We at Cabot are a small company, almost a family of sorts, and that means we’re comfortable in our own skin. And that, in turn, thankfully means that our dress code is distinctly business casual-khakis and a collared shirt, for instance, is standard dress Monday through Thursday. Friday is for jeans!
(I’m reminded of a story when Paul Goodwin first interviewed here a few years ago, wearing a sharp suit. He jokingly told Tim that he was wearing a suit so that Tim knew he had one. Tim’s reply: He didn’t want to see him wearing it to work ever again ... unless we were taking photos. But I digress.)
I’m all for casual dress, of course, but I still like to look sharp during important events and outings. So when it came time to make a decision about my wedding, I decided to axe the tuxedos, and instead go with a nice-looking suit and tie. It would be somewhat more casual than a normal wedding, and it would fun to pick out suits for the groomsmen. I’ve already written about my suit-buying experience--it was tougher than I imagined.
Wedding Tie Proves Difficult to Obtain
But it was nothing compared to picking out ties!
A couple of Thursdays ago, my fiancée and I decided to walk around the Back Bay and pick out some great ties for the wedding. I saw many snazzy blue ties ... but then discovered that the bridesmaid’s dresses were not blue, but “ice blue.” No problem, I told myself. Between all the stores around my area, there were bound to be dozens of classy choices.
Eh ... not so much.
As it turns out, ice blue ties aren’t exactly mass-produced. I’m not sure who makes these decisions, but apparently, ice blue for a dress is accepted, but ice blue ties are an endangered species. We must have visited five or six large establishments and, out of probably 500 ties, we might have seen one or two that matched. Finally, we found a group of ties that filled the bill, and were able to buy four of them for the groomsmen.
Now, I could have been satisfied with that ... but I decided that I, as the groom, wanted to look unique on my own. So now we had to find a tie that matched the bridesmaids, matched the groomsmen, AND made me look like the groom I always wanted to be. Call it a case of wedding vanity.
So our search went on, through places big and small and expensive (I saw ties selling for $150 and $200; I nearly asked the salesman whether they were made of gold or came with a free dinner). Tempers began to fray. I nominated things that were nearly ice blue. Rejected. My fiancée liked a near-ice-blue tie that had flowery patterns in it. Rejected.
After an hour, tensions were rising, so we did what any loving couple would do-we hit the nearest restaurant (Legal Sea Foods), ordered way too much food and a big bottle of French Pino Gris, and talked about less-stressful things.
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The irony of this tale is that, a few days later, my fiancée went out with her good friend and co-worker during lunch, and in about 20 minutes, found three great ties for me to wear on the wedding day. The choices are so good that I’m having difficulty deciding which to choose!
In other words, despite all our planning and effort on that initial tie run, we made little progress, and frustration levels boiled over. A few days later, we (OK ... my fiancée) made great progress, despite it being a brief trip during lunch break.
Lessons From Tie Shopping Apply to Investing
There are a few morals of this story as it applies to investing:
First, you can’t force things. The market and your stocks aren’t going to do what you want to do all the time ... and even if they do, they won’t necessarily do it on your time schedule. That’s why it’s important to have a system, and to practice patience once you’ve made a commitment.
Second, if you sell out and effectively take a step back, you’re going to see things in a clearer light. When we were visiting our tenth store, all our eyes could see were different shades of blue. But a few days later, on a quick trip, my fiancée was able to find a bunch of good matches, having cleared her head for a few days.
Third, you should never get discouraged (I know, I know ... easier said than done). As long as you don’t make any big mistakes, all it takes is one or two good stocks (or ties) to completely change your outlook. Instead of being behind the curve, all of a sudden you’ll be outperforming the market by a wide margin.
That last point is particularly timely. The market continues to do ... OK. This week saw a couple of nice upmoves by the major indexes, but leading stocks are still consolidating. The number of stocks actually hitting new highs is pathetic, so most of the strength is from stocks coming off their lows. That’s all well and good, but it usually doesn’t correspond to a long-lasting bull move, as those off-the-bottom stocks usually expend so much energy getting near their old peaks that they run out of gas on the way up. It’s like a basketball team that falls behind by 20 in the first half, makes a huge comeback ... but then slips toward the end, as the team has exhausted its energy during the comeback.
That doesn’t mean the leadership won’t broaden next week, and when it does, I’m confident there will be plenty of winners to go around. Do I get discouraged? Of course! You should see me during tough market days! But I also realize that just one or two solid winners will more than make up for any whipsaws I’ve encountered this year.
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We just received the news that, not only is our Cabot China & Emerging Markets Report the #1 publication in the country during the past 12 months, but our flagship Cabot Market Letter is the #4 newsletter over the past 12 months (to learn more, go to http://www.cabot.net and check out the News and Features section on the home page). Put simply, we’re proud of that record; a lot of hard work-and some good luck-went into it.
So today I’m going to write about a stock written about in Cabot Market Letter a few weeks ago that is still setting up in a base. It’s a solar stock ... one that is growing lightning fast ... but is owned by fewer than 20 mutual funds so far; making is a higher risk/higher reward situation.
Chinese Solar Stock
It’s Canadian Solar (CSIQ). Here’s what I wrote about it in the April 10 issue of Cabot Market Letter:
“Despite being incorporated in Canada, this is a Chinese solar cell manufacturer from its CEO right down to its factories. Canadian Solar doesn’t have a key technological advantage; it’s just a well-run company with an amazing record of quarterly sales increases going back to the middle of 2004. Revenues grew 344% in 2007, and analysts estimate that 2008 earnings will soar 416%. The company also distinguishes itself by running one of the biggest silicon reclamation operations in the world, helping to keep costs down and supplementing supplies of this vital commodity. Canadian Solar has scored a majority of its enormous revenue growth from the subsidized German market, but two grid-connected demonstration power projects in China, one 10KW and one 30KW, may point to its next big opportunity.”
I like the fact that the company has secured all the raw materials (silicon, wafers, etc.) it needs for the rest of 2008, and I also like that management is using more metallurgical silicon in its solar cells, which cost far less regular silicon.
The real excitement comes from the 250%, 447% and 423% revenue growth the past three quarters, as well as booming earnings the past two. The firm will report its first-quarter results on May 13, and the stock is working to shake out the last of the weak holders. It’s not a strong buy, but if you’re game, you could nibble on some around here, and then look to buy more on a decisive, powerful breakout above 28.
All the best,
Mike
Editors note: Michael Cintolo is Vice President of Investments at Cabot, as well as editor of the Cabot Market Letter, the firm’s flagship product. As mentioned above, it’s been the #4 performing newsletter (according to Hulbert Financial Digest) in the country during the past 12 months. Its Model Portfolio has outperformed the market by 30% since the start of 2007! It achieves this by using time-tested methods to invest in the market’s new, emerging leading stocks. Last year’s triple-digit winners included First Solar and Crocs, while other winners during the past few years include XM Satellite Radio, Google, Apple, and eResearch. If you want to duplicate this kind of performance, take a no-risk subscription to the Cabot Market Letter today.
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P.S. If you’d like to discuss this or any other issue of Cabot Wealth Advisory with your fellow subscribers, go to the Cabot Forum, http://www.cabot.net/forum, and register a unique username and password. You can also ask one of our editors a question in the Ask the Editors section, and your question might even appear in a future issue of Cabot Wealth Advisory. So head on over to check it out, and keep reading to see if your question appears!
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