Issues
Clean energy is the future. But not for a while.
This country and the world still rely heavily on fossil fuels for more than 80% of energy needs, and these conventional energy sources will likely remain dominant for decades. Meanwhile, many stocks of companies that benefit have strong earnings and great value.
Fossil fuel proportions are expected to move toward natural gas in the years ahead. A recent study estimates that global natural gas demand will soar 34% between 2022 and 2050 with the strongest growth in the natural gas realm to be liquid natural gas (LNG), with demand expected to more than double in the same time frame.
In this issue, I highlight one of the best natural gas companies on the market. It is a newly formed company in the business of exporting abundant and cheap American natural gas overseas. It’s big business. In a short time, this company has become one of the world’s largest natural gas exporters.
This country and the world still rely heavily on fossil fuels for more than 80% of energy needs, and these conventional energy sources will likely remain dominant for decades. Meanwhile, many stocks of companies that benefit have strong earnings and great value.
Fossil fuel proportions are expected to move toward natural gas in the years ahead. A recent study estimates that global natural gas demand will soar 34% between 2022 and 2050 with the strongest growth in the natural gas realm to be liquid natural gas (LNG), with demand expected to more than double in the same time frame.
In this issue, I highlight one of the best natural gas companies on the market. It is a newly formed company in the business of exporting abundant and cheap American natural gas overseas. It’s big business. In a short time, this company has become one of the world’s largest natural gas exporters.
The market has been terrific. And it will probably finish the year higher than it is now. But there is reason for caution.
Because of sticky inflation, interest rates remain near the highest levels in 20 years and may continue to stay high or go higher, until they drive the economy down. A hugely contentious presidential election is about to take place. And there are two significant global wars going on.
Steep selloffs are common even in markets that rise over time. The S&P 500 doubled over the last five years. But it crashed 30% in record time at the onset of the pandemic in 2020. There was also a bear market in 2022 during which the S&P fell over 20% and the Nasdaq plunged well over 30%. Of course, most stocks were down a lot more than the indexes. If you targeted some of the very best stocks at fire sale prices you could have gotten amazing returns.
In this issue, I highlight a way to target the purchase of the very best stocks at fire sale prices amid market turmoil that may occur from the potentially market-roiling issues this year or next. Most investors don’t buy when the market is crashing because it’s natural not to want to try and catch a falling knife. But there’s a way to take emotion out of the equation and calmly plot a way to fantastic returns.
Because of sticky inflation, interest rates remain near the highest levels in 20 years and may continue to stay high or go higher, until they drive the economy down. A hugely contentious presidential election is about to take place. And there are two significant global wars going on.
Steep selloffs are common even in markets that rise over time. The S&P 500 doubled over the last five years. But it crashed 30% in record time at the onset of the pandemic in 2020. There was also a bear market in 2022 during which the S&P fell over 20% and the Nasdaq plunged well over 30%. Of course, most stocks were down a lot more than the indexes. If you targeted some of the very best stocks at fire sale prices you could have gotten amazing returns.
In this issue, I highlight a way to target the purchase of the very best stocks at fire sale prices amid market turmoil that may occur from the potentially market-roiling issues this year or next. Most investors don’t buy when the market is crashing because it’s natural not to want to try and catch a falling knife. But there’s a way to take emotion out of the equation and calmly plot a way to fantastic returns.
The market has rallied for more than a year in the happy space between inflation and recession. But that dynamic is unlikely to persist. Amid persistent inflation, it is likely that the market will have to contend with high interest rates or a faltering economy. Each one is problematic.
In a flatter or faltering market, dividends provide a bigger part of total returns. Let’s get ahead of the curve and get a big fat yield.
In this issue, I highlight a stock with a massive dividend yield that has shown good price stability for several years. The company can also thrive amidst inflation and high or rising interest rates and can provide a high income return even if the market struggles through an inflation/recession catch-22.
In a flatter or faltering market, dividends provide a bigger part of total returns. Let’s get ahead of the curve and get a big fat yield.
In this issue, I highlight a stock with a massive dividend yield that has shown good price stability for several years. The company can also thrive amidst inflation and high or rising interest rates and can provide a high income return even if the market struggles through an inflation/recession catch-22.
While the financial news obsesses over what the Fed might have vaguely implied in the latest statement, the world is morphing into a different place. The demographic of humanity is rapidly transforming in a way that will massively affect the flow of money for the rest of our lives. The world is currently undergoing a technological revolution that is transforming society and everyday life.
