The webinar was recorded April 22, 2020
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find the slides here.
Chris [00:00:04] Hello and welcome to today’s Cabot Wealth webinar, My Favorite Growth Stocks for the Coming Coronavirus Recovery.
Chris [00:00:10] I’m your host, Chris Preston, Chief Analyst of the Cabot Wealth Daily Advisory and managing editor here at Cabot Wealth Network. With me today is Tim Lutts, our CEO and Chief Investment Strategist and Chief Analyst of our Cabot Stock of the Week and Cabot Marijuana Investor advisories. Today, Tim is here to talk about what stocks he likes for what should be a historic recovery from what has been a historic collapse in stock prices over the last six weeks or two months, really. This is an interactive webinar, which means we’ll be fielding your questions after Tim wraps up his presentation. So if you have a question, feel free to ask at any time and we’ll try and get to as many of them as time allows, once Tim wraps up. Just keep in mind that we cannot offer advice in regards to your own personal investing situation or portfolio. First, let me introduce Tim. Tim has been in the investment business for 34 years, all with Cabot for 18 of those years. Tim worked side by side with his father, Carlton Lutz, who founded Cabot 50 years ago in 1970. Tim eventually took over the business when Carlton retired, transitioning the business into the digital age while remaining focused on the goal of serving subscribers with the best independent investment advice possible. Under his leadership, Cabot Advisories have been honored numerous times by Timer Digest, Hulbert Financial Digest, Dow Jones, MarketWatch and Taimyr Digest says the top investment newsletters in the industry. As I mentioned before, Tim runs two those newsletters. We call them advisories, Cabot Stock of the Week and Cabot Marijuana Investor, both of which focus primarily on stock with huge portfolio transforming profit potential. And today Tim’s going to talk about what growth sectors and growth stocks he sees emerging in the best shape from the rubble of the last couple months. So I’ll let him do just that. Tim, take it away.
Tim [00:02:01] Thank you, Chris. And welcome, everybody. Growth stocks are what I love, and that’s what I’m going to talk about today. I’m going to cover. But first, let’s look at this chart.
Tim [00:02:14] This is the average performance of the Dow after waterfall declines. Over the past 90 years, there’ve been 13 of these according to Ned Davis, who did this chart. As an average, of course, that’s not a real road map, but it’s a picture of what’s possible. The big picture the big lesson here is that a year later, after the bottom, stocks are 24 percent higher on average. This year, we’ve already come up substantially off the bottom. Almost that much because we had a steeper decline also than average. Overall, it’s a positive story and we can look forward to owning growth stocks that do even better if we pick the right ones and hold them at the right time. So what we are going to cover today are small tech growth. Medical growth. Blue chip growth. And my favorite revolutionary growth. Which also becomes at some point evolutionary growth. It’s an interesting story that we’ll get to at the end. Overall, this presentation may take 20, 25 minutes. If I talk enough. So clear for questions at the end. Just talking with tech growth. Well, the most famous stocks out there today is Zoom Video Communications.
Tim [00:03:40] Zoom is cloud-based video conferencing leader, a sector that’s boomed over the past couple months. Looking at triple digit earnings growth. Came public a year ago. So it’s still a young stock. And still a lot of potential to go. It’s not over owned at all. Estimates are good growth next year and beyond as well. Still fundamentally a good story. Technically, it’s interesting because. Couple months ago, there’s a company called Zoom Technologies, entirely different business, but as soon as Corona Virus Zoom’s story good out there. People started typing in its ticker symbol Zoom, z o o m, Zoom Technologies went from two dollars in February, it had been kind of flat for a year or so, two dollars, up to forty dollars in late March. And then people wiser said, hey, you got to stop this, so let’s stop trading and now Zoom Tech is trading as ZTNO, it’s down to 64 cents. Meanwhile, ZM, which has Zoom looks like this. It’s had a good run this year. Peaked at one sixty five couple weeks ago. Nice, productive 50 day moving average. And so that’s a healthy chart. It’s not overdone. And the fundamentals are great. The risk, of course, is that as videoconferencing may become less important to people back to work in the office, business may slow down and maybe a reaction to that. So there’s nothing guaranteed here. But it is one of the hottest textiles today. Still good potential.
