It’s Time be to an Optimist

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This Tuesday, October 12, marks the 40th anniversary of Cabot Market Letter, our flagship publication. Today, we work in a beautiful, old library in Salem, Massachusetts, but Cabot had humble beginnings at a farm down the road that gave the company its name.

Carlton Lutts, a trained engineer with a love for investing, started writing Cabot Market Letter in 1970. At first, the venture was part-time, but eventually, the newsletter brought in enough money that Carlton could work on it full time and Cabot was born.


The stocks Carlton recommended in that first issue were Crown Cork & Seal, Maytag, Cabot Corp., Ford Motor of Canada, Mattel, Kaufman & Broad, Adams-Mills and Beech Aircraft. Timothy Lutts, Carlton's son who now heads Cabot, and his four siblings helped with production, doing tasks like typing addresses on envelopes, folding, stuffing and mailing. In the early days Tim, (along with other neighborhood children) were paid in ice cream sundaes.

(Pictured here is the typewriter that Carlton used to produce the first issue of Cabot Market Letter. He was inspired by the two quotes tacked to it. They read: "You can be a winner, if you try." And, "No venture can succeed so long as it remains in your mind. Launch out!-Anon)

Tim eventually took over editing Cabot Market Letter, but passed the reins on to Michael Cintolo a few years ago to focus more on the business aspects of Cabot (he still does a lot of writing though, you've likely seen it here many times). Mike came to Cabot right after his college graduation more than a decade ago after first reading the Market Letter when his dad subscribed during Mike's high school years.

Last year, I interviewed both Tim and Mike, who still heads up the Letter, and when asked the most important lessons Carlton taught them, they both responded that it was his focus on optimism. Mike had this to say:

"Carlton really taught me the value of optimism-we used to joke that his favorite phrase was "Frequently Wrong ... Never in Doubt!" But seriously, his optimism was really a confidence in the future, of our country, of our company, and of the stock market. So I would say the biggest lesson he taught me was simply the value of staying positive and realizing that no matter how bad things may seem, there are brighter days ahead."

In fact, the first issue of Cabot Market Letter (pictured here) was titled "It's Time to be an Optimist." And it's a theme that continues at Cabot today. When asked recently how he feels about Cabot's 40th anniversary, Tim responded by saying: "It feels good, but it's not an endpoint. It's just a waypoint on our journey."

In that journey, Cabot Market Letter has used its proprietary market timing indicators and growth stock selection criteria to pick winning stocks. In just the past decade, our subscribers have made big profits in Amazon, Apple, Crocs, eResearch, Expedia, First Solar, Google, Green Mountain Coffee Roasters, International Game Technology, Qualcomm, Taser and XM Satellite Radio and more.

Currently, subscribers have nabbed profits of over 200% in Baidu ( BIDU ) , which Mike has said is likely the #1 stock of the bull market. Baidu, first recommended by Cabot Market Letter in July 2009, is China's leading Internet search engine. And after Google's scuffle with the Chinese government this year, the company has seen its market share-and stock-explode higher.

Mike recently had this to say about the stock:

"After four months of consolidation, Baidu broke out decisively a couple of weeks ago and soared nearly 20 points in less than two weeks. But near the end of that advance, the stock gapped up three days in a row; such action is almost always a sign that a short-term reversal is coming. (The only real exception is when those gaps occur following earnings reports.) Sure enough, BIDU gave up about half of those gains in the days that followed. But we think the stock's uptrend and the fi rm's growth are intact--impressively, estimates call for revenue growth to continue to accelerate in the third and fourth quarters. A drop all the way back down to the mid-80s would look abnormal, but right here, BIDU looks like a solid buy as long as you can hold through expected choppiness in the days ahead."

To learn more about Baidu and other top stocks featured in Cabot Market Letter, click here . Don't forget that our special 40th anniversary offer expires tomorrow, October 10, at midnight. Subscribe now and get one year free!

Until next time,

Elyse Andrews

Editor of Cabot Wealth Advisory



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: BIDU

Cabot Heritage Corporation

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