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Monthly Archives: November 2009

The “Home Run” Sector of the Coming Decade

November 19, 2009
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The “Home Run” Sector of the Coming Decade

Looking back at each of the past four decades, there was one sector that would have been the “home run” sector to be invested in. Other areas provided good returns to be sure, but these were the most profitable: 1970s: Gold, up 1,250%. The price of gold was fixed until 1971. Once it was left to float, it proceeded to run from around $50 an ounce to $681 just after the start of 1980 as inflation reared its ugly head. 1980s: Nikkei Index, up 1,000%. The decade of the Japanese market turned out to be largely a bubble, but...

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Electricity from the Ocean

November 18, 2009
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Electricity from the Ocean

One of the stocks recommended in the latest issue of Cabot Green Investor (which just came out last week) is in the business of developing technology that generates electricity from the movement of ocean waves, one of the most plentiful sources of energy on the planet. The difficulties involve the fact that the environment is challenging.  The positives involve the fact that the majority of people on the planet live close to oceans, so transporting the electricity would not be difficult. In his report, editor Brendan Coffey writes, “Harnessing the power of the ocean sits as one of the...

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The Future of the Auto and Oil Industries

November 17, 2009
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The Future of the Auto and Oil Industries

I was talking with my 17-year-old son recently, and he mentioned that Google (GOOG) must be one of the largest companies in the world.  His reasoning, of course, stemmed from the fact that Google has all the answers on the Internet, and is now making a big splash in cell phones, too … and to teenagers, the Internet and cell phones are the center of the world. So I pointed out that many people never use the Internet or cell phones, and I mentioned, off the top of my head, a number of mass-market companies that had been around...

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LEDs: An Idea Whose Time has Come?

November 16, 2009
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LEDs: An Idea Whose Time has Come?

As it turns out, the Two-Second Indicator has been vindicated, at least for now, as the sharp retreat in the market was reversed during the past few days. All the major indexes are back above their 50-day moving averages, and thus, the Cabot Tides have rejoined the Two-Second Indicator in bullish territory. With that said, I am not a raging bull right this second. Far fewer stocks are looking good today compared to just a couple of weeks ago-a minor divergence that, while not totally unexpected (leadership narrows as bull markets progress), does tell you that buying power is...

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Stick with the Evidence; Ignore the Logic

November 13, 2009
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Stick with the Evidence; Ignore the Logic

It’s not often I get a question that actually leads me into two good lessons, but I got one last week that did just that.  The specific answer to the question isn’t the major takeaway–but I want to use it as an example of why, in the stock market, you should go with evidence, instead of so-called “logic.” Before we get started, let me briefly explain our Two-Second Indicator, which is one of the key market timing indicators I use in Cabot Market Letter.  The indicator measures the broad market by taking one simple reading per day (so simple...

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