Tim [00:05:25] In a similar boat, is RingCentral. A more mature company. It’s been public since 2013 and a broader business presentation as well. Cloud based unified communications for businesses. Phone, text, email, video. Great recurring revenue, so much more secure long term story than Zoom’s. We like them both.
Tim [00:05:53] Here’s a chart. Hold up big time, the first major Carona virus crash, but bounced right back because people realized that this is solid business. It’s not going to shrink just because Corona dampens business temporarily. Great solid cash flow.
Tim [00:06:13] Third and last tech growth stock is Zscaler cloud based Internet security. Great EPS growth, margins, healthy, came public just 2018, so it also is still young. This one looks like this. Very healthy. I should mention that all three of these. All three of these are in Stock of the Week. They can be relatively short term holdings for me and Cabot Top Ten, which is where they all came from originally. Which is really on top of all the hottest stocks, but they have long term potential as well.
Tim [00:07:02] Moving on to medical tech. The bullet for targeting Carona is Moderna (MRNA) an RNA based vaccine working on trial in Seattle. They have revenues, but the market cap is twelve billion, so there’s a lot of expectation built in here and no earnings in sight. So it’s a high risk, high reward possible.
Tim [00:07:36] That’s the chart. Healthy run on the 50 moving average. Definitely extended here. Definitely a potential to pull back anywhere down toward 30 and still be healthy. Potential to go even lower if the trial doesn’t work out. Potential to go even higher. The trial does work out. This could be a stock that has two hundred and a couple of weeks or it could be down a 20 in a couple of weeks. It’s really could go either way. If it breaks, you get out of it. A break might be somewhere below here. Depends on volume moves as well. What if it goes higher? You can hang on if you can stand the volatility.
Tim [00:08:18] Next stocks here, we’re going to scale up in size and scale back on volatility as we go. So the next one is also a Carona stock. Quidel, the leader in rapid point of care tests, SARs test approved, profitable for over a decade. Good revenue. Healthy market cap. We also. We know the chart. It broke out above 80 after basing at 80 for a year. You can’t see it on this chart, but this is a great technical breakout from the 80 region. And so this we’re just getting started. Could go much longer.
Tim [00:09:10] Moving higher up the quality scale and down the risk scale is Vertex, which is also in Stock of the Week. It’s not a Carona stock at all. Uterine cystic fibrosis treatments, huge market expansion. With this new Trifafta approval in the U.S. and Europe, so great EPS growth. Future very predictable growth. It broke out in October way back here after a - from 200 - base of 200 for quite a while. Retested that base here in March. And since then has been zooming straight ahead nonstop with, no selling pressure in sight. It could pull back the moving average. But. Right now, the trend is strong.
Tim [00:10:10] And finally, in the medical category, going to the highest quality, lowest risk of all. We have Gilead Sciences. A leader in antiviral drugs. Remesivir may be effective against Corona virus but even without it, it’s still a very healthy business. Margins are very high over this. No growth. Gilead has Billions of revenues peaked way back in. 2015 - so the market - so the stock has been cooling off for the past five years. It’s not hot at all for a long term perspective. The elevation is fair, but certainly not high. P E is just twelve. And just recently as this Carona came around. The stock has been perking up and interest is growing. And just last Friday, you got a big day there. So it’s rolling and it could easily climb. It pays a nice dividend, three point six percent. So that’s the low risk play to medical growth these days.
Tim [00:11:26] Moving on to blue chips. We have Nvidia. World leader in graphics processing chips. They do games, movies, machine vision and artificial intelligence. Security cameras. They are all over the place and just growing leaps and bounds, high profit margins, great growth, potential, great growth projections. Next year, the next year thereafter. And a small dividend which will grow as the company matures even more. Nvidia had a huge run in twenty fifteen to twenty eighteen multiplying 10 times. It peaked at 291. Two years ago and tried to break out from that here two years later, failed because the virus pulled it right back down. It’s a little island reversal there, tells you that Breakout is dead. Then it goes - comes back up with a recovery. And so above its moving average looks pretty healthy. But still not a clear break out yet. Once again, it has to get above the 280 ish area 290 to be really clear of history.
