Every few months, I compile and read the results of our welcome series survey, which is taken by our newest subscribers. And while we get asked a lot of different questions on the survey, there’s one in particular that I see repeated frequently: “What are the differences between Cabot’s publications?”
So today I’m going to answer some of the most frequently asked questions about Cabot Growth Investor. But first I want to introduce all of our publications.
You all know about Cabot Wealth Advisory, our free email newsletter that you’re reading right now, so I won’t dwell on it much, except to say that our goal here is to give you the tools you need to become a savvier, smarter and wealthier investor. I’m the editor and I love hearing from readers, so please don’t hesitate to email me or comment on our blog, http://www.iconoclast-investor.com. I read all the comments posted there, so if you leave one, I’ll see it.
Cabot Stock of the Week offers just one stock each week selected from one of our other publications. This investing strategy also allows subscribers to build a diversified portfolio of stocks. Cabot’s chief investment strategist and frequent Cabot Wealth Advisory writer, Timothy Lutts, chooses the stock and edits the advisory. Tim provides in-depth fundamental and technical analysis of his selection as well as regular updates on previous stocks featured in the Report, so you have continuous guidance.
For aggressive investor interested in faster-paced stocks, Cabot Top Ten Trader is the newsletter to follow. Top Ten brings investors the 10 stocks with the greatest momentum in the market each week. Top Ten is probably the #1 source of new ideas available, as many stocks are discovered here very early in their big upmoves. The Report is for aggressive investors who want the first few steps of the process done for them (find the best stocks, find out why they’re strong, get a suggested buy range, get some follow-up advice, etc.) but can make decisions from there. Michael Cintolo, who also edits Cabot Growth Investor, selects the stocks and edits the report with the help of OptiMo, our proprietary stock picking software.
If you’re looking for diversification outside the U.S., Cabot Emerging Markets Investor provides guidance on which stocks are hot in the BRIC (Brazil, Russia, India, China) countries. This report uses all of Cabot’s time-tested growth investing techniques to select stocks that trade as American Depositary Receipts, or ADRs, on U.S. exchanges. These countries’ economies are growing fast, providing enormous profit opportunity. Chief Analyst Paul Goodwin, veteran writer and researcher, has guided the letter to the #1 spot in 2006 and 2007, with gains of 78.6% and 74.1%, according to Hulbert Financial Digest. Cabot Emerging Markets Investor was also recently named the top-performing newsletter for the past five years on a risk-adjusted basis by Hulbert. The report gained 12.2% for the five years ending March 31, 2009, trumping the -27% return for the Dow during that time.
If you prefer conservative investments in well-known companies, and Cabot Benjamin Graham Value Investor was made for you. Edited by J. Royden Ward, a longtime investment researcher and analyst, the advisory contains two different value-investing models and all the details you need to invest safely over the long term. Roy recently added bonds to one of his portfolios to help subscribers diversify and stay safe during volatile periods in the market. If you prefer to buy and hold, and invest safely over the long term, this is for you.
Cabot Small-Cap Confidential is a limited-subscription publication whose editor, (only 500 subscribers are allowed) Tyler Laundon, a lifelong investor, provides in-depth research about one company a month with revolutionary new technology that over time will grow into a winning investment. The stocks in this advisory are usually low priced and highly volatile, meaning they can go up, and down, very fast. Most of these stocks are undiscovered by analysts and institutional investors, giving you a chance to get in while their prices are still low. This advisory best serves experienced investors who aren’t afraid to take a risk.
Cabot also publishes two digests: Wall Street’s Best Investments and Wall Street’s Best Dividend Stocks, which we purchased last summer. The digests present investment ideas from the best minds on Wall Street selected from more than 250 investment newsletters. During the last 27 years, thousands of investors have benefited from ideas and recommendations found in the Digests, publications featuring market insights and informed recommendations from the top minds in the business. The editor, Nancy Zambell reviews hundreds of financial newsletters and institutional research publications and after careful screening, she brings 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. Both digests are monthly.
Now onto your questions about Cabot Growth Investor.
Question: How long has Cabot Growth Investor been around? Who is the editor?
