How did you react when you learned that Donald Trump had fired FBI Director James Comey? Did you laugh? Did you cry? Or did you reflect, as I did, on this old quotation from Jean de la Bruyere and/or Horace Walpole? “Life is a tragedy for those who feel, and a comedy for those who think.” Or did you simply ignore it, just as today’s stock market has been ignoring all the unusual political developments in recent months?
Tuning Out the Noise
From an investment point of view, ignoring the political turmoil has paid off best. Investors who’ve simply kept their money in index funds have seen their accounts grow roughly 10% since the election.
And investors in top-performing stocks have done even better!
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For example, our flagship advisory service, Cabot Growth Investor, is holding nine stocks now; the average profit is 40% and the biggest profit is 295%.
Cabot Small-Cap Confidential, meanwhile, is holding 11 stocks; the average profit is 29% and the biggest profit is 109%.
And then there’s my own Cabot Stock of the Week, which has 19 stocks now; the average profit is 64% and the biggest profit is 1,020%.
If your portfolio looks as good, congratulations; you know what you’re doing. But if your portfolio has been lagging—perhaps you held some losers like Ford (F) and Yelp (YELP) too long, or perhaps you just stayed in cash too long, afraid of the political situation—you need our help.
And the good news is that it’s not too late to start!
Sure, you may have missed the post-election kickoff, and the start of the great 2017 bull market, but I want to reassure you that our Cabot time-tested market-timing indicators are telling us there’s plenty of upside ahead.
Even investors starting today can expect major profits by year-end!
How can I be so sure?
Well, I’ve been working at this for more than my entire adult life, and there are three factors in particular that combine to make me very bullish.
Growth Stocks Today’s Stock Market Leaders
One is the market’s long-term trend.
Our Cabot Trend Lines have been bullish more than a year, and as every chartist knows, the trend is your friend. Trends typically go farther and last longer than most people expect.
Two is the fact that the large-stock indexes (the Dow and S&P 500) are being outpaced by the growthier stocks in the Nasdaq Composite.
When the market generals (the large-cap stocks) are rushing higher but the troops (the growth stocks) are reluctant to follow, that’s a warning sign for investors. But when the troops are leading and the generals can’t keep up, like in today’s stock market, that’s a great sign that the bull market has months more to go.
Last but not least is the situation I referenced above. Politically, the Western world is a bit of a mess. Brexit will be long and painful; France has a new leader who doesn’t represent either of the established parties; and here in the U.S., well, I don’t need to tell you how unsettled it all seems.
But today’s stock market doesn’t mind. In fact, there’s an old saying that bull markets climb a wall of uncertainty, and I dare you to remember a time as uncertain as today when it comes to the governing of our country.
Thus, if you can put those fundamental worries behind you and focus on following tried-and-true investment strategies, you can make a bundle of money in this market.
One Large-Cap Growth Stock to Buy
And I’d love to help you do it!
Just last week, for example, I recommended for my Cabot Stock of the Week readers a large-cap stock (it’s definitely a general) that I think will do very well in the months ahead as those generals work to catch up to the foot soldiers.
But this is no steady-Eddie widows-and-orphans stock; this company grew revenues 49% in the first quarter of 2017—and that’s organic growth!
At the same time, this company saw earnings surge 73%, as huge digital efficiencies drove increasing dollars straight to the bottom line. As a result, I’m seeing more and more institutional investors climb on board this stock—and their buying is driving the stock higher.
And the cool thing about the whole setup is that the stock is not even expensive. While earnings growth is expected to decline a bit next year, the stock’s price/earnings ratio on this year’s expected earnings is just 30—way below the projected earnings growth rate!
Turning to the stock’s chart, I see a long uptrend, interspersed with normal corrections. The stock’s last major correction ended at the end of 2016, and the stock has been motoring higher since. But unlike many small-cap stocks, this large-cap stock is not extended now; in fact, it’s spent the past two weeks building a base, consolidating its latest advance.
Putting it all together, this stock has growth, it has value, and it has a bullish chart.
I think the current base presents a decent entry point, and I’d love to have you join my regular readers of Cabot Stock of the Week, who are profiting from this large-cap stock—and this bull market—now.
For details, click here.
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