Tim [00:12:52] A very familiar name to everyone these days is Netflix global leader and streaming video, great recurring income. I pay them every month, as do most of you. Estimates 44 percent EPS growth this year and even similar next year. DVDs, which used to be the heart of the business, now one percent of the business. Almost gone. But not quite dead. Netflix peaked at 420 two years ago. Up to cool off, has come back. And it’s just working on a breakout, not succeeded yet, but electrifying clues here, a quick pull back down the 380 area moving average. As the market on the whole pulls back. it’ll probably come with it. But potential is there and it’s definitely a technology leader.
Tim [00:13:55] Finally, the last Blue-Chip technologists talk, best known of all, probably is Apple. It’s not a big, fast grower, but it’s a solid company. Modest dividend. To conduct my time in this business, when I started, IBM was in charge with mainframes. So they had a lock on the computer business. After that came a bunch of companies with mini computers. So transition era until a desktop arrived. Microsoft is keen on that for a while, especially with the software side of the picture. Then Apple came along, first with a desktop, their graphic user interface. And eventually with the iPhone and now the services and streaming keep evolving. Now somewhere around the road, somewhere down the corner, around the corner, there’s a successor to Apple. But I don’t see who it is yet. It could be Google or Amazon. It’s probably a smaller company we don’t appreciate yet. One an A.I., one in security, one in social media. I don’t know. But it’s fun to try to find them. Apple has not a strong stock. It came back to the market, 30 percent recovered. But it is a undervalued stock. Crista Huff likes it a lot, so she’d buy it here. And you got a nice dividend too.
Tim [00:15:41] Finally, revolutionary stocks. My favorite. Or as some people say, “That won’t work!” That’s what they always say when these stocks first come along. Netflix first came up the idea, Reed Hastings wanted to mail DVDs. People said that won’t work, Blockbuster will kill him. And yet, blockbuster today is history. Netflix has evolved. Streaming, content. Who knows what’s next? But they are a big part of the world today. Apple slowly evolved.
Tim [00:16:22] And Amazon. Started selling books way back more than 20 years ago. I was one of the first customers. I love books. I love it. buying them online. People said Barnes and Noble will kill them. Well, where are they today? Amazon’s now is everything, it’s evolved splendidly. So I have a I have a niece. Twenty two years old. Born around when Amazon was born. A little later. I told her about the early days of Amazon selling books online. She said, “Amazon started selling books? Nobody buys books.” Now we buy everything there. OK.
Tim [00:17:08] Today’s revolutionary stocks, which become a evolutionary stocks as well. I have two to talk about one is Tesla, used to be called Tesla Motors. They changed the name. The mission, which has been there pretty much unchanged since the start. Accelerate the world’s transition to sustainable energy. The first step is with the cars, electric cars, as we all know, that solar power, energy stored are a big part of the synergies of the whole picture. Company is profitable now. It’s ramping up production. Legacy manufacturers are really struggling these days, particularly as coronavirus has kind of sales in a big way everywhere. Yesterday, I read it. And even electric companies are suffering. A Chinese company called Byton, which is going to put out a Chinese SUV high quality this year and put out a US one next year for a lot of people working in California. Delayed again. Ohio company Lordstown Motors, which is going to use an old auto plant to produce electric pickup trucks, was delayed again. So while a lot of competition is suddenly falling behind Amazon. I’m sorry, Tesla is going almost full speed. The China factory is up and running again. U.S. factories are partial speed these days. Built in Berlin factory, too. And that’s all the cars after that comes up, solar powered energy, so great potential there. And earnings estimates for this year, 13 next year were impressive. The chart is interesting.
Tim [00:19:02] Tesla came public in 2010 or 11. I bought it in 2011 for Cabot Stock of the Week, it was Stock of the Month back then. But it was twenty nine bucks back then. The stock did not much during twenty twelve, but it was up slightly. 2013 and 14 it was a skyrocket. And then for six years it built a base, a wide and loose base, but definitely a base of no progress over six years. Even though the company kept getting more valuable and more established and proven themselves to people. Last year, the site broke out at this great run for 350 to 950. Corona brought it back down to 350, but now it’s bounced back into what it is, a new uptrend. After that six year base. And with these fundamental changes in industry, analysts are realizing the Tesla has really got better prospects than ever before as they change the world. And they will evolve, obviously, as they move forward.
