Stock Market Video
The Stocks That Got Away: 2013 Edition
This Week's Fortune Cookie
In Case You Missed It
In this week's Stock Market Video, I sing the same song I've
been singing for weeks: market conditions are good, indicators
are positive and it's a time for putting on your bull hat and
doing some buying. There are also a few warning signs in investor
sentiment and slippage among former market leaders, but that's
not a reason to ignore the fact that the bulls are in charge
right now. I also mention a few strong stocks among the
pharmaceuticals, financials and builders that look good now.
The Stocks That Got Away: 2013 Edition
The transition from December to January can be a tough one,
especially if you live in New England. All of the 2013 holiday
good cheer is just a memory, the Christmas tree is lying on top
of the remaining 12" of dirty snow by the street and the
thermometer read 7 degrees F when I got up. Welcome to the
reality of the New Year.
Fortunately, I have my usual way of cheering myself up in
early January. I always spend a little time researching the
top-performing stocks of the previous year. The irritation I feel
from looking at all the stocks I didn't own that blew off the
charts makes me forget all about the frigid temps, slick roads
and gray skies.
If you enjoy the same kind of wallowing in stock-market regret
that I do, here's what we all missed.
#1 The top-performing stock of 2013 (drum roll) was
Canadian Solar (
, a Chinese solar company based in Canada. CSIQ soared a
staggering 777% during the year, from 3.5 on January 2 to 29.82
on December 31.
Like many stocks that make big gains in any given year, CSIQ
is a rebound story. The stock was trading at 34 when 2010 dawned,
but fell over the next two years to below 5. The stock spent all
of 2012 trading under 5 on sparse volume. And it even got a late
start on its big 2013 run, waiting until May to get above 5,
which is also when volume began to pick up.
[Note: CSIQ probably wasn't even the top-performing stock of
the year in absolute terms. But I'm not interested in the
monumental moves made by inconsequential stocks. So I screen for
stocks that trade at least 50,000 shares a day, on average, and
that finished the year trading above 10. This isn't any guarantee
of institutional quality, but it does eliminate most
and other mayflies from the pool.]
#2 The second-best performer in 2013 was
VisionChina Media (
, a Chinese advertising company that delivers ads via monitors on
mass-transit systems in 19 cities. VISN made a 680% gain during
But the chart for VISN is a bit bizarre, with almost zero
investor interest from the beginning of the year (where it opened
at 3.2) through early October. The stock was still trading at
2.45 on October 4, but blasted off to 4.5 on October 7 and rode a
wave of big-volume buying to as high as 18 later in the month.
But a sizable correction pulled the stock back to earth, and when
December dawned, VISN was flat as a pancake at 9. Then came
another rocket shot that peaked over 30 in late December, before
a selloff on December 30 that scrubbed of a full six points. VISN
finished the year at 23.8.
Just btw, VISN is continuing its volatile ways, dipping below
20 on January 8, then tacking on a couple of points on January 9.
Volatility cuts both ways.
So, what conclusions can I draw from these two stocks?
Well, first, it's good to start from a very low base. Low
prices attract a more speculative kind of investor, and
aggressive players can make for big gains. Then, when a stock
gets into the low double digits, the bigger sharks start to take
notice, which can give a hot issue a new tank of fuel.
Am I surprised that both of the top performers were stocks of
Chinese companies? Not at all. Chinese stocks have been out of
favor for Western investors for at least a couple of years, so
conditions were ripe for a shift in sentiment. In all, four of
the top ten performers for 2013 were Chinese stocks.
It's also worth noting that when I did this research last
year, I found just 12 stocks that met my price and liquidity
requirements that had topped 200% gains. This year, I had to cut
off my list at 16 stocks that had booked gains of over 400% for
As I did last year, I'll be working on a report on all 16 of
the top performers for the year. I'll be happy to send it to you
when it's finished, probably some time in the middle of next
To get the report, just email us at
email@example.com and I'll send it when its
finished. And you can join me in torturing yourself with the ones
that got away!
Here's this week's Fortune Cookie. Remember, you can always
view all previous
Fortune Cookies here
Contrary Opinion buttons here.
Up close, everything about investing is different these days,
with technology playing a huge part. But if you step back and
look at the patterns of stocks, you see the exact same patterns
that existed a century ago-and the reason is simple. Human
emotions play a huge part in investment decisions, and always
will. Today, sentiment is improving everywhere, thanks to growing
productivity and falling unemployment, and thus stocks are
rising. But when sentiment peaks, watch out!
Lots of people use this French aphorism as a cynical dismissal of
the idea that anything can ever change for the better. But I love
it for its wry take on history, just as I flinch when I hear
anyone say, "It's different this time" about anything at all. The
fundamental things apply, as time goes by, no matter what. And
the more you learn about the history of the stock market, the
more you appreciate the market's ingenuity in finding new ways to
produce the same results, over and over.
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 1/6/14 - The Year
In this issue, Cabot Stock of the Month editor Tim Lutts
disposes of his predictions for the year in a few sentences. He
also continues his new series on Disruptive Stocks with his
number two pick,
Align Technology (
Cabot Wealth Advisory 1/7/14 - Get Ready for
the Next Technology Boom
Nancy Zambell, the new editor of Investment Digest and
Dividend Digest, writes about the Internet of Things (IoT) that
will connect more and more devices. Among the companies helping
this to happen, she likes
International Business Machines (
Cabot Wealth Advisory 1/9/14 - Cabot's Newest
I use this issue to discuss Cabot Dividend Investor, Cabot's
revolutionary advisory for income investors, with its head
analyst, Chloe Lutts Jensen. Cabot Dividend Investor will launch
at the end of January, and Chloe talks about how subscribers can
customize their income portfolios to meet their individual
Have a great weekend,
Chief Analyst of Cabot China & Emerging Markets Report
and Editor of Cabot Wealth Advisory