Answer: Cabot’s founder, Carlton Lutts, started Cabot Market Letter in 1970. Michael Cintolo now edits Cabot Growth Investor, applying the same time-tested systems that have worked throughout the years. Mike discovered a love of the stock market when his father subscribed to Cabot Market Letter more than a decade ago. He uses his experience timing the market and picking growth stocks to build the Letter’s Model Portfolio, which contains up to 12 lesser-known growth stocks at any time.
Q: Who would benefit fromCabot Growth Investor?
A:Cabot Growth Investor is recommended for all investors seeking growth stocks. The advisory, of course, is mainly about performance, but it’s also about education—teaching you how the market actually works, not just how pundits think it works.Cabot Growth Investor strives to educate investors by discussing the fine points of chart reading, investor perception and constantly reminds subscribers of the rules to follow to execute a successful investment strategy. We believe the more educated our subscribers are, the more they will benefit from the lessons we’re teaching and stocks we’re recommending.
Q: What’s included in a subscription?
A: Cabot Growth Investor is published bi-weekly, with updates during the weeks without regular issues. It contains a Model Portfolio of no more than 10 stocks of Cabot’s best recommendations for a diversified growth portfolio. In addition to the bi-weekly issues of Cabot Growth Investor, a subscription gives you access to a password-protected website, telephone hotline, email alerts/bulletins and email contact with the editor.
Q: How are the stocks chosen?
A: The stocks chosen for the Model Portfolio must fit into Cabot Growth Investor investment philosophy. That means investing in fast-growing companies with potential for further growth of sales, earnings and investor perception. As you study the stocks in these growth industries, you should favor lesser-known stocks that have yet to reach the point of peak perception. The philosophy also advocates buying stocks with strong relative performance (RP) lines, meaning you should buy stocks that are consistently outperforming the market. This is a good indication that they are under accumulation by the big-money crowd, week after week, month after month, and that the companies are succeeding. Diversification is also important, and our Model Portfolio’s 10 stocks provide plenty of that. Smaller investors can do well with as few as five stocks, but you should never have all your eggs in one basket.
Q: How long are the stocks held?
A: The average growth stock is held for a few months, but some are held for years and others for weeks. What really counts is how they perform–we try to hold our winners while cutting losses short, making sure no one stock does any great damage. The key concept to keep in mind with these stocks is that investors’ perceptions are usually ahead of the news. Even though we have high hopes for all these stocks, because their fundamental growth stories offer the potential of great future earnings growth, you take any news about your stock with a grain of salt. But you pay particular attention to what the chart is telling you, and when the chart tells you that investors are no longer supporting the stock, you sell the stock and move on.
Q: How do you use market timing in Cabot Growth Investor?
A: Be cautious when the broad market is against you and aggressive when it’s with you. Don’t underestimate the power of the market to move stocks, both up and down. When Cabot’s market timing indicators are signaling a bull market, the trend is up, so stocks will be going up. Buy your favorite stocks and hang on as long as the ride is profitable.
Q: Do you advise subscribers about when to sell a stock?
Yes, we always advise investors to cut losses short. No matter how hard you try, you are going to select stocks that go against you as soon as you buy them. Get rid of these stocks quickly! It’s also important to sell a winning stock when it loses its positive momentum. This is a clear indication that other investors are selling too. And a lot of them know more than you do. So don’t wait for the company to tell you about the bad news. Sell first and read the bad news later.
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, I have links below to each issue.
Cabot Wealth Advisory 4/13/09 – Repair Your Portfolio With Dividends
On Monday, Timothy Lutts wrote about the repeal of mark-to-market accounting and how it will affect the banking sector. Tim also wrote about why investments that provide income, such as those paying dividends, can be a great way to weather the market’s storm. He specifically mentioned Magellan Midstream Holdings (MGG), which was recently featured in Dick Davis Income Digest.
Cabot Wealth Advisory 4/16/09 – Leaders Ready for Lift-Off
On Thursday, Michael Cintolo wrote about how to handle losses in your stock portfolio and what you can learn from them. Mike also wrote about for different ways you can deal with earnings season. Mike finished by writing about two stocks that he thinks are potential earnings winners. Featured Stock: Amazon.com (AMZN) and Visa (V).