Stock Market Video
Sunny Days
This Week’s Fortune Cookie
In Case You Missed It
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Stock Market Video
In this week’s Stock Market Video, I look at the market’s current split personality: The broad market is just hacking along, but a cadre of growth stocks is performing like gangbusters. You don’t want to be heading for the deep end of the pool in this kind of market, but you do want to have some exposure to stocks with great stories and strong charts. I give a few of my favorites.
Sunny Days
Every year, usually on a Thursday in July, most of the Cabot crew gathers in Salem, jumps into cars and heads north. With bathroom breaks and a stop to purchase refreshing beverages (ahem), the group drives through New Hampshire’s tiny seacoast neck and winds up in Kittery, Maine, at the Chauncey Creek Lobster Pound. There, lobsters, baked beans, coleslaw, steamers, mussels and (importantly) chips are consumed and the store of tissue-restoring beverages is significantly reduced.
Here’s a picture of Tim Lutts, our fearless leader, giving a short history of his family’s long association with Kittery, including a possible role in persuading the owners of Chauncey Creek to start selling cooked lobsters. Note the red awning, white clouds and blue sky, as well as the traditional Red, White and Blue.
Then it’s back in the cars for the traditional visit to the Nubble Lighthouse in York, Maine, one of the most-photographed places in all of New England (and the competition is fierce). Here’s the crew (minus a few who didn’t make the trip, including Mike Cintolo who can’t really stand to be away from the market for a day). That’s me in the back wearing the hat that my dermatologist has made me promise to wear, on pain of unspecified nasty consequences.
With one more stop for ice cream, we wind up in York Village, where we engage in spirited competition on the Skee-Ball machines and other loud, coin-operated forms of entertainment.
All in all, it’s a grand day out, filled to the top with traditional Yankee summertime entertainments.
And why, you may be asking, am I going on about a day spent in enjoyable dithering and dallying?
The quick answer is that there is a time and a place for everything, including just having a good time. In New England, if you don’t jump into summer with both feet, the long, cold, gray winters will wear you down to a nub.
The market lesson is exactly the same. It’s not always summer in the market, and you have to enjoy the sunny days while you can. That means moving more heavily into growth stocks when they are doing well and heading into heavier cash positions when the market is doing its version of the long, cold, gray winter.
Right now, the broad market has been hacking sideways all year: The S&P 500 hit 2,094 on December 29, 2014 and traded at 2,092 earlier on Friday as I wrote this.
But the growth-ier Nasdaq Index hit a new high on July 20, and has scored many new highs this year.
Picnic on sunny days. Buy growth stocks when the market’s sun is shining on growth stocks. It’s a simple principle.
And if you would like to enjoy the benefit of having an experienced market veteran to tell you when to load up on growth and when to head for the refuge of cash, you should consider subscribing to one of Mike Cintolo’s advisories, Cabot Growth Investor or Cabot Top Ten Trader. Remember, he’s the one who didn’t spend the day with the rest of us grasshoppers. It’s good to have someone on your side who prefers keeping up with the stock market to ice cream and Skee-Ball. Just saying.
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This Week’s Fortune Cookie
Here’s this week’s Fortune Cookie. Remember, you can always view all previous Fortune Cookies here and Contrary Opinion buttons here.
“Seize the day, trusting tomorrow as little as possible.” or (as Horace himself actually wrote) “Carpe diem, quam minimum credula postero”: -- Horace (born 65 BC)
Tim’s comment: Every day provides an opportunity to make money in the market, and long-term success goes to those who work at it diligently, day after day. As for putting no trust in tomorrow, one of Cabot’s market guideposts says, “Thou shalt have no preconceived notions.”
Paul’s comment:
Horace, the Roman poet who was a favorite source of wisdom for America’s founding fathers, got this one right. And Cabot’s rigorous refusal to predict what markets might do in the future is perfectly in line with his skepticism. Don’t predict markets, follow them.
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In Case You Missed It
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 7/20/15 – You Call That a Bottom?
I write in this issue about the temptation to identify a stock at the bottom, which I actually did. Once. But it’s not a good idea, and I didn’t actually buy it. I also give a stock that I have followed for years that’s still in free-fall. Don’t be tempted. Stock discussed: Silver Wheaton (SLW).
Cabot Wealth Advisory 7/21/15 – Is Gilead (GILD) Overvalued or Undervalued?
Tim Lutts, the brains behind Cabot Stock of the Month, looks at the difference of opinion on the value of Gilead Sciences (GILD) stock. He concludes that it’s important to decide who you’re going to trust as an advisor and stick with that. Stock discussed: Ulta Beauty (ULTA).
Cabot Wealth Advisory 7/23/15 – What Will Rising Interest Rates really mean for the Stock Market?
Cabot Dividend Investor’s Chief Analyst Chloe Lutts Jensen takes a close look at what has actually happened historically when the Fed begins to increase interest rates. It turns out that markets haven’t been bothered much by rate hikes!
Have a great weekend,
Paul Goodwin,
Chief Analyst, Cabot China & Emerging Markets Report
