The Problem with “Free” Investing Tips

Stocks and Pets: Easy to Buy, Hard to Manage

A coffee shop in Dover, New Hampshire (where I live) has a sign above its wall menu that says: “Any unattended children will be given a double espresso and a puppy.”

It’s an excellent threat, because, while the espresso would wear off after a couple of hours of high-energy chaos, the puppy would need constant attention for years and years. Sometimes I think that there should be a warning on investing websites that says, “Visitors will be given a ration of hype and a free investing tip.”

 

It’s the “free” investing tip that really bothers me. Anyone who recommends a stock, but fails to provide any guidance on how to manage that stock, isn’t giving you anything of much value. Free stock tips are being given away constantly on the internet. And that’s pretty much what they’re worth.

A free investing tip is like the Monty Python routine about a children’s television show that teaches kids how to play the flute: “You blow into this hole and move your fingers up and down on these keys.”

Not totally wrong, but with just a few details left out.

One thing that distinguishes Cabot’s investing advisories is that any stock we recommend—no matter whether it’s a growth stock, an income stock, value stock, small-cap stock or an options trade—will be followed up on in our weekly updates until it’s sold. We say that the portfolios of Cabot Global Stocks Explorer or Cabot Growth Investor are fully advised. We will tell you what to buy, when to buy, when to hold and when to sell.

That’s a rare service.

It’s as if the person who gives you a puppy also offers to come by your house twice a day and does the “walking” for you.

Emerging markets stocks have been in robust good health recently, and I’ve been getting more questions from my subscribers, mostly about the stocks I’ve recommended, but also other stocks and news stories and the general state of the market. Every question gets answered.

If you’d like to participate in the market’s advance (and find out when it’s time to pull in your horns and turn defensive), you can find a Cabot advisory that will match your investment goals and risk tolerance.

And remember, we’ll walk the dog for you.

Here’s the link.

Fortune Cookie

Here’s this week’s Fortune Cookie. Remember, you can always view all previous Fortune Cookies here and Contrary Opinion buttons here.

“Curiosity is one of the permanent and certain characteristics of a vigorous intellect.”

-Samuel Johnson

Tim’s comment: The incurious investor too easily becomes wedded to specific stocks, industries and styles, and forgets that there are many ways to invest successfully. (I knew a man from Peoria, Illinois, for example, who would never dream of selling his Caterpillar (CAT) stock.) The curious investor, on the other hand, recognizes that the world is ever changing; he never stops looking for newer companies, stronger stocks and improved market timing systems.

Paul’s comment: In a way, the very existence of Cabot is a monument to the curiosity and the engineering-trained mind of Carlton Lutts, who founded the company 47 years ago. Carlton got a huge kick out of finding and testing new ideas for finding and profiting from strong growth stocks. And while the company has branched out to include many different kinds of stock investing, I like to think we still have a lot of Carlton in our corporate DNA. Tim, of course has even more, being Carlton’s son!

 

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