Latest Summary
CABOT EVENTS
Cabot Weekly Review (Video)
In this week’s video, Mike Cintolo is very encouraged with the market’s push higher, which comes after some iffy churning action in the past few weeks--and, encouragingly, pretty much all leadership (new and “old”) participated, which bodes well. Mike doesn’t see this as a fresh blastoff, of course, but he did extend his line this week in Cabot Growth Investor and could do more buying if the bulls keep it up.
Stocks Discussed: MU, NOW, ASML, PWR, EXP, LLY, NVO, NBIX, WFRD, TDW, ONON, SHAK, TOST, SQ
Cabot Street Check (Podcast)
This week on Street Check, Chris and Brad discuss the market’s response to the latest Fed meeting and the path forward for interest rates before diving into recent convertible bond offerings from high-flying tech companies like MicroStrategy (MSTR) and Super Micro Computer (SMCI) and whether that ups the risk profile of those companies. Then, they break out their “Magnificent Madness” stock bracket and pick the one mega-cap tech stock to rule them all; the results may surprise you.
Cabot Webinar
March 26, 2024 12:00 PM ET
Capitalizing on the Bull Market: 4 Experts & Their Top Picks for April 2024
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from October 18, 2023 is now available for you to listen to at your convenience—click here for access. This private call with our analysts is one of your exclusive Cabot Prime Core member benefits.
RECENT BUY AND SELL ACTIVITY
This table lists stocks bought or sold in the most recent Issues or Updates.
PORTFOLIO UPDATES THIS WEEK
Cabot Growth Investor
Bi-weekly Issue March 21: Most growth leaders and even the Nasdaq itself has been churning since early February, with a lot of ups and downs but not much price progress—but this week has been more encouraging, as the selling pressures have been unable to persist and the major uptrend may be reasserting itself (basically the opposite situation that was seen repeatedly in 2022-2023). That doesn’t mean it’ll be smooth sailing from here, so we’re still being discerning on the buy side, but we’re holding our winners and remaining in an overall optimistic stance.
In the Model Portfolio, we cut bait on one half position earlier this week that was heading in the wrong direction, but we’re holding our strong perf
Bi-weekly Update March 14: WHAT TO DO NOW: Remain bullish, but keep some dry powder on the sideline. Most of the evidence remains positive, but the choppy, churning action among some leading stocks (as well as the Nasdaq itself) is still in place. To be fair, many fresher names are acting well, but we’re content to hold some cash and our strong performers and see how things play out. After putting some money to work last week, we’ll stand pat tonight with a cash position of around 27%.
Cabot Top Ten Trader
Weekly Issue March 18: The intermediate-term trend of most major indexes and most leading stocks is still pointed up, but there’s no doubt we’re seeing much more choppy action, with most leading stocks basically marking time since early February. The good news is that, while we are seeing some sluggishness and a larger number of potholes, there are some areas of the market that are perking up—retail names started to pop three or four weeks ago, and more recently we’ve seen some commodity areas begin to flex their muscles. As we said last Friday, then, it’s not so much that there are major red flags out there, but more that the very bright green light has dimmed some as money starts to slosh around and some uncertainties (like interest rates and the Fed) pop up. We’ll again leave our Market Monitor at a level 7.
This week’s list is heavy in commodities and newer retail names, and our Top Pick looks like it’s leading what could be a group move.
Movers & Shakers March 22: It’s been an encouraging week in the market—both the S&P 500 and Nasdaq are up in the 2% range, while broader indexes and growth-heavy measures are up more.
For much of 2022 and 2023, buying pressures weren’t able to persist—yes, there were rallies, but they usually went just three to five weeks before the bulls pulled in their horns, leading to renewed downside.
Cabot Value Investor
Monthly Issue March 5: Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the March 2024 issue.
We discuss the similarities between poker and value investing. This past month we moved two stocks from Buy to Sell – Allison Transmission (ALSN) as it reached our price target, and Sensata Technologies (ST) as its management continues to take a path that is not shareholder friendly.
Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.
Weekly Update March 19: The financial media over the past weekend and in the early days of this week has been full of stories about the upcoming Fed meeting on Wednesday. It’s remarkable how much ink (or electrons) is being spilled in efforts to predict what the Fed will do, and why, along with all of the implications of this or that outcome.
Cabot Dividend Investor
Monthly Issue March 13: The rich get richer. Now, you can too.
Growing businesses with big ambitions need large amounts of money to grow and expand to the next level. But these enterprises can’t get the necessary capital from stodgy and risk-averse bankers. And they are still too small to access the capital markets by issuing stock or bonds. Thus, they are forced into the domain of wealthy individuals and institutions that have money and are itching to reap high returns.
These venture capitalists provide desperately needed money to up-and-coming businesses that can’t get it anywhere else. Thus, they are in a position to negotiate very favorable terms for themselves.
As financial markets have grown in sophistication, venture capital investing is no longer the exclusive domain of the wealthy. There is a little-known class of security that enables regular investors to mimic the very same moneymaking strategies employed by the rich and famous. These securities are called Business Development Companies (BDCs).
In this issue, I highlight one of the most successful BDCs on the market. It pays dividends every single month, has a long and consistent track of raising payouts, and has delivered fantastic total returns.
