The Strongest Year Yet
Do Not Scratch The Stock Will Hatch
Stock Market Video
In Case You Missed It
Every September, we celebrate the anniversary of Cabot Small-Cap Confidential and this year is no different. In honor of this occasion, I’ve conducted a Question and Answer session with the editor, Thomas Garrity. I’m bringing it to you in two parts; today you’ll read part one and next week I’ll bring you part two. I hope you enjoy it!
What are your thoughts on the four-year anniversary of Cabot Small-Cap Confidential?
As always, I’m grateful for the trust our loyal subscribers have placed in our dedication to deliver top-notch performance-based investment research. Most pleasing to me as Cabot Small-Cap Confidential reaches its fourth anniversary is a realization that our efforts are having a meaningful impact on the portfolios and well being ofCabot Small-Cap Confidential subscribers.
As far as stock picking goes, we’ve enjoyed a considerable number of home runs recently. These are some of the recent gains that subscribers have locked in: MAKO Surgical (MAKO), up 58%; EZ-Chip (EZCH), up 55%; Oncothyreon (ONTY), up 65%; and QuickLogic (QUIK), up 186%, among others. The last year has brought more winning stock picks for Cabot Small-Cap Confidential than at any other time since inception. Needless to say, it’s been a great ride to the bank. But I know that you really want to know what’s in store for the future, not hear a re-cap of what has passed.
Current subscribers already know the answer to this. Those of you just getting started with us will begin to understand as you follow my guidance. The profit opportunities we seek are rooted in our investment history. I have always researched and pursued companies with products or solutions that target large addressable markets or patient populations in an attempt to mitigate investment risk, while pursuing a higher return on investment.
In addition, I’ve remained static in my investment discipline when it comes to dealing with tumultuous financial markets and avoiding the emotions that influence the direction of equity prices. We know the stocks we own and the end-markets they serve intimately, and so we don’t allow price volatility to dictate our investment strategy.
However, we’ve learned to actively manage our risk with the various stocks we recommend, so our pursuit of higher returns are now focusing more on managing risks than when we first started. I believe Cabot Small-Cap Confidential’s fifth year will be it’s strongest yet.
How does the lingering weak economy affect your stock picks and outlook on the market?
I consider myself to be a stock picker and researcher. My investment decisions gravitate toward companies that have huge growth resulting from unique technological developments, medical breakthroughs or a novel processes for the production of goods. My objective is not to identify when the economy may recover, rather I am focused on owning tomorrow’s great business model. I want our subscribers to be positioned in stocks that will take full advantage of what lies around the corner for these companies as a result of particular advancements.
At the outset, not every company we invest in will be profitable, as we are typically involved early in the product life cycle. However, it is our objective to be invested in businesses that will eventually exhibit sustainability in earnings and prosper in a variety of economic scenarios by virtue of their advancements in technology or health sciences. Identifying key thematic stories, those companies that can be expected to have significant control over their end-markets, has always been our area of expertise. Who wouldn’t love to own the next Apple (AAPL) or Microsoft (MSFT)?
Our investing decisions are not strongly influenced by opinion regarding the economy. The individual stocks in our portfolio focus on niches and innovation, which suggests rapid earnings growth that will be rewarded by the marketplace in time. Our long-term philosophy doesn’t involve making investment decisions solely on stock market or economic conditions. We don’t throw in the towel during extreme negative swings because our high-potential small-cap stocks are timeless.
Above all, as long as we stick to what we know best, which is to identify high-potential small-cap stocks in a sea of many imposters, we will continue to succeed.
What advice would you offer to someone just starting out in investing?
Know what you’re invested in, keep abreast of the company’s progress at all times, and never invest on a hot tip. Don’t fall in love with your stocks, and always be prepared to get out of them if the reasons you originally decided to own the stocks have materially deteriorated and indicate further investment loss is imminent.
I hope you enjoyed part one of my Q&A with Tom. Don’t forget to read part two in next Saturday’s Cabot Wealth Advisory. If you’d like to learn more about Cabot Small-Cap Confidential--and take advantage of our Limited Time Anniversary Price Rollback--click here now!
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Now for this week’s Contrary Opinion Button. Remember, you can always view all of the buttons by clicking here.
Do Not Scratch The Stock Will Hatch
Cute. A simple plea to the value investor for patience. Of course, the button is true only if those stocks have been properly analyzed. Conditions can change, and value investors do sometimes need to reconsider and sell at a loss.
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In this week’s Stock Market Video, Cabot Market Letter Editor Mike Cintolo says that the market has really fallen back into the soup this week, so it’s time to head into your storm cellar. Mike talks about Cabot’s trend-following market timing indicators, the current state of the market and some stocks that are still resisting the downtrend. Stocks discussed: Apple (AAPL), Amazon.com (AMZN), Under Armour (UA), Universal Display (PANL) and MAKO Surgical (MAKO). Click here to watch!
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 9/19/11 - Ice Islands and Arctic Cowboys
On Monday, Cabot Global Energy Investor Editor Brendan Coffey explained several of the ingenious ways that the energy industry is developing to harness energy resources. One involves creating ice islands to prospect for oil in Alaska. Another--more investable technology--involves developing the best ceramic proppant to more easily extract oil. Featured stocks: CARBO Ceramics (CRR).
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Cabot Wealth Advisory 9/20/11 - Dollar Store Stocks and a Weak Economy
On Tuesday, Dick Davis Digests Editor Chloe Lutts discussed three stocks in the dollar store industry. All are benefiting from the still-weak U.S. economy and are experiencing excellent sales growth. And they were all recently featured in the Dick Davis Investment Digest. Featured stocks: Dollar Tree (DLTR), Dollar General (DG) and Family Dollar (FDO).
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Cabot Wealth Advisory 9/22/11 - Top 10 Super Companies
On Tuesday, Cabot Benjamin Graham Value Letter Editor J. Royden Ward discussed the importance of dividends when investing in the stock market and how to know which dividend-paying companies are solid investments. Roy also released an updated list of his top 10 super companies. Featured stocks: Abbott Laboratories (ABT), Caterpillar (CAT), Chevron (CVX), Walt Disney (DIS), International Business Machines (IBM), Microsoft (MSFT), PepsiCo (PEP), TJX Companies (TJX), Walgreen (WAG) and Wal-Mart Stores (WMT).
Until next time,
Elyse Andrews
Editor of Cabot Wealth Advisory