Cabot Stock of the Week 338
My quest to add some growthy stocks with a cyclical dimension and downside protection brings us to our latest recommendation.
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The markets are governed by two overarching macrotrends: bull markets and bear markets. A bull market is defined as continuing as long as each successive advance of the primary trend peaks higher than the one preceding it. The converse is true for a major downward, or bear market.
It is difficult (some would argue impossible) for investors to precisely time these markets. That’s because markets often rise higher than most investors and analysts anticipate—and sometimes fall lower than they could possibly fathom.
For context, since 1926, a bear market has come along an average of about every six or seven years. The average bear market has lasted 1.3 years and with an average loss of 38%. And that number factors in the Great Depression. The average bull market has lasted 6.6 years with an average cumulative total return of 339%. Since 1926, it has been a bull market about 86% of the time.
There’s more than just timing, however. Investor sentiment is key—it’s the shift from risk aversion to risk-taking that bolsters stocks. There’s also the fear of missing out, or FOMO. In short, in mature bull markets, investors no longer fear losing money; instead, they fear that if they don’t buy an investment, they will miss out on a gain! They confuse lost opportunity with lost money!
Beware, however, that you can lose money even in bull markets. Individual stocks can go with or against the big trends. The two classic ways to lower your risk at the moment of purchase are buying on dips and buying partial positions with the intention of averaging up later. You can find all of this growth investment advice on the Cabot website.
To learn more, download our free report, 10 Forever Stocks to Buy Now–and How to Find the Best Growth Stocks.
My quest to add some growthy stocks with a cyclical dimension and downside protection brings us to our latest recommendation.
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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The market is hitting a little turbulence, which is natural as it feels its way across the timing of the pandemic economic recovery, concern over debt, interest rates, and inflation.
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The market has gotten a little choppy and interest rates are to blame. At least, that’s what they say. The market indexes fell last week and have been all over the place so far this week.
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Vaccines are being rolled out, and the economic recovery will be strong in 2021. Stocks that will benefit from the economic recover should have strong tailwinds. While our entire portfolio should benefit from an improving economy, two stand out to me.
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We’re watching market sentiment gyrate sharply between “the economic reopening will boost earnings” and “the economic reopening will boost inflation”. Both outcomes are likely.
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While some segments of the broad market have experienced a sharp correction over the past month (growth stocks in particular), the broad market has not fallen apart; in fact, many indexes hit new highs just last week. And, of course, today’s big jump rather...
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
More Cracks Appear
At the start of November we saw a couple of blastoff-type indicators flash green (like the Three Day Thrust rule), and that turned out to be the start of a powerful intermediate-term advance. During the next two-plus months, progress was relative there...
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You may have seen that a relatively new Explorer idea, Fisker (FSR), was up 38% yesterday. It turns out that my analogy of comparing the company to Apple’s relationship to Foxconn was truer than even I could imagine. The news yesterday was that Foxconn will be a..
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Earnings have been sensational. Reported earnings for S&P 500 companies have grown an average of 2% in the fourth quarter, compared to an expected -11%.
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The stock market is clearly accelerating the “reopening” trade. Small cap and cyclical stocks as well as commodity prices are surging, interest rates continue to tick up (the 10-year Treasury yield is now 1.38%, up from 0.92% at year-end), and novel financial vehicles SPACs,...
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Judging by some headlines and my Twitter feed, you would think the markets are in meltdown mode. But I just checked and the S&P 500 is only 1.9% down from its all-time high. And the Russell Micro-Cap Index is down 4.0% from its high...
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With the shares continuing to surge past our recently raised 65 price target, and now being priced at a premium to even our upgraded valuation metrics
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With this week’s recommendation, I’m swinging back to the more conservative side with a solid technology company poised for big gains from the 5G communications rollout.
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Some investors are bracing for the possibility that all this will lead to a surge in the cruelest tax of all – inflation.
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