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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College is an investment in your future. Training is an investment in long-term success. Cities invest in quality-of-life projects and a business might make an investment in product or service improvements.
The bigger question, however, is around what makes a good investment. And that answer is simple, in one way. If you get out more than you put in, that’s probably a good investment. The difficulty comes when you look at the stock market and see hundreds of stocks, along with ETFs, bonds, options, mutual funds, and index funds. You hear about large-caps, small-caps, blue chips, IPOs, and the pink sheets. And then there is value investing, growth investing, aggressive and conservative investing. It’s all so much. Where is an investor to begin?
First, take a deep breath. There are a lot of place you can get good investing advice. Here at Cabot we offer free advice on our website, through our daily investment emails, and through free reports that touch on subjects of interest to beginning and experienced investors alike. We also have membership options where you can get premium research, insights, and advice in the form of exclusive market reviews and summaries, as well as 14 different advisories.
But back to the topic at hand, what is a good investment? That’s a big question. What might be a great stock for one investor might not be a good stock for you.
For example, finding stocks that pay steady dividends is a great way to invest if you want to reduce risk, particularly if you can be confident that the dividends will not only continue but increase over time. Alternatively, if you’re chasing high returns and are comfortable with high risk, you can follow a momentum strategy. However, even a good momentum stock can drop like a stone on a bad day.
At its most basic, however, good investments have some things in common. If a business is fundamentally strong (i.e. it actually makes money), has a diversified product line, and is in a solid position in its market, you are 90% of the way to finding a good investment. The remaining 10% is just a matter of looking at a few parameters – no matter what the company does – to determine if it’s the best stock for your investment dollars.
And don’t forget that the objective is to make money, not to own every good-looking stock in the market. Historically, most successful investors have concentrated their investment portfolios in a few great stocks, and ridden those winners to big profits. That doesn’t mean you should put all your eggs in one basket. Our advice is that, when fully invested, you should own no fewer than five stocks, but put an upper limit at 12 or 15 stocks. There are three main benefits of good portfolio management.
To learn more about making good investment decisions, download our FREE report, How to Invest in Stocks and Other Investing Basics, today.
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 rise of financial technology has been a positive theme during the pandemic. With that in mind, these four fintech ETFs are worth your consideration.
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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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Today’s note includes earnings updates, ratings changes and the podcast.
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Suffice to say the last two weeks have been very tough. On the one hand, yes, of course some sort of correction or pullback has been expected given the huge progress the market – and growth stocks, small caps and IPOs in particular have...
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Suffice to say the last two weeks have been very tough. On the one hand, yes, of course some sort of correction or pullback has been expected given the huge progress the market – and growth stocks, small caps and IPOs in particular have...
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The sellers ran wild today, with the Dow losing 346 points, the Nasdaq falling 274 points (2.1%) and the average growth stock we own or watch down nearly 5%. From late January through late February, we began to see a change in character, a..
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With the market continuing to weaken we’ll move incrementally more into defensive mode until the smoke begins to clear and we can better distinguish the stocks that will emerge as the next leaders. While there is a lot we could say about just any...
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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 Big Idea
One of the unsung heroes of the online retail boom is a largely unknown technology – digital printing on fabrics and textiles.
While many traditional manufacturers and retailers of clothes, fashion items and home décor were destroyed during the pandemic, the inverse true...
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It's been a month since GameStop stock, Robinhood and Reddit captured America's attention. Here are some good things that came out of it.
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I’m tempted—I really am—to take some of our 46% cash position and move it back into marijuana stocks. Since the sector peaked three weeks ago, most of the stocks have had a decent pullback and now the best are moving up again, heading those...
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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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Arena Pharmaceuticals (ARNA) yesterday announced that olorinab failed to meet the primary endpoint in the Phase 2 CAPTIVATE study in IBS abdominal pain. This is disappointing but not remotely the reason to own (or sell) the stock. IBS is a difficult to treat condition when...
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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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After a rough week, the market is right back in business. Just when stocks appeared on the cusp of a deeper selloff, the S&P 500 started off this week with the best session since June.
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Once red-hot, the popular ARK Innovation ETF (ARKK) has gone cold. But there's a way to make money as it falls.
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Last night, Medexus Pharma (MEDXF) reported excellent results. Revenue increased 70% y/y to $31.5MM in the quarter. While that top-line number benefitted from ~$3MM of sales that slipped from last quarter to this quarter, it was nonetheless a very positive report. Adjusted EBITDA increased to from...
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