web analytics

Monthly Archives: July 2008

“Bull Market Stocks” Perk Up

July 31, 2008
By
“Bull Market Stocks” Perk Up

While they don’t offer anything revolutionary, I’ve always been interested in what we at Cabot call “bull market stocks”–those companies whose businesses are directly tied to the fortunes of Wall Street.  Thus, in a bull market, their sales and earnings are almost guaranteed to grow dramatically … in a bull market, that is.  Examples include brokers, trading firms, mutual fund managers and the like. Well, lately, I’ve seen some snazzy action from many of these stocks.  I wouldn’t say they’re off to the races, but a look at the charts below show some solid launching pads being built. Blackrock...

Read more »

Conviction or Stubbornness?

July 30, 2008
By

We admire people with the courage of their convictions, those who know their own minds and don’t waver.  We think of the stick-to-it spirit as a sign of character, and it’s a good thing to be called tenacious, persistent, tough, steady or steadfast. A good thing, that is, if you’re not a growth stock investor. The rules say that growth investors should stick with a winning stock for as long as it continues to rise.  The problem arises when a stock starts to lose value but the investor has faith in the stock and demonstrates that conviction by holding...

Read more »

Bottom Fishing with Financials

July 29, 2008
By
Bottom Fishing with Financials

With the financial stocks shrugging off a huge share offering from Merrill Lynch today, I wanted to touch on the group. Should you buy? Sell? Short? I have no official recommendation—all I can say is that the sector remains in a downtrend by our measures. But I will also point out that the best financial stocks have likely put in a meaningful bottom. How can you tell which are the best? Just ask the market! Bank of America (BAC), for instance, has exploded off its mid-July lows on humongous volume. Notice how the stock surged above its 50-day moving...

Read more »

How Are Home Prices Affecting You?

July 29, 2008
By

Housing prices dropped by the biggest rate ever in May, down 15.8% compared with a year ago, according to Standard & Poor’s/Case-Shiller 20-city index. The 10-city index dropped 16.9%, the steepest decline in its 21-year history. Nine cities posted records lows in May–Las Vegas, Miami, Phoenix, Los Angeles, San Diego, San Francisco, Seattle, Wash., Portland, Ore., and Washington, D.C., and the value of housing in Detroit is now lower than it was in 2000. Seven metros showed smaller annual declines–Tampa, Fla., Boston, Detroit, Minneapolis, New York, Dallas and Atlanta–a possible bright spot in the data. The city with the...

Read more »

Two Ways to Play It

July 28, 2008
By

When everyone thinks alike, the market has a way of proving them wrong.  After all investors have bought, the sellers eventually take control.  After you’re #1, there’s only one way to go.  That’s one reason the dollar, which you might view as a proxy for the value of the U.S., is down.  It was previously perceived to be the most powerful currency on earth; in recent years its reputation has been in decline. But I’m firmly convinced the long-term trend of the U.S. economy–and thus the U.S. stock market–is still up, and that the market will reflect that by...

Read more »