The fourth annual Cabot Investors Conference is now in the history books, and I want to give you a useful report on what went on.
And by “useful” I mean none of the usual rah-rah party line about what a good time was had by all and how much people learned and the picture of me when I had hair that someone dropped into their PowerPoint deck.
All that’s true, but there are few things more boring than listening to someone tell you about how much fun was had by everyone at the conference (or vacation or wedding or party) when you weren’t there.
So here are three useful observations from the Cabot Investors Conference that you can actually use.
Cabot Investors Conference Lesson #1
Even among the savvy investors who showed up at the conference, the level of anxiety about the stock market is still high. Yes, the market scored a rare Trifecta on Monday, with the Dow, the S&P 500 and the Nasdaq all hitting new all-time highs.
Yes the timing indicators from Cabot Global Stocks Explorer and Cabot Growth Investor are all flashing green lights. And yes, a passel of growth stocks on our buy lists and watch lists have picked up a burst of speed from the earnings season that just ended.
But knowing all those things intellectually doesn’t erase the tedious and exhausting string of shakeouts and fakeouts that the markets have gone through in the past 18 months.
Mike Cintolo likes to say that the market is always teaching you the wrong things, and I think this is one of those times. A long period of frustrating trading makes people not trust anything the market does, and that’s what’s keeping investors from enjoying what is clearly a strong bull market.
How is this useful for you? That’s easy. It tells you that there are still droves of investors on the sidelines trying to work up the nerve to get back into the market in a big way. And that’s an opportunity for someone who can take the market’s success at its word.
Cabot Investors Conference Lesson #2
One big lesson that everyone took away from the conference was that you can make money in any investing style if you know the rules and follow them. The conference attendees span the investment spectrum, from devoted growth investors to committed value buyers and everywhere in between. And the income investors asked great questions that helped the small-cap people gain a little perspective, while the options traders taught a few wrinkles to the growth folks.
Stock investing is a little like the Olympics (although the opening bell on the New York Stock Exchange is a poor substitute for the opening ceremony in Rio; the NYSE tends to have fewer dancers) in one important way. In the Olympics, sprinters don’t enter marathons and gymnasts don’t throw the hammer.
And in stock investing, people usually discover one style that works for them and their risk tolerance, how much time they want to spend on it and whether they’re more comfortable with stock stories, fundamentals or charts.
The lesson for you is that you don’t have to pay attention to every stock commentator out there, much less master all the styles. Do a little research, try a few trades, see what works for you and your investing personality. It will make the investing game a whole lot easier if you’re competing in the right event.
Cabot Investors Conference Lesson #3
Very few people at the conference knew how well the rebound in emerging markets was going. (Well, the subscribers to Cabot Global Stocks Explorer had a pretty good idea, because I’ve been telling them for a while now.)
Here’s a chart of the ETF that tracks the performance of emerging markets stocks in general. The rally that started in early July is staying well above its 25- and 50-day moving averages. (And the weekly chart would show that EM stocks are at their highest level in more than a year.)
And when you look at some of the individual stocks that I follow (and recommend), the picture is even rosier. Here’s the daily chart of Yirendai (YRD), a Chinese consumer-to-consumer loan company. The stock is young, but it is clearly finding a place in the hearts of growth investors (and also in the portfolio of Cabot Global Stocks Explorer).
If you’re a growth investor with a reasonably high risk tolerance, the lesson for you doesn’t need spelling out. There are some stocks out there that you’ve never heard of in markets that you know nothing about. And if you have an experienced guide (that would be me) to show them to you, it can be very profitable. So don’t wait, and consider taking a trial subscription to Cabot Global Stocks Explorer. We grabbed seven double-digit winners just in the last few months, and one of our stocks delivered a 118% gain since April!
Fortune Cookie
Here’s this week’s Fortune Cookie. Remember, you can always view all previous Fortune Cookies here and Contrary Opinion buttons here.
“Paying attention is cheaper than paying fees.”
-Paul Goodwin
Paul’s comment: Tim is out of town, so I’m taking the opportunity to try out one of my own maxims. I’m a great believer in taking control of your own investment portfolio (or at least a part of it). For me, handling my own growth stocks gives me a better sense of how I’m doing and how the market is doing. Paying fees to some fund manager who only wants to beat a benchmark just seems wrong to me. My goals are higher than that, and it does me good to get my head in the game.