The aging population and the technological revolution are megatrends that will dominate the investment landscape for years to come regardless of what the Fed does, or GDP in the next few quarters, or whoever gets elected president. It’s not an accident that the best performing stocks in the Cabot Dividend Investor portfolio are in healthcare and technology. Nor will it be an accident that these same stocks continue to dominate from this point forward.
In this issue, I highlight the massive opportunity to position yourself in front of a tsunami that could provide the best investments of your lifetime.
The aging population and the technological revolution are megatrends that will dominate the investment landscape for years to come regardless of what the Fed does, or GDP in the next few quarters, or whoever gets elected president. It’s not an accident that the best performing stocks in the Cabot Dividend Investor portfolio are in healthcare and technology. Nor will it be an accident that these same stocks continue to dominate from this point forward.
In this issue, I highlight the massive opportunity to position yourself in front of a tsunami that could provide the best investments of your lifetime.
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.
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.
A year from now we could be in a raging bull market or bounding toward a recession. Interest rates could be high or much lower. And we have to see what will happen with these wars and who will be elected president in November. Nobody knows the answers to these questions.
But a year from now there is at least one thing we can bank on: The population is already older than ever before in history and will continue to get still older at warp speed. Between 2011 and 2029, about 76 million boomers born in the U.S. between 1946 and 1964 will turn 65. That’s about 3.6 million per year. There will be tens of millions more older people running around in the years ahead.
The inescapable fact about older people is that they spend much more than any other segment of the population on healthcare. That’s just how we’re built. Boomers control about 70% of this nation’s wealth and the aging population has enormous implications for businesses and markets.
Certain healthcare companies and stocks are positioned ahead of a megatrend and a massive wave of spending. In this issue, I highlight two “BUY”-rated portfolio healthcare stocks. If you don’t own them already, they are well worth considering.
But a year from now there is at least one thing we can bank on: The population is already older than ever before in history and will continue to get still older at warp speed. Between 2011 and 2029, about 76 million boomers born in the U.S. between 1946 and 1964 will turn 65. That’s about 3.6 million per year. There will be tens of millions more older people running around in the years ahead.
The inescapable fact about older people is that they spend much more than any other segment of the population on healthcare. That’s just how we’re built. Boomers control about 70% of this nation’s wealth and the aging population has enormous implications for businesses and markets.
Certain healthcare companies and stocks are positioned ahead of a megatrend and a massive wave of spending. In this issue, I highlight two “BUY”-rated portfolio healthcare stocks. If you don’t own them already, they are well worth considering.
Things look good for 2024. Inflation is down, interest rates have likely peaked, and there is no sign of recession. But you never know. It’s a tough game to predict the future of the market. However, certain trends are likely to persist.
It’s a good bet that interest rates have peaked. Sure, they could edge higher from here. But they are unlikely to soar to new highs past 5% for the 10-year Treasury. The situation would have to completely reverse for that to happen. Meanwhile, stocks that have been dragged lower by rising interest rates have come alive again.
These stocks, which have strong track records of market outperformance, are at historically cheap valuations, have established upward momentum, and are positioned ahead of a likely slowing economy.
Also, artificial intelligence is here to stay. Businesses must spend on it not only for competitive advantage, but as a matter of survival. The new technology will continue to be a strong growth catalyst for technology stocks. And the trend will continue regardless of what the Fed does, or the state of the economy, or who is elected president.
In this issue, I highlight a fantastic dividend stock whose long record of strong performance has been interrupted these last two years. It’s also a company that focuses on technology and will surely benefit from the proliferation of AI in the years ahead. The timing for this stock should be outstanding.
It’s a good bet that interest rates have peaked. Sure, they could edge higher from here. But they are unlikely to soar to new highs past 5% for the 10-year Treasury. The situation would have to completely reverse for that to happen. Meanwhile, stocks that have been dragged lower by rising interest rates have come alive again.
These stocks, which have strong track records of market outperformance, are at historically cheap valuations, have established upward momentum, and are positioned ahead of a likely slowing economy.
Also, artificial intelligence is here to stay. Businesses must spend on it not only for competitive advantage, but as a matter of survival. The new technology will continue to be a strong growth catalyst for technology stocks. And the trend will continue regardless of what the Fed does, or the state of the economy, or who is elected president.
In this issue, I highlight a fantastic dividend stock whose long record of strong performance has been interrupted these last two years. It’s also a company that focuses on technology and will surely benefit from the proliferation of AI in the years ahead. The timing for this stock should be outstanding.
Despite the index returns this year, many stocks are still in a bear market.
Some interest rate-sensitive stocks recently fell to the lowest level since the trough of the pandemic market more than three years ago. But interest rates have likely peaked. And the main reason for the decline