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Monthly Archives: January 2009

History of Economic Recovery

January 7, 2009
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I received this email from an anonymous reader. “You are missing the elephant in the living room. The Wall Street and markets you knew are gone. The Federal government has taken over and it will never be the same. Following the past approaches will eventually lose your following.” Well, it’s true that Washington has more influence than it used to, and I’m not a fan of the trend.  But I remain fully confident that markets will continue to function, that creative forces are alive and well in both the U.S. and around the world, and that companies both large...

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The Value of Doing Nothing

January 7, 2009
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I recently received this email from a longtime subscriber who enjoyed a long and successful career as a professional musician and band director. “In a band I played in, we came to a section in a piece where it was mine to do with what I might.  I did. “Director stopped us and asked what “that” was all about and didn’t I understand that we got paid as much for the rests as for the notes?  I guess I didn’t.  I later understood that this observation wasn’t original with him, and likely whoever did invent it must have been...

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A Bullish Long-Term Sentiment Indicator

January 6, 2009
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I know you’ve probably heard this a thousand times before, but let me personally wish you and yours a very happy New Year.  Let’s hope it’s far more prosperous than 2008. In fact, I’ll start off today’s Cabot Wealth Advisory with some data that suggests it’s likely.  Every month, the American Association of Individual Investors (AAII) polls its readers on their current portfolio’s stance–how much they have invested in stocks, how much in bonds, and how much in cash.  AAII’s been doing this since late 1987, and it has the history posted on their (subscriber-only) Web site. Looking at...

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Keep Your Eye on the Ball

January 6, 2009
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I have a friend who’s an avid tennis player, the kind of guy who routinely finishes high in his club championships and sometimes wins.  But he has always believed that with just a little advice from a top tennis coach he could be a truly great player. He got what he wanted (in a way) when he attended the 2004 U.S. Open Tennis Tournament in New York and got a great seat at one of the quarterfinal matches, in the second row behind the end line.  He realized that he was sitting two seats away from Andy Roddick’s coach...

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A Group to Watch

January 5, 2009
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There’s a group to watch this week and next.  I’m talking about education stocks, which we’ve written about regularly in many of investment advisories, including this one.  While December was a quiet time for most indexes and stocks, it allowed many groups to build basing structures–I’m talking about multi-week bases, where stock gets transferred from weak hands to strong hands–which could propel them to gains in 2009. Education stocks are no exception, with stocks like Apollo (APOL), DeVry (DV) and Strayer Education (STRA) all consolidating relatively quietly in recent weeks.  I wouldn’t say the group is strong … but...

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