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Monthly Archives: April 2009

How to Handle Losses in Stocks

April 16, 2009
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How to Handle Losses in Stocks

One of the reasons I love the stock market (though sometimes it’s more of a love-hate relationship) is that it’s such a battle of the mind.  Of course, few pundits or analysts will tell you that–to them, it’s all about number crunching, research, valuation and industry analysis.  And all of those are important. But when you get down to it, with money on the line, buying and selling stocks becomes emotional.  We’ve all experienced the range of emotions–not just fear and greed, but euphoria when your stock gaps up on earnings, depression when it gaps down, etc.  Moreover, there’s...

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Repair Your Portfolio with Dividends

April 15, 2009
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One of the reasons for holding falling financial stocks like BAC, WFC and UBS so long was their dividends.  And I understand–regular dividends often cushion the blow from falling prices.  But just last month, Wells Fargo chopped its quarterly dividend from 34 cents to five cents.  Bank of America’s quarterly dividend has been slashed from 64 cents to a penny.  And UBS has suspended its dividend entirely! Bottom line: you can’t even justify holding these stocks for their dividends any more! So what do you do if you want regular income?  What do you do if you’re retired and...

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On the Repeal of Mark-To-Market Accounting

April 14, 2009
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On the Repeal of Mark-To-Market Accounting

I received an email from a subscriber last week, asking, “What do you think about the banking sector after the M2M has been approved?  Should I get some like BAC, WFC, UBS? ” M2M, for the record, stands for mark-to-market, the accounting practice of valuing an institution’s assets at the price the market would pay today.  Critics of the practice say mark-to-market accounting is partly responsible for the past year’s market crash, and argue that institutions should be allowed to value their assets at prices they believe can be realized in a “rational market.”  In fact, Representative Steve Cohen,...

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The Logic of Emerging Markets

April 13, 2009
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The Logic of Emerging Markets

So, I have a stock for you, but first I want to explain what I do here at Cabot. I write the Cabot China & Emerging Markets Report.  My investment universe includes every emerging market stock that trades on a U.S. exchange as an ADR (an American Depositary Receipt).  Sticking to ADRs is a risk-control measure, since it guarantees that the companies whose stocks are listed have met the reporting requirements of the major U.S. exchanges, including those pesky Sarbanes-Oxley standards that U.S. companies complain about (but that give investors in foreign companies so much comfort). Cabot China &...

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Journalism Isn’t Dead, It’s Just Changing Shape

April 11, 2009
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A few weeks ago, I wrote an issue of Cabot Wealth Advisory about the state of the newspaper industry and it generated a lot of insightful comments from readers. I took some extra time to think about the various points that were brought up because, last weekend, I took a trip back to my alma mater, Syracuse University, for a staff reunion of my college newspaper, The Daily Orange. The weekend was billed as a chance to reconnect with former staffers and to meet and impart wisdom to the students currently at the helm of the paper. This was...

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