Tim [00:20:23] One digression to Amazon, which I mentioned earlier, we owned Amazon on Cabot Market Letter, which is now called Cabot Growth, invested way back in 1998 99 into 2000. Had a profit of 1200 percent, that’s one thousand two hundred percent after less than two years. And the Internet stocks went crazy, of course, and Amazon blew up top. And we chose to sell it and take some profits there. And then, of course, the whole Internet sector came down big time. A long multi year cooling off period. If we’d held it, that would’ve worked out great. But it was a very, very long period of trough till recovered that gain from 2000. And I think in that case, the sign was fine. But these stocks that - like, Tesla, like Amazon that do this, you have to choose whether to sell here. Or just hold long term. Because you’re not going to buy it back down here. That’s almost impossible. So long term, is that often the best choice for these world changing stocks? But it’s not easy to hold that long.
Tim [00:21:40] Finally, the last revolutionary stock. Virgin Galactic. Space tourism. Transporting passengers to orbiting destinations. Providing world shrinking transcontinental flights, no earnings in sight. Competitors Jeff Bezos, Blue Origin and Elon Musk at Space X. Virgin, of course, is run by Richard Branson, who runs the Virgin Empire. English, actually. So it’s pretty rare I’d recommend English stocks. They just don’t - it’s not an economic climate conducive to creating growth stocks like the US is. But Virgin’s a real one. And they are the only publicly traded when you can invest in so. People have.The news this week that Virgin Atlantic. Asking for government help. Because, you know, an industry is imploded, Australia is bankrupt. So there’s a little fear that this might impact the stock. But so far, it doesn’t look bad. Interestingly, the stock was trading around ten dollars. Pretty flat before this chart. And then it cut a reverse merger that brought it to the New York Exchange. So once it got to New York, it got visible little little surge and then down to this little base right here, which is where Carl Delfeld recommended it in the Cabot Global Stock Explorer. I jumped on it with Cabot Stock of the Week, recommended it here. But at this day when the nine area. Had a great run. Both Karl and I saying this is the kind of place we take partial profits because it’s not going to last is a blow off top and a huge reversal day right there. But it came down on the market and it’s bounced and it’s back. One, what might be a regular - it won’t be a regular uptrend. It’ll be volatile, of course, but it is the early entrant into what’s changing the world.
Tim [00:24:01] And. I think that covers everything I have. So now to Chris.
Chris [00:24:09] Thanks, Tim. Give Tim a minute to catch his breath before he starts answering some of your questions. In the meantime, just a bit of housekeeping you see on your screen, if you like what you have heard from Tim so far today and our interest in signing up for this Cabot Stock of the Week newsletter and investing advisory in which every week Tim selects a new stock recommendation from among our other 12 investment portfolios here at Cabot. We have a special offer reserved exclusively for listeners of today’s webinar. You get the first 30 days for just one dollar. So, in essence, a free trial run to see if Cabot’s Stock of the Week is right for you. And when you subscribe, what you get is access to Tim’s full portfolio stock recommendations, which can top out as many as 20 stocks. New stock picks every week. It is Cabot Stock of the Week, after all. Regular updates, trade alerts, special bulletins. And also you get access to the Cabot Stock of the Week website and direct access e-mail access to Tim. And again, it’s just one dollar for the first 30 days only for people who are tuning in today. Now, let’s get to your questions. I see, I see there’s been a lot rolling in.
Chris [00:25:22] I’ll give Brian the first word. He has the million dollar question, Tim. He said he would like to know if you think the market will drop lower than the March 16th to twenty third dates. And if so, about what percent still lower.
Tim [00:25:42] OK, that’s a market timing question. We got a buy signal last week from our Cabot Tides intermediate term indicator. And so based on that and based on the chart I showed you earlier of the average after waterfall. I would say no. There is a chance that the indexes may, but the odds are even better that the best stocks will not. We watch on the best stocks. So I wouldn’t wait for that.
Chris [00:26:23] Let’s see. Question from Hussain. “How do we know that Tesla is undervalued? Its numbers have not been OK”. I’m not quite sure what he meant by that. But, you how do you know Tesla is undervalued, basically.
