Stock Market Video
Forecasting the Future of the Stock Market
Avoid the Tyranny of Inflated Expectations
In Case You Missed It
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In this week's Stock Market Video, Mike Cintolo reviews three
different "blast-off" indicators that have recently triggered,
which bodes well for continued gains in the months ahead. He also
reviews a wide swath of potential buys, some on pullbacks, some on
earnings gaps and some on breakouts. Stocks mentioned include:
Pioneer Natural Resources (
PXD
), Cree Inc. (
CREE
), LinkedIn (
LNKD
), Oasis Petroleum (
OAS
)
and
Ford Motor (
F
)
. Click below to watch the video!
Forecasting the Future of the Stock Market
You have to admit that stock markets are riding a nice set of
economic waves these days. The economy of China is solidifying its
recovery. The U.S. economy has been strengthening very slowly, but
very steadily. And even Europe is showing signs of getting back on
the growth track, with Germany's IFO Index of business confidence
at its highest levels in seven months and the DAX stock exchange is
at a five-year high.
I say "you have to admit" with a bit of rueful smile, because I
know there are lots of people who are dead set against admitting
anything positive at all. There are people who are so focused on
the U.S. deficits or the social policies of Europe or the Communism
of China that they absolutely refuse to see any blue in the sky at
all.
(I have no illusions that my rational optimism is the absolute,
carved-in-granite truth. There's plenty of room for intelligent
dissent. If you want to listen to two very smart people with very
different opinions about the future of China, you can c
lick on this link
to a PBS program.
My point today is that you don't really have to be optimistic
about the future to take advantage of the strength of today's stock
markets. That's because optimism (or pessimism) is about your
attitude toward the future.
And the future of the market is as much a closed book to me as
it is to the high-powered economists and market gurus who are so
eager to deliver their opinions on every website and cable
channel.
All you need to know is that markets are in an uptrend right
now. And you know this because the major indexes are all above
their trailing 25- and 50-day moving averages and those averages
are all trending up.
So, while you can worry all you want about the future and argue
with the prognosticators and crystal ball gazers who don't agree
with your pessimism (or your optimism), but you absolutely
cannot-repeat, cannot-argue that this isn't a bull market. It just
is. Period.
And just as you can't play ice hockey without ice, and you can't
play basketball without a ball, you can't invest in a bull market
unless the market is going up. And it is.
So every day that you spend worrying about what might happen,
you're losing the enormous opportunity presented by what's actually
happening.
Cabot growth disciplines don't recommend diving right into the
deep end of the pool all at once. We typically put a small amount
of money to work and then increase our exposure as our investments
increase in profitability.
And when the correction that so many people keep obsessing about
finally arrives, we will take our profits, go back to a heavy cash
position and wait patiently for the next bull market to arrive.
But we certainly won't waste this one.
If you'd like some well-written assistance from experienced
advisors, you can, of course, subscribe to Cabot Market Letter or
one of Cabot's other growth letters.
The sun is shining. Make hay.
---
Here's this week's Contrary Opinion Button. Remember, you can
always view all of the buttons by
clicking here.
Avoid the Tyranny of Inflated Expectations
Tim's Comment:
It's OK to dream; just don't expect your dreams to always come
true. If you start with realistic, reasonable expectations, chances
are good you will achieve your goals. If you let your wildest
dreams dictate your actions, you'll be forced into unwise actions.
Chasing rainbows brings only disappointment.
Paul's Comment:
There are two loaded words here, "tyranny" and "inflated." My
reading of this button is that it's warning against having goals
that are so unreasonable that they make you make bad decisions.
Ambition and goals are fine things, but if they're "inflated," they
can turn into tyrants. So the button could actually read: "Set
reasonable goals," but that wouldn't be as dramatic.
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In case you didn't get a chance to read all the issues of
Cabot Wealth Advisory
this week and want to catch up on any investing and stock tips you
might have missed, there are links below to each issue.
Cabot Wealth Advisory 1/21/13-Apple: Buy, Hold or
Sell?
Editor Tim Lutts of
Cabot Stock of the Month
uses this issue to examine the odds that Apple (AAPL) is going the
way of past market leaders. He advises looking for the next leader,
not buying the old one. The fifth of his "10 Stocks to Hold
Forever" is
F5 Networks (FFIV).
Cabot Wealth Advisory 1/22/13-Portfolio
Optimization
Robin Carpenter of
Cabot ETF Investing System
writes about the arcane art of portfolio optimization and explains
a slightly simplified way to achieve it. His explanation gives
further insight into his approach to risk control.
Cabot Wealth Advisory 1/24/13 - Two Dividend
Aristocrats for 2013
In this issue, value expert Roy Ward of
Cabot Benjamin Graham Value Letter
extols dividends as a way to validate the health of a company; a
long history of good dividends a healthy enterprise. Stocks
discussed:
Dover Corp. (DOV)
and
Family Dollar Stores (FDO).
All the best,
Paul Goodwin
Editor of
Cabot China & Emerging Markets Report
and
Cabot Wealth Advisory