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Monthly Archives: August 2011

One Advantage of Options: Less Exposure

August 30, 2011
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One Advantage of Options: Less Exposure

My first article for Cabot Wealth Advisory appeared back on December 27, 2010. As the editor of Cabot Options Trader, I intended to educate subscribers about options–perhaps dispel a few myths and point out some of the advantages of options. One of the main appeals of options is that they provide the investor with leverage. A move of 5% to 10% on the underlying stock can easily generate a gain (or loss) of 80% to 100% on an option. And options allow investors to participate in the market with a smaller cash outlay. Here is what I wrote: “Options...

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One Good Idea

August 29, 2011
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Cabot’s founder, Carlton Lutts, was known to say about reading books,  “All I’m looking for is one good idea.” We get a lot of requests asking about which investing books are best, so today I’m going to share the Cabot editors’ favorites. Recommended by Michael Cintolo, editor of Cabot Market Letter and Cabot Top Ten Weekly: Reminiscences of a Stock Operator by Edwin Lefevre If you consider yourself a student of the market, there is no better book than Reminiscences of a Stock Operator.  This conversational biography of the exploits of Jesse Livermore contains more market lessons than any...

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Will Congress Finally Kill Off Ethanol Subsidies?

August 25, 2011
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Will Congress Finally Kill Off Ethanol Subsidies?

Ethanol has been a fuel for automobiles from the start of the industry. In 1896, Henry Ford built his first car, the Quadricycle, to run on ethanol. His Model T, which revolutionized auto manufacturing when it rolled of the assembly line in 1908, was designed to run on ethanol or gasoline. Even as Ford continued to push for ethanol from corn as the logical fuel, lower priced gasoline won out. The oil shocks of the 1970s revived the idea of ethanol as an alternative fuel, and the corn-based version is now blended into 90% of the gas Americans use...

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A Beverage Stock with Emerging Markets Exposure

August 24, 2011
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Reminiscing about my dad’s lesson involving PepsiCo (PEP) made me want to do some additional research on it. Here’s what I found … PepsiCo, incorporated in 1919, is a global leader in the soft drink and snack food industries. PepsiCo’s popular brands include Pepsi, Frito-Lay and Quaker Foods (acquired in 2001). PepsiCo gets 65% of total sales from North America, while the rest come from international sales spread throughout the world. The company is beating its competition by expanding in international markets and focusing on health and wellness beverages and foods. PepsiCo management has created faster growth by reacting...

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My Stock Investing Education

August 23, 2011
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My Stock Investing Education

My education in stocks started very early. In fact, my grandmother bought me my first stock before I even came home from the hospital! Of course, I was completely unaware of this at the time, but it didn’t take long for me to develop a keen interest in the world of business and investing. It was a huge passion for my grandma that she passed along to my dad and that they passed to my brother and me. I’ll never forget her determined searches for an Investor’s Business Daily when we were traveling. She just had to get her...

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