Tim [00:26:41] Undervalued probably is a narrow word used by people who are looking at traditional numbers, whereas I probably should say underappreciated long term potential. Especially considering the synergies of what it’s really trying to do with energy. So I may have misspoke if I said undervalued, but under underappreciated potential is the bigger picture.
Chris [00:27:10] OK. Let’s see here. “Would you consider”, this question from Daniel, “Would you consider Redfin RDFN to be a revolutionary stock?”
Tim [00:27:23] Well, Redfin does well at Zillow does. So there’s two of them, at least. I do think they’re making great changes to the industry, making things more efficient, serving the buyer better so that’s all good. So partially revolutionary. Yes. I haven’t I haven’t looked at it closely recently. Looking at a chart today. It hasn’t been in a Cabot publication for a while either. It was back when it was hot. Two years back. But right now, nothing to say about it. It’s action. Stock price.
Chris [00:28:06] OK, question from a different Daniel. “I’m a long term Cabot growth reader of all the stocks you just covered won’t be your personal favorite to put new money into.”
Tim [00:28:18] Oh, we hate to pick one stock. I would not pick the obvious ones like Zoom’s or Moderna. They’re just too high visible. A lot depends on your risk level as well. Do you want to keep the risk low? You go with Gilead or Apple. You want to go for the higher. You go for the younger ones like Zscaler - that’s probably the dark horse. It’s not famous. It’s got great growth potential. The whole the whole Internet security sector is ripe for huge growth and consolidation at the same time. There’s a lot of small players. There’s a lot of innovation happening. There is no real dominance yet. And hey, it’s good to contenders so Zscaler is one to look at. And hey, Virgin Atlantic with some long term money.
Chris [00:29:16] All right. Let’s see a question from Raj. Raj asks, “What do you think about the oil markets currently and how they’re influencing the stock market? Do you see any good energy plays?”
Tim [00:29:30] I have one in my stock of the week. Well, let’s say I have two. One is the electric utility, which is actually very large and solar. That’s NEE, Next Era Energy, that’s been recommended by our advisor in Cabot Dividend Investor. And then I have Marathon Petroleum and that came from Crista Huff and Cabot Undervalued. I suddenly had a huge pullback because of the oil story. I’m not an expert in oil or energy, but those are the two that I am following smart people on NEE and MPC.
Chris [00:30:12] OK, this one from Allen who’s been waiting patiently “Due to Zoom’s security breach during video calls. Do you think they’ll hurt the stock? Long term.”
Tim [00:30:26] I mentioned that earlier and I’m not I’m not a security expert in any means. So we asked the chart. The trust has no problem.
Chris [00:30:36] OK. Speaking of beaten down stocks, is - It is from Richard, “Is Boeing a stock to buy now?”
Tim [00:30:48] Well, no. Cabot analysts are recommending Boeing these days. And so I guess I would not either.
Chris [00:30:54] Yeah, I - Crista Huff, who is our undervalued or value expert, you referenced Tim, She has said stay away. So she is saying stay away.
Chris [00:31:08] Let’s see. Lots of questions here. OK. Question from Barbara, who’s also been waiting patiently. “You suggested ITHUF. Several months ago. It’s now gets twenty two cents a share. Do you still like it? Or should I sell? Although it’s down over a dollar per share.”
Tim [00:31:30] No, We sold ITHUF many - more than a few months ago. That’s one of the multi-state marijuana companies focused on the East Coast. In this case, it was contender, but it lost energy and lost traction. And it’s stepping out of the picture now. I would sell it here and bite the bullet and move on.
Chris [00:31:56] OK. Let’s see, here’s a question from Brian. “Do you use limits very often for buying low or are you focused on value and it doesn’t really matter when to buy?”.
Tim [00:32:09] I’m focused on trends above all. Mike Cintolo does a good job with limits. More shorter term stuff like Cabot Top Ten Trader focuses on. I like to catch the trends. And so now I seldom mention limits.
Chris [00:32:30] OK. Here’s another question about one stock. From. From. I’m going to butcher this name. Pranav, “What is your take on Microsoft stock?”
