron’s shipped to him to see how various stocks had acted the previous week. Instead of reading through all the articles and opinions, he would simply throw everything away except for the quotes section. This way he could see what was happening in the market and make judgments without being influenced by news of the week. And it worked wonders!

Our advice: Take a step back from the day-to-day news and gyrations. Instead, keep focused on the big picture. Yes, it’s fun and exciting to watch things unfold minute by minute. But we contend you’ll make more money by ignoring the loudmouths on TV and just staying focused on the major trends.

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Win Big With the Market’s 10 Strongest Stocks

Cabot’s proprietary screening software ferrets out the 10 strongest stocks in the market each week, routinely beating the market by finding big winners like these past picks:

In 2005, Hansen Natural gained a whopping 570%. In 2006, NutriSystem was up an amazing 480% in 11 months. Last year, stocks like JA Solar were up 200% in seven months, DryShips was up 510% over 10 months and Research in Motion was up 149% in seven months.

Even during this year’s bear market, Cabot Top Ten Report has found winners in stocks like Cleveland-Cliffs, which doubled in four months, Continental Resources, which rose 160% from its recommendation its peak, and Walter Industries, which moved from 42 in January to 112 in early July.

During the last year and a half the average stock featured in Cabot Top Ten Report has produced 30% actualized gains, so click the link below to start seeing big returns in the market’s hottest stocks.

http://www.cabot.net/info/ctt/cttib01.aspx?source=wc01

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In case you didn’t get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, we have links below to each issue.

Cabot Wealth Advisory 9/8/08 - My Predictions for the Stock Market

On Monday, Paul Goodwin wrote about playing stock market defense and cutting your losses short. He also wrote about why forecasting complex phenomena is impossible and why investing based on those forecasts is a bad idea. Paul also wrote about his investment idea in a big Indian bank. Stock featured in this issue: ICICI Bank (NYSE: IBN).

http://www.cabot.net/Issues/CWA/Archives/2008/09/Stock-Market-Predictions.aspx

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Cabot Wealth Advisory 9/11/08 - Fannie, Freddie and America’s Debt Load

On Thursday, Timothy Lutts wrote about the U.S. rescue of Fannie Mae, Freddie Mac, the trends that brought us to this place and where they might lead. Tim discussed the need for a game plan to get rid of the enormous debt load of both individual Americans and America as a country. Tim also discussed a value stock that he thinks is a great healthcare investment. Stock featured in this issue: CVS Caremark (NYSE: CVS)

http://www.cabot.net/Issues/CWA/Archives/2008/09/Freddie-Fannie-Debt.aspx

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Cabot Wealth Advisory 9/12/08 - Value Investing Questions Answered

On Friday, J. Royden Ward answered readers’ frequently asked value-investing questions. Roy wrote about selling stocks, what sectors he believes will perform well and why stocks rise and fall. He also recommended a global manufacturer of climate control equipment, energy efficiency systems and security locks and doors. Stock recommended in this issue: Ingersoll-Rand (NYSE: IR).

http://www.cabot.net/Issues/CWA/Archives/2008/09/Value-Investing-FAQ.aspx

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Editor’s Note: Due to the market fluctuations small-cap company valuations have been pushed down to a point where there are now even more exciting opportunities in these high-growth companies. Let Tom Garrity be your guide to double your money before Wall Street catches on. Join Cabot Small-Cap Confidential today, there are only a few open spots available, and they are going fast. For more information, visit the link below.

http://www.cabot.net/info/csc/cscii03.aspx?source=wc01

Until Next Time,

Elyse Andrews
Editor of Cabot Wealth Advisory

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Elyse Andrews, is a contributor and former editor of Cabot Wealth Daily, focusing on educational topics on finance, the stock market and individual stocks.