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investors Archives

What are Investors?

There are two types of investors. And the most successful all have something in common.

Would it be fair to say that the most skillful investors have taken to heart a famous line from J.R.R. Tolkien’s The Hobbit? True, tales of dragons and wizards have little to do with the stock market. There is, however, a quote from the book that exemplifies the investing approach of some of the world’s greatest investors.

“The world is indeed full of peril and in it there are many dark places. But still there is much that is fair.” 

More to the point, investors may face volatility, downturns, recessions, depressions, and bear markets. Smart investors take this all in stride. They plan carefully, and they seek out the bargains and the promising stocks that push their portfolios ever upward. In short, no matter what approach an investor takes, the most successful of them seek out the “much that is fair.”

As for the two types?

Value investors identify companies whose stocks are selling at low valuations, and hold them until they are substantially higher. Value investors believe that buying a stock is comparable to buying a portion of the business. Thus, a value investor is not concerned about short-term changes in the stock price as much as the long-term business performance such as earnings growth, competitive positioning, etc.

Growth investors like to put their money into stocks that are going up. Growth investing involves investing in fast-growing companies that are typically less established than blue-chip companies such as Qualcomm (QCOM), Google (GOOGL) and Exxon (XOM). Those global behemoths were once growth stocks themselves, but their period of rapid growth is behind them. The best growth stocks are smaller companies whose best is ahead of them.

The point isn’t that any of these built-in preferences for different kinds of stocks is wrong. Low-priced stocks are more volatile than higher-priced stocks, and they can make very satisfying gains very quickly. (Of course they can go down just as quickly, but let’s leave that out for now.) Similarly, value stocks, while they may take a long time to get back to fair value, do have lower downside risk.

The reality of the market is that every investment portfolio ought to have some of both value and growth in it. Value is a great foundation for a diversified portfolio. But if you stick strictly to value, you’re leaving lots of growth gains on the table.

And to be fair, there is a spectrum of investing styles between these two. Few investors fall 100% into these divisions. Just as a hobbit has “some courage and some wisdom, blended in measure,” so do the most successful investors create a blended portfolio that combines the best qualities of a range of stocks.

To learn more about the different approaches to investing, and find out how to create the right portfolio for you, download your FREE copy of our report, How to Invest in Stocks: How Stocks Work, How to Calculate Return on Investment and Other Investing Basics.

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Cabot Prime Pro Week Ending March 5, 2021

From the Cabot Prime Pro Week Ending March 5, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

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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Cabot Prime Week Ending March 5, 2021

From the Cabot Prime Week Ending March 5, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

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

Cabot Turnaround Letter Weekly Update

March 5, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

Today’s note includes earnings updates, ratings changes and the podcast.
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Cabot Small-Cap Confidential Special Bulletin

March 5, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

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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Cabot Growth Investor Special Bulletin

March 5, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

Growth stocks remain under the gun, and while we’re already relatively defensive in the Model Portfolio, we’re going to do a little more trimming now
Read More

Cabot Early Opportunities Special Bulletin

March 5, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

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...
Read More

VIDEO: Focus on Capital Preservation | Cabot Weekly Review

From the issue of |by Mike Cintolo|Stock Market |

In this week's video, Mike Cintolo talks about the meltdown in growth stocks and his increasingly cautious stance.
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Cabot Top Ten Trader Movers and Shakers Weekly Update   

March 5, 2021|From Cabot Top Ten Trader|by Mike Cintolo|Growth Stocks

The iffy up-down-up-down action in leading growth names starting in late January led to some key breakdowns last week, and this week, growth stocks have been routed—the Nasdaq is down nearly 4%, but most leading names are off much more than that, with coming...
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Cabot Growth Investor Bi-weekly Update

March 4, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

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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Cabot Early Opportunities Special Bulletin

March 4, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

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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Cabot Global Stocks Explorer 730

From the Cabot Global Stocks Explorer 730 issue of Cabot Global Stocks Explorer|by Carl Delfeld|Emerging Markets

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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Cabot Small Cap Confidential 262

From the Cabot Small Cap Confidential 262 issue of Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

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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The GameStop Stock Affair, One Month Later: 3 Positive Outcomes

The GameStop Stock Affair, One Month Later: 3 Positive Outcomes

From the issue of |by Timothy Lutts|Stock Market

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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Cabot Marijuana Investor Update

March 3, 2021|From Cabot Marijuana Investor|by Timothy Lutts|Growth Stocks

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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Cabot Growth Investor Special Bulletin

March 3, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

Growth stocks continue to bleed today, with many down 4% to 10% even as money rotates into cyclical areas. Our trend-following indicators are still positive, so we’re not selling wholesale, but as growth investors, we are turning cautious—we came into this week with in...
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Cabot Dividend Investor Weekly Update

March 3, 2021|From Cabot Dividend Investor|by Tom Hutchinson|Dividend Stocks

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.
Read More

3 Self-Driving Car Stocks with Great Charts

3 Self-Driving Car Stocks with Great Charts

From the issue of |by Chris Preston|Growth Stocks

Autonomous driving is a $556 billion industry waiting to explode. But these self-driving car stocks are already taking off.
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Cabot Small-Cap Confidential Special Bulletin

March 3, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

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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Cabot Micro-Cap Insider Update

March 3, 2021|From Cabot Micro-Cap Insider|by Rich Howe|Small Cap Stocks

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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Cabot Undervalued Stocks Advisor 321

From the Cabot Undervalued Stocks Advisor 321 issue of Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

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.
Read More

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