Tim [00:32:44] Well, not bad. Let me look at the... Looks just fine. That’s it that’s a trend, that’s a trend that’s been going up for. A decade. It’s not a fast trend, but it is a healthy, dependable trend at this point. So I would I would if you want to own that kind of stock. This is a fine time to get into it.
Chris [00:33:14] OK, let’s see here. Let’s see with another Zoom question from Helmet. Helmet, “with the virus run up in ZM, is a lot of the previously projected growth for 2021 already pulled forward by everyone using it while at home?”
Tim [00:33:38] Good question. And yes, everyone’s everyone knows the story. There’s no secret here. Which is why it’s not one of my favorite stocks. And yet trends can continue farther than unexpected. Absolutely. Which is why I love trends. They can prove people - You can’t pick the top until later. And so this trend is intact. And Zoom ideally has some smart people managing the company to say this is what we should do now that we’re so visible and so needed a mission, expand and give people what they need. Whatever it is to become the next apple maybe, or whatever. So now it’s not too late.
Chris [00:34:24] OK. Let’s see here. Question from Arthur, who asks, “What do you think of gold silver? WPM and SBSW?” This is generally the gold silver question.
Tim [00:34:42] Yeah, I don’t normally think about gold, but in Cabot Top Ten Trader recently, Barrick Gold has been mentioned, recommended that GOLD. It’s the biggest it’s one of the most dependable. They get royalty streams and the chart is strong. Great volume action of the past couple weeks. So then if you want to play gold, that’s the one I would jump on for the trend.
Chris [00:35:13] OK. And. Another question from Hussain. “What do you think? Or do you have any thoughts on E gaming? And if so, what companies lead the pack?”
Tim [00:35:28] There was a stock called SE. That’s the symbol SE. The name is Sea Limited S-E-A. It’s an Asian e-commerce in gaming. Company, it’s big. It’s not US. US people don’t know it, but it’s been recommended by a couple of our analysts and it’s strong. Here she looks great. So I would go - that’s both gaming and e-commerce.
Chris [00:36:01] Right. Here. Question from Stephen. Any thoughts on Visa and MasterCard?
Tim [00:36:14] Well, they’re. Let me just. I think in general, good thoughts about both of them as stocks. Let me just look at the longer term picture here. Yeah, they’re duopoly. Money comes in. They keep more of it than they give out. And I think Visa’s had a nice back over the past this year, that provides a decent entry point. Probably the best entry point in a few years. So if that’s your kind of stock. Yes, I like them.
Chris [00:36:56] OK. Here’s a question you don’t get much. But it’s an important one for people who are sort of new to Cabot. Jason asks, “I’m a new Cabot newsletter reader. And returning to - to trading stocks. I’m forty one with limited capital. Which of your newsletter subscriptions would you recommend me signing up monthly for to build my young portfolio? “
Tim [00:37:27] That’s a tough question, because part of the answer depends on your style. If you’re young, you’re 41, you can aim for growth unless it scares you. But in that case, if you can tolerate growth, I recommend Cabot Growth Investor. That’s really the core product of Cabot - that’s the original. That’s our most popular. Mike does a great job teaching new and experienced investors how to build a nice portfolio. If you’re not so growth oriented, then the choice. Is more Cabot Undervalued or Cabot Dividend Investor? But at your age, I would go with Cabot Growth Investor.
Chris [00:38:14] OK, question from Alexandra asking Tim about your. in the wheelhouse of your other advisory. What about cannabis stocks? What were your thoughts on them right now?
Tim [00:38:27] Cannabis stocks peaked in early, twenty eighteen bottomed with everything else last month, down 87 percent, which is huge, just like the just like the Internet stocks did in 2000, 2001 and 2. And the nice thing is that as as they bounce, you can see who survived and who hasn’t. And there are a couple that have not survived. ITHUF mentioned earlier is one of them. But the ones that have survived are looking more solid. In Canada you got Canopy CGC, Aphria APHA, Cronos CRON. Those are my favorites in the US. I like Curaleaf. I like Cresco. I’d like to Trulieve. Green growth brands. So there’s. And then the bottom is passed, definitely. I have an issue coming out next week and I hope to be doing some new buying if the charts shape up nicely.
