Winding Up and Winding Down

Stock Market Video

Winding Up and Winding Down

Don’t Confuse Brains with a Bull Market

In Case You Missed It

In this week’s Stock Market Video, I point out that we’re in a nice market rally, and that you should be getting more heavily invested. This isn’t a full-fledged bull market, at least not yet. But stocks in both the U.S. and emerging markets are trending higher as major impediments like the Fiscal Cliff appear to be nearing a resolution.

So it’s not time to push all your chips to the middle of the table, but a little buying is in order. And if the results you get are good, you can up your exposure as your profits rise. Stocks discussed include a couple of turnarounds: Abercrombie & Fitch (ANF) and Computer Sciences Corp. (CSC), a couple of big stories: Cree (CREE) and Melco Crown (MPEL), and a couple of great setups: PVH Corp. (PVH) and (AMZN). Click below to watch the video!

Abercrombie & Fitch (ANF), Computer Sciences Corp. (CSC),

Winding Up and Winding Down

This time of year, it can seem like someone has installed a short-order kitchen in your head … and it’s breakfast time. After a year that was anything but relaxing, the onslaught of holiday shopping, parties, monitoring the Fiscal Cliff cliff-hanger, wrapping up work ahead of vacations, wrapping and trimming, making the appropriate preparations for the Mayan Apocalypse, etc. can seem like too much for mere mortals to put up with.

But put up with it we will, and it’s likely that we’ll retain enough of our sanity and sense of humor to celebrate the season in style. After all, even with the occasional hiccup as Fiscal Cliff negotiations grind on, the market is looking healthier than it has for a long time. Energy and basic materials stocks are thriving, and even the downtrodden financials are putting on a nice show.

I don’t have any advice for you beyond my admonitions to myself: More carols, less eggnog; more visits with friends, less football; and try to get in touch with some friend or relative that you haven’t talked with for a while. I have a feeling that 2013 is going to present us with plenty of opportunities right from the get-go. And facing it with fresh batteries can only help.

I hope you have a great Christmas (or holiday of your choice) and I look forward to writing for you—and hearing from you—next year.

Next week, the Weekend Cabot Wealth Advisory and Cabot Video Review will both feature a review of the year in verse. I hope you enjoy it.

Here’s this week’s Contrary Opinion Button. Remember, you can always view all of the buttons by clicking here.

cabot heritage corporationDon’t Confuse Brains with a Bull Market 

Tim’s Comment: Attributed to Humphrey Neill, who founded the Contrary Opinion Forum in 1963. When the profits pile up in the latter stages of a bull market, it’s easy to think your superb analytical skills are responsible. But the experienced investor knows the danger of hubris. He knows to give the bull market most of the credit … and he remembers that when the bull turns to bear, and 95% of stocks turn down, cash will be more valuable than all his brainpower.

Paul’s Comment: I’ve succumbed to the temptation to think that I have the market all figured out at least twice. And both times, the market has been kind enough to correct me in the most direct way possible. Take the profits, but remember that the market takes as well as gives. You’re neither as smart as the bull makes you believe, nor as dumb as the bear makes you feel.

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 12/17/12—Waiting for Godot

Technical wizard Robin Carpenter of Cabot ETF Investing System looks at the finer points of allocating ETF sector investments. He uses both volatility-versus-the-market and absolute volatility to explore the topic, but leaves the risk decisions to you.

Cabot Wealth Advisory 12/18/12—Finding Stocks to Hold Forever

Tim Lutts, editor of Cabot Stock of the Month, writes in this issue about the strategy of buying stocks and holding them pretty much forever. If you pick the right stocks, giving them unlimited time can pay off big. Stock discussed: EOG Resources (EOG).

Cabot Wealth Advisory 12/20/12—Three Stock-Trading Takeaways from 2012

In this issue, Cabot Market Letter chief Mike Cintolo describes the benefits of taking a look at your results for the year and describes some of the lessons he learned in 2012. Stock discussed: Oasis Petroleum (OAS)

Happy Holidays,

Paul Goodwin
Editor of Cabot China &Emerging Markets Report
and Cabot Wealth Advisory


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