The Value of Education
America A Land Of Enormous Impossibilities
Stock Market Video
In Case You Missed It
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In the 2008 book “Outliers: The Story of Success,” author Malcom Gladwell theorizes that it takes 10,000 hours of practice in order to become a master at a task. This applies to anything, whether it’s playing the piano, cooking, writing novels or even investing in the stock market.
If you were to actively embark on this “10,000-Hour Rule,” you would need to carve out four hours of practice time, every day, for slightly less than seven years. That’s four hours each and every day, without breaks, for three-quarters of a decade.
Want to become an expert at the stock market? Better find a way to spend four hours a day, seven days a week for much of a decade on intense study to do it.
But what if you don’t have that time?
Say you have young children, or a sick parent or a really intense job that forces you to bring your work home every night. Add in social obligations, leisure time and even activities as basic as sleeping and eating, and the available time for learning something new shrinks significantly.
For the beginning investor who has commitments and obligations throughout the course of the day, the very idea of having four hours per day to devote to any learning task is akin to building the Great Wall of China with beach sand and a trowel.
Let me be clear. Just because you don’t have four hours a day to devote to learning how to invest doesn’t mean you can’t do it. You may not reach the so-called “expert” status that Gladwell talks about in his book, but it doesn’t take expert-level knowledge to make money in the stock market.
All it really takes is the willingness to learn how. A little education goes a long way towards improving your results as a beginning investor. Whether it’s learning precisely how to read a stock’s chart on Google Finance, or finally figuring out which price-to-earnings ratio is the best one (briefly: a low P/E means the stock is cheaper to buy), knowing more about how people talk about stocks improves your chances of choosing a winner.
By now, you’ve either stopped reading or started wondering how to go about learning how to invest. The way I see it, there’s two options for the beginning investor looking for an education in the stock market. The first is to hire someone who’s already achieved their 10,000 hours ... someone like Mike Cintolo, editor of Cabot Market Letter and Cabot Top Ten Trader.
All of the editors of Cabot newsletters have reached the 10,000-hour goal in their respective investing systems, but Cabot Market Letter is unique among our publications. In each issue, Mike discusses a market trend or offers up a lesson on investing topics designed to educate readers and make them better investors. This article, which runs on page five every issue, has in the past touched on timely issues such as whether or not to buy stock in the forthcoming Facebook IPO and evergreen topics such as what to do during earnings seasons. Subscribers to Cabot Market Letter also get the chance to read the Market Letter Library, where select page five topics are stored for your reading later. Click here to take Cabot Market Letter for a test drive.
The second option is to independently educate yourself on investing. There’s enormous value to this approach, and that’s the reason Mike Cintolo created a new video designed to educate the beginning investor on how we choose the stocks that go into the Cabot model portfolios. The 17-minute video is jam-packed with topics of interest to the beginning investor, including an explanation of the SNaC method (Story, Numbers and Chart). You can watch the video by clicking HERE, and I encourage you to take the time to do so.
It’s been said many times before, and from a variety of people, that education is a silver bullet through which a person improves himself or herself to make a better life for future generations.
When you learn how to read a stock chart, or the best way to choose undervalued stocks to maximize your gains or any other investing topic ... this “silver bullet” concept translates to your pocketbook in a very real way. I’m not saying spending four to eight years in higher education to learn a marketable skill doesn’t directly affect your income, but investing in the stock market has the ability to do this in much more immediate fashion.
That’s why it’s important to spend time learning the ins and outs of investing. After all, it’s easier to lose money on poor investments when you’re not informed. So read all the reports and investing books you can find and rely on Cabot advisories, because there’s no such thing as too much education when it comes to investing.
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Here’s this week’s Contrary Opinion Button. Remember, you can always view all of the buttons by clicking here.
America A Land Of Enormous Impossibilities
It means the opposite, of course. It means that every enormous success came about because someone--a risk-taking, highly motivated person or company--worked hard to find a solution where everyone else had seen only impossibilities. For centuries, America has been the most entrepreneurial culture in the world, and our main hope for continued success is that we continue to nourish and motivate our creative, entrepreneurial culture.--- In this week’s Stock Market Video, Cabot China & Emerging Markets Report Editor Paul Goodwin says it’s hard to argue with a market that’s going up. Paul also talks about the “wall of worry” and how you can act contrary to investor fear to make money. Featured stocks: Seaspan Corporation (SSW), Apple Inc. (AAPL), China Mobile Ltd. (CHL), Caterpillar Inc. (CAT) and HDFC Bank Limited (HDB). Click below to watch the video!
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 2/20/12 - Five Reasons to be Bullish Today
On Monday, Cabot Publisher Timothy Lutts outlined the reasons it’s a good idea to be bullish in today’s stock market. He included a column by Cabot Market Letter and Cabot Top Ten Trader Editor Mike Cintolo on the value of planning ahead. Featured stock: Tesla Motors (TSLA).
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Cabot Wealth Advisory 2/23/12 - Protect Your Gains and Reduce Your Losses
On Thursday, Cabot Benjamin Graham Value Letter Editor J. Royden Ward discussed a new system he developed based on Accelerating Earnings and Earnings Momentum, which is designed to protect investment gains while reducing losses. Featured stocks: Apple (AAPL) and Green Mountain Coffee Roasters (GMCR).
Happy investing,
Matthew Delman
Editor of Cabot Wealth Advisory