Last week I discussed 20 investing rules for 2011. If you
missed the issue,
you can read it here
This week, I have some rules for you that were sent in by
readers. Thanks to everyone who wrote in. If you have some to
add, please send them to me by replying to this email. Enjoy!
Love your rules. I like to project the pullbacks on a stock
with a long-term growth pattern to identify entry points. I
also am not afraid to buy into those pleasing short-term pops of
that same stock, especially if it is occurring on low to moderate
volume. I know from experience that the next big volume day
for that stock seems to be demand driven. In my younger
years, I learned the hard way to watch the high fliers very
carefully. Don't get me wrong, I got hurt a little during
the collapse of the tech bubble, but nowhere near as much as
some. Greed never pays … staying on top of those profit
situations in volatile stocks is ALWAYS time well spent.
Second RULE … never rely solely on broker or analyst opinion …
ALWAYS look at the big picture.
After almost 28 years on the retail side of the business, I came
to the realization that investors should only be in investments
that pay dividends. Consequently I construct portfolios that
start with at least 80% dividend-paying investments returning at
least 4% in income per year. My overall goal is to achieve
between 5 to 7% "real" income annually.
Winter Park, Florida
Here are my rules. They are designed to correct my flaws and
therefore are a supplement to many other rules including yours.
HANS' INVESTMENT LAWS
1-Never look back.
2-You only make money when you sell.
3-Greed kills success.
4-Never rely on investor momentum or on advisors only.
Cheers and happy new year.
King City, Ontario
One of my top rules is "The chart is always right" meaning that
no matter what the speculation about the stock, or how good the
company might be, if the technical chart is giving you bad
signals, the chart is trying to tell you "no new buying here
Another one of my personal ones goes something like this: "When
buying a stock, don't settle. Only buy a stock that meets all
your criteria. There are plenty of good stocks out there
and you don't have to settle to buy one."
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With the return of cold weather and snow here in the Northeast, I
recently pulled out one of my favorite pairs of winter boots: my
trusty UGGs. I've long been a fan of the cozy winter footwear and
was intrigued when
Deckers Outdoor (
, the maker of the boots, began popping up in our Cabot
newsletters. It recently appeared in Cabot Top Ten Weekly, with
Editor Michael Cintolo writing this:
"Markets gained strength in late 2010 from the return of retail,
with several apparel and footwear companies showing signs of
solid growth. Deckers Outdoor, a California company founded in
1973, has expanded from its roots in Teva sandals and Deckers
flip-flops into a stable of global footwear brands. The most
visible brand is UGG Australia, the sheepskin-based pull-on boots
that have become a staple of young women's footgear. The company
also owns the Simple, TSUBO, Ahnu and Mozo brands, but it's the
UGGs that drive results, making up nearly 90% of 2009 revenues.
Deckers says that its corporate strategy is to take niche brands
and turn them into global successes, and it has done that with
UGGs and Teva sandals. In a strengthening retail environment,
investors are betting that the company will continue to make good
on that strategy.
"DECK split 3-for-1 in July 2010, and that marked the middle of a
nearly six-month basing period that kept the stock trading
sideways in a range between 45 and 55. The big rally began in
September, and rocketed the stock from 43 at the end of August to
87 in late December. DECK has been correcting since December 20,
and has now dropped to its 25-day moving average. It looks like
there should be support at 77, and a small buy here could pay
off. Look to average up as the stock gets back in gear, but keep
a stop at the 50-day moving average currently at 71."
You could buy DECK here and hope for the best, or you could
subscribe to Cabot Top Ten Weekly to learn Mike's latest thinking
on it and other leading stocks.
Learn more here.
In this Week's Stock Market Analysis Video, Cabot China &
Emerging Markets Editor Paul Goodwin says that it's been a good
week in the market, as investors come back from the holidays with
buying on their minds. He says that investors are optimistic,
encouraged by good retail numbers and the fact that hiring may be
picking up. Paul also discusses the recent buy signal his
newsletter received. Stocks discussed include
China Yuchai (
America Movil (
Click to watch!
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Shocking Truth about Investing in China
Our subscribers have earned profits totaling over 680% on our
recommendations in the last year! And that's just the beginning.
Cabot China & Emerging Markets Report Editor Paul Goodwin
says … "These numbers translate into cumulative profits of 100% …
200% … even 1,000%+ if you invest in the right Chinese companies
being traded on U.S. exchanges."
And the best place to discover these high-potential stocks is in
Cabot China & Emerging Markets Report!
Until next time,
Editor of Cabot Wealth Advisory