Investing Wisdom
Lululemon, One Year Later
Stock Market Analysis Video
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Last week I shared some of my favorite bits of investing wisdom with you and asked you to write in with your own favorite pieces of investing advice. Today, I’m sharing some of the best submissions with you. I hope you enjoy it and learn something! And if you didn’t send me your favorite investing quote yet, please do so by replying to this email.
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Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that “The time to buy is when there’s blood in the streets.”
“Buy when others are fearful, sell when others are greedy"-Warren Buffett
Buy the rumor, sell the news.
D. Rosen
Seattle, Washington
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“The four most dangerous words in investing are ‘This time it’s different.’"-Sir John Templeton
D. Sophos
London, England
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“Nothing is more difficult, I believe, than consistently and fairly profiting on Wall Street. I know of nothing harder to learn."-Gerald Loeb
A. Anderson
Baton Rouge, Louisiana
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This takes at least 20 years to understand and about 10 minutes to learn:
From Reminiscences of a Stock Operator by Edwin Lefevre
“In a bull market your game is to buy and hold until you believe that the bull market is near its end.
“To do this you must study general conditions and not tips or special factors affecting individual stocks.
“‘Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations.’”
“It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!
“Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn.”
What he really meant to tell them was that the big money was not in the individual fluctuations but in the main movements-that is, not in reading the tape but in sizing up the entire market and its trend.
D. Bonik
Dallas, Texas
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“Trends, like horses, are easier to ride in the direction they are going."-John Naisbitt
“Risk comes from not knowing what you’re doing."-Warren Buffett
“Change is inevitable, growth is intentional."-Anonymous
“Our best built certainties are but sand-houses and subject to damage from any wind of doubt that blows"-Mark Twain
“In matters of style, swim with the current; in matters of principle, stand like a rock."-Thomas Jefferson
“Markets test patience and reward conviction.”
“In the field of observation, chance favors only the prepared mind."-Louis Pasteur
V. Ved
If you missed my issue last week with all the quotes from investing greats, you can read it here.
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Almost exactly one year ago, I recommended Lululemon Athletica (LULU) in Cabot Wealth Advisory for the first time. At the time, the stock was not that well known and was trading around 44. Since that first recommendation, we’ve written about the stock many times here and in our other Cabot newsletters. It’s also had a big run, recently trading around 90. And we still like it! In fact, Michael Cintolo recommended it recently in Cabot Top Ten Trader, writing this:
“When Lululemon first started telling its story of yoga wear, most pundits giggled--it smelled too much like just another fad that would quickly fall by the wayside. What those naysayers missed was that Lululemon was, first, very small (even today it has just 137 stores, though it plans to increase that by a whopping 30 by the end of 2011) and, second, it wasn’t selling yoga clothes as much as athletic, casual, fashionable wear for women. It’s been a huge hit, with revenues ramping at least 50% each of the past five quarters while earnings clipped along at an even faster pace. Recently, the company’s only real problem has been keeping up with demand; in its March 17 conference call, management said that despite huge gains in comparable store sales (up 28% in the latest quarter!), ‘we believe there was unmet demand across all product lines in our stores and e-commerce channel.’ Translation: Management has been too conservative, and while there could be a short-term hiccup as they boost inventory levels and re-launch their website, the long-term outlook is bright.
“LULU broke out of a base-on-base last week-the first structure lasted six weeks and led to a brief breakout in early February, and the second also lasted six weeks, leading to last week’s big gain on the second heaviest weekly volume in the stock’s history. LULU has a history of being quite fidgety, with big short-term moves up and down. We think you can buy a little here with a loose stop around 81, but a brief dip
into the mid-80s isn’t out of the question either.”
You could buy LULU here and hope for the best or you could check out Cabot Top Ten Trader to get Mike’s latest recommendation on this and other leading stocks.
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In this week’s Stock Market Analysis Video, Cabot Top Ten Trader Editor Mike Cintolo says the market has seen a little resistance this week, but the Cabot market timing indicators are still positive, so we’re leaning bullish. Many investors are wondering whether this is a double top, but no one can say for sure. Mike advises you to stick to a system you have faith in. Stocks discussed: Lululemon (LULU), Weight Watchers (WTW), Molycorp (MCP), IntraLinks (IL), Illumina (ILMN) and RealD (RLD). Click here to watch the video.
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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, there are links below to each issue.
Cabot Wealth Advisory 4/4/11 - All Hail the Gerrymander
On Monday, Timothy Lutts discussed the history of gerrymandering and how it’s affecting present day politics in our state of Massachusetts. Tim discussed the recent positive action in the market and a stock that looks like a great investment. Featured stock: Constant Contact (CTCT).
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Cabot Wealth Advisory 4/5/11 - 5 Reasons I’m Still Bullish on Uranium Stocks
On Tuesday, we heard from Nathan Slaughter of StreetAuthority on why he thinks the nuclear crisis in Japan has actually created a great buying opportunity in uranium stocks.
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Cabot Wealth Advisory 4/7/11 - You Can’t Predict the Market
On Thursday, Paul Goodwin discussed the Law of Unintended Consequences and why you can’t predict the market (and shouldn’t try to). Paul also wrote about the real rules of successful investing and a stock that might become the “App Store of China.” Featured stock: Sky-Mobi (MOBI).
Until next time,
Elyse Andrews
Editor of Cabot Wealth Advisory