In this week’s Stock Market Analysis Video, Cabot China & Emerging Markets Editor Paul Goodwin says it’s been another good week, but not a decisive week, in the stock market. The market opened well on Friday when good news in the form of diminishing new claims for unemployment showed up. Paul discussed the cloud computing industry and these stocks: Acme Packet (APKT), Aruba Networks (ARUN), Netflix (NFLX), Sohu.com (SOHU) and China New Borun (BORN). Watch the video.
There’s a fairly young Chinese company (incorporated in 2000) that’s doing quite well producing and distributing corn-based alcohol in the People’s Republic. The company is China New Borun (BORN), and most of its alcohol heads straight into baijiu (the name means “white liquor”) the Chinese equivalent of vodka, which is available in strengths from about 80 to 120 proof. New Borun also gets revenue from the byproducts of the distillation process, including the grains left over and even the carbon dioxide that results. The company’s quarterly results have been growing strongly, with four quarters of both revenues and earnings...
The big fear for people investing in growth stocks is that a stock can just blow up. We call this “falling out of bed,” or “falling off the end of the dock” or a couple of other very colorful phrases that I can’t really write here. This kind of huge correction usually occurs during earnings season after a company has disappointed investors with its earnings, its revenues or its forecast for future growth. But sometimes a stock can get kicked in the head by an adverse report from an analyst. That just happened to one stock I’ve been recommending...
Moving on the market, I recently wrote a piece titled “An Important Message About Fear and Greed.” In it I explained how markets peaked at the point of maximum optimism and bottomed at the point of maximum pessimism. I wrote, “the best way to invest is to Buy at the point of peak pessimism, and Sell at the point of peak optimism.” And I explained that the present was a point of very great pessimism, and therefore a very good time to buy! Finally, to counter the protests of those who would argue that today’s special fundamental troubles override...
One of the most common shortcomings I see among investors is the inability to (a) pick a system that fits their investing personality, and (b) to stick to that system, even after a few less-than-stellar months. Both are actually closely related. The first of those is pretty easy to understand—if the system an investor chooses to implement regularly results in, say, huge drawdowns from time to time, yet that investor has trouble keeping his wits about him after a bad day or two, he simply won’t be able to stick to that system over time. The same goes for...
