This Week's Stock Market Video
The Holiday Season, Black Friday and AAPL's Chances
Proper Prior Preparation Prevents Poor Performance
In Case You Missed It
---
It's obviously a tumultuous market environment, so in this
week's video Mike Cintolo takes a few extra minutes to detail his
current stance and to offer advice depending on your portfolio's
current cash level. He also offers guidance on shorting (if
that's your cup of tea) and on building your watch list, looking
for "early-stage stocks." Names mentioned include:
Salesforce.com (
CRM
), Oasis Petroleum (
OAS
), Financials Sector SPDR (
XLF
), Alaska Airlines (
ALK
)
and
Qihoo 360 (
QIHU
)
. Click below to watch the video!
The Holiday Season, Black Friday and AAPL's
Chances
The markets are doing a fine job of encouraging investors to
contemplate less hazardous pastimes … like bungee jumping without
elastic cords, for instance, or removing your own appendix. (The
final instruction in the Acme Home Appendix Removal Kit is
"Suture self.") At least in bungee jumping (the kind with the
cords), you have a reasonable expectation that your free fall
will be arrested before you splat into the ground.
But today, with Thanksgiving just six days away, I want to say
a brief word about "The Holiday Season," in general and "Black
Friday" in particular.
The Holiday Season is shorthand for the period from
Thanksgiving to New Years Day. This year, that will be 41 days,
which is as long as it can ever be, given that Thanksgiving will
be celebrated at its earliest possible date this year.
It used to be that grumpy social observers would decry the
steady creep of the Christmas shopping season to earlier in the
year. But once Christmas advertising galloped past Thanksgiving,
the only check on its spread into October was Halloween, and that
bastion was overrun years ago. Now, the only check on the
proliferation of commercials with sleigh bells and holly into
September is the sense of shame of marketing managers, and we all
know that marketing people get their anti-shame inoculations
every September.
Fortunately, I'm not a grumpy social observer, so you're
spared that annoyance.
For genuine cynics, Thanksgiving, Christmas and New Year's
look like shorthand for (respectively) gluttony, greed and
drunkenness. But I won't go there either.
As a stock investor, the Holiday Season looks like a giant
reality check on the mood of consumers. Healthy holiday sales can
make a huge difference in the lives of retailers, and the stock
market will pay very close attention to shopping numbers, both as
they come in week-by-week and as they show up in Q4 and year-end
reports.
Black Friday, a term coined in the early 1950s to refer to the
wave of absenteeism from American factories on the day after
Thanksgiving, has now come to mean the biggest shopping day of
the year. That's a change from the old pattern in which sales
would gradually increase as December wore on, with the peak
shopping coming on the day before Christmas, when desperate and
clueless husbands and fathers would descend on stores in a panic
and decide that expensive was better than cheap if you didn't
really know what the woman in your life might want.
I respect the Holiday Season for its economic impact. But I
love it for other reasons, which I will lay out in future
issues.
Today, I want to end with a prediction. Apple (AAPL) was
trading right at 700 in September, but fell out of favor with
institutional investors after a so-so (for Apple) earnings
report. So on Friday, the stock was in exactly the same position
as a bungee jumper, poised above 500 with its price in free fall
and not sure if its bungee cords were actually hooked to
anything.
My prediction is that AAPL-which has fallen so low that it was
just featured in the November issue of Cabot Ben Graham Value
Letter, which admired its projected earnings growth (22% per year
for the next five years), forward P/E ratio (11.1) and newly
instituted dividend-will come roaring back quickly.
This isn't an investment recommendation; Cabot growth
disciplines don't have any place for hunches. But the market is
known for overreacting, and AAPL below 500 makes no more sense to
me than AAPL above 700.
So don't buy AAPL on my account. But put it on a Post-It that
Paul Goodwin says that AAPL will rise again. We can check on how
well my prognosticator works as the Holiday Season
progresses.
---
Here's this week's Contrary Opinion Button. Remember, you can
always view all of the buttons by
clicking here.
Proper Prior Preparation Prevents Poor Performance
Tim's comment: It has the same number of "Ps" as "Peter Piper
picked a peck of pickled peppers," as well as no words that don't
start with "P." And it touts the value of preparation. Can't
argue with that.
Paul's comment: I think Tim nailed this one. All I can add is
that my favorite version of this saying is in the form of a
smart-alecky addition to "Practice makes perfect." To that, a
Vince Lombardi would have added "… if practice is perfect."
---
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 11/12/12 - The Ten Best
Dividend Paying Companies
Cabot Ben Graham Value Letter editor Roy Ward talks about the
importance of dividends for value investors and offers a new list
of the
ten best dividend-paying companies.
Stocks discussed:
Accenture Plc. (ACN)
and
CVS Caremark (CVS).
Cabot Wealth Advisory 11/13/12 - Get-Rich
Stocks and Stay-Rich Stocks
Tim Lutts, Cabot's fearless leader and editor of
Cabot Stock of the Month
, writes about the stocks that let rich people hold onto their
money and the stocks that those of us who would like to be rich
can use to get their. Tim offers a special report detailing five
stocks with huge potential.
You can get it by using this link.
He also discusses
International Business Machines (IBM)
, a stay-rich stock.
Cabot Wealth Advisory 11/15/12 - How is
Skee-Ball Like Investing?
This issue features a repeat engagement with Chloe Lutts'
essay on the parallel between risk and return in Skee-Ball and
investing. And I point out that market timing is the biggest
risk-control tactic of all. Stock discussed:
Deutsche Bank (DB)
.
Have a great weekend,
Paul Goodwin
Editor of
Cabot Wealth Advisory
and
Cabot China & Emerging Markets Report
---
Sign Up Free for the Cabot Wealth Advisory
Here!