Issues
The election is over, a winner swiftly declared, and the Fed is set to cut rates again today. All of that is hugely bullish, as evidenced by the market hitting fresh all-time highs on Wednesday. But it’s even bigger news for small-cap stocks, which are historically overdue for a massive run. So today, we add a new small-cap stock whose name virtually everyone knows – and perhaps has indulged in themselves. That addition is part of a sweeping portfolio overhaul in our November issue, which includes two stocks reaching – actually eclipsing – our price targets, and our one true laggard getting the ax after a bad earnings report.
Lots to talk about today. Let’s get right to it.
Lots to talk about today. Let’s get right to it.
Updates
Tesla (TSLA) is getting lots of headlines these days, and for good reason.
Their CEO and founder, Elon Musk, was tabbed by President-elect Donald Trump to head up something called the Department of Government Efficiency (along with Vivek Ramaswamy); their stock price is up 57% in the last month; and the company is coming off its first truly encouraging quarterly earnings report in a year. Anyone who invested in TSLA a year ago, five years ago, or 13 years ago, when our Mike Cintolo first recommended the stock in his Cabot Top Ten Trader advisory, has made a LOT of money.
But another company has surpassed Tesla as the biggest EV seller in the world. And today, we add it to the Cabot Value Investor portfolio.
Their CEO and founder, Elon Musk, was tabbed by President-elect Donald Trump to head up something called the Department of Government Efficiency (along with Vivek Ramaswamy); their stock price is up 57% in the last month; and the company is coming off its first truly encouraging quarterly earnings report in a year. Anyone who invested in TSLA a year ago, five years ago, or 13 years ago, when our Mike Cintolo first recommended the stock in his Cabot Top Ten Trader advisory, has made a LOT of money.
But another company has surpassed Tesla as the biggest EV seller in the world. And today, we add it to the Cabot Value Investor portfolio.
Alerts
We are recommending shares of CNH Industrial (CNHI) as a new Buy. The company is a major producer of agriculture (80% of sales) and construction (20% of sales) equipment for customers around the world and is the #2 ag equipment producer in North America (behind Deere). It also provides related supplies, services and financing.
Strategy
I want to point out a problem that I foresee, potentially on the scale of the technology bubble in 2001 and the housing bubble in 2007. I think we’re going to have an “inverse ETF bubble.”
I was talking with an investor recently about the latest stock market downturn. He was puzzled; if General Motors (GM) is supposedly such a great stock and vastly favored among portfolio managers, why would it fall 30% during a market correction?
My stock-picking strategy has been refined over the course of 28 years, and has been quite stable for the last six years. My investment goals are (1) minimize stock market risk, (2) achieve capital gains, with dividends as a welcome addition to total return and (3) outperform the U.S. stock markets.
If professional investment companies are not making their decisions based on the price of the stock, neither should you.