Weekly Update March 20: It’s time for all investors to obsess about the Fed again. The Central Bank has its March meeting this week and Wall Street is on pins and needles waiting to hear what they might vaguely insinuate.
Cabot Early Opportunities
Monthly Issue March 20: In the March Issue of Cabot Early Opportunities we spread things around with a diverse group of mid-caps, plus one large cap from our Watch List that’s one of the biggest stories in MedTech.
Cabot Income Advisor
Monthly Issue February 27: The Goldilocks scenario of falling inflation and a still-strong economy is unlikely to last. Interest rates will have to come down before long or the recession that the market is dismissing might be just a little further down the road. But recent higher-than-expected inflation is making lower rates less likely.
Sure, the rally could last for a while. The economy always seems to be more resilient than people expect. But the circumstances behind the rally since October are unlikely to last. This environment will change. For that reason, it doesn’t make sense to chase stocks that have been working so far this year. It’s better to position ahead of a new dynamic that is likely coming.
Change creates opportunity. There are many great income stocks that are not benefiting from this rally. Yet these stocks are selling at historically very cheap valuations with high yields. These stocks also can thrive in a slowing economy. In this issue, I highlight two stocks in particular that are cheap and high-yielding ahead of a period of likely market outperformance.
Weekly Update March 19: It’s another big Fed week in a market that has rallied for more than four months.
The S&P 500 is up 7.28% in the first two and a half months of this year and has rallied over 25% since the low of late October. Stocks have been thriving amid the likely peak in interest rates, expected Fed rate cuts this year, a still-strong economy, and the artificial intelligence (AI) catalyst in the technology sector.
Cabot Turnaround Letter
Monthly Issue March 6: Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the March 2024 issue.
In this issue we look into the bear case for the energy sector and discuss why energy stocks might provide some tonic for sober investors in an otherwise tech-intoxicated stock market. We highlight a selection of six energy stocks worthy of at least a sip.
This month’s Buy recommendation, VF Corporation (VFC), is a major apparel and footwear maker whose shares have collapsed 83% and now trade at their 2006 price. The new CEO, an unusual selection from outside the industry, is undertaking a complete overhaul of the company, with some early signs of progress.
Weekly Update March 22: Earnings season is over, so there were no companies that reported earnings this past week. However, the next earnings season is just around the corner, starting with Walgreens Boots Alliance (WBA) on March 28.
Cabot Money Club
Monthly Magazine March: Passive real estate investing is surging in popularity as it promises the wealth-building power of real estate without the headache of managing properties and tenants. This month’s issue features the pros and cons of passive real estate investing, the types of opportunities available to investors, and what you need to know before you get started.
Stock of the Month March 14: The markets saw mostly sideways action in the past month—the soothsayers are still debating when the Fed will begin reducing interest rates.
Growth stocks held on to their leadership position, although value stocks are beginning to show life in 2024.
ASK THE EXPERTS
Prime Question for Mike: Dear Mike,
I’m not sure how to handle my overwhelm at the moment and maybe you can give me some advice.
(Last year) I entered stocks (and) they would drop after popping and I would exit with a loss. It was death by 1,000 cuts, or 1,000 trades. After 2022 and 2023, I became very gun shy and only entered with small positions (1% of the portfolio) and did not size up.
Since November ’23, it has been the exact opposite: everything seems to have gone up and I’ve done well. The problem is I have too many stocks all with small positions (about 1 1/2% ), and a large cash position of about 30%.
How do you handle this kind of problem?
Should I add to the existing positions and size up or follow new stocks and enter at all-time highs with a larger position? Do I just start cutting stocks by putting in a tighter trailing stop and lose the stocks with the lowest IBD relative strength, even if they are up on my entry?
Mike: Thanks for writing. So, first, don’t beat yourself up over it – bear markets are tough (and I don’t care what anyone says, 2022-2023 was brutal for growth stuff) and even I look at many things I could have pounced on/done better in November/December/January for sure.
But onto your issue.
First, I would say when you make a trade, you want it to be because you think it’s the best thing to do – don’t just buy more of what you have just to do it.
Anyway, my overall advice is this:
Pick a risk level you’re comfortable with. To me, you don’t have to kiss all the babies, so I would advise owning fewer names. But you should have a position size and stick to it – I can’t give overly personal advice on that, but going forward, it could be something more substantial. Think of the risk involved – if you buy a 5% position and lose 20%, you’ve lost 1% of the equity of the entire account. That might be too much, too little, etc. And the stop doesn’t have to be 20% (usually less). But you have to have a comfortable level for your personality.
Go through your list of things you own and sort them from biggest profit to biggest loser. Consider pruning from the bottom of the list.
To correct the position size, do it over time – new buys should be X% (whatever you decide in #1 above) and you’ll gradually get there.
- My guess (and it’s just a guess) is that you may be trading too often to have this many stocks. There’s nothing wrong with that, if it works for you, and I don’t want to suggest a strict artificial limit (“you can only buy one stock a week”) because that’s not how the world works – but if you’re putting on 4-5 positions a week and never selling anything, that is probably going to run you ragged. Just an idea.
I know these are general ideas, and I really can’t give overly personal advice, but suffice it to say try to correct this over time with larger (but comfortable) positions. Doesn’t mean you have to have giant positions, but I do think you could do better homing in on fewer names.