Chris [00:39:39] OK. Another question from Daniel ,"TREX ticker symbol is a leader in its niche with no clear rival or competition. Would that be considered revolutionary? Its chart was doing well prior to the Corona virus.”
Tim [00:39:57] And it still is long term. You’ve got to shake out here based based on the whole global slowdown, but it’s come back. So it seems back on track. And I if I owned it, I would hold it. Definitely. I didn’t own it, I would, yeah. Seems like a decent entry point here. Revolutionary. Yes. But so far, more of a one trick pony. I don’t see it branching out beyond construction. Still, it’s a decent, well-run company and a good chart.
Chris [00:40:38] OK. Here’s more of a philosophical question from Brian. “Since strong companies sometimes have failing stocks, is participating in stock ultimately a psychological endeavor of trying to figure out what people are going to value in the future? It feels like I’m trying to figure out more of what people are going to think is worth having rather than actually what is worth having.”
Tim [00:41:01] That’s very good. Well, yes. Investing ideally combines fundamental analysis and technical analysis and psychology. And ultimately experience. That’s the fourth one that just takes time to acquire. We talked about earlier, Zoom. Everyone knows the Zoom story today. The chart looks good. People are assuming they’re going to earn a ton of money in the months and probably quarters ahead. Based on all the new use. And so to some extent, that’s started had been discounted. We know they’re going to earn that money in the stock has already accounted for that. And yet beyond that, who knows? No one knows. So you’re betting on management? Or the continuation of this shutdown or. Some other factor that we can’t anticipate. So in the end the chart knows all is what we often say. The chart consists of what everyone thinks it reflects the actions of everyone who cares about that stock. And so right now, Zoom’s stock looks good because the consensus. Consensus is positive. Hope that helps to answer it.
Chris [00:42:28] Good answer. Another question. All right. I think with time for a few more questions. Question from Arthur that I think we touched on one or two of these earlier, but he asks, “During this environment, what industries would you stay away from?”
Tim [00:42:48] Ones that are that have bad charts, above all. That’s pretty much it. If a chart says it’s positive, I’ll look at it. I don’t really have a fundamental bias. Like I said, I don’t normally look at gold. All right now gold is strong. Don’t normally look at airlines. Airlines look terrible now. I don’t normally look at oil. And oil has some good cheap values. Now that it’s really down here and and and the problem is so widely known as well. So the bad news is all discounted in the oil sector. Hope that helps answer that question. You got more?
Chris [00:43:37] Yeah, let’s see here. A question from Florence. Just generally, what do you think about Facebook?
Tim [00:43:50] No Cabot analyst has touched it recently, so I don’t have anything particularly. I was thinking early today, though, that it was just a year two years ago that the whole social media story was high profile everywhere. Traditional media. And they were saying, what’s your problem? General, we’re seeing a pricey problem, security problem, etc., social problem, and that is past. And that’s what happens. Discussions pass and new discussions come along. It’s out of the limelight now. I’m looking at a chart, Facebook’s chart has flattened. Over the past two years. It’s not good or bad. I would say it’s probably becoming a better value over this time as the company gets more valuable. And the stock stays relatively flat and. No Cabot analyst right now thinks it’s worth writing about, but overall, I can’t say anything bad about it. OK.
Chris [00:45:00] OK. Well, thanks, everyone, for all the great questions today. And a really good turnout. So thanks for. Taking the time to join us. Thank you, Tim.
Tim [00:45:14] Thank you, Chris.
Chris [00:45:14] We will be back next month with another free webinar on Tuesday, May 19th, at 2 p.m. Eastern, just like today, this time featuring Nancy Zambell, who’s Chief Analyst of our Wall Street’s Best Investments advisory. Nancy’ll be telling you how to rebalance your portfolio in the wake of Carona virus. And will throw in a couple of stock picks of her own so mark that on your calendar. And if you want to sign up for any of our Cabot advisories, Stock of the Week, Marijuana Investor or any any of the ones we mentioned or not mentioned, you go to Cabotwealth.com, and there is a tab under premium services called advisories. You pull that down and that’s where all of our newsletters, advisories, whatever you call them, are listed. So if that’s something that interests you, you can go there. That does it for us. For Tim Lutts and the entire Cabot Wealth Network team. I’m Chris Preston. We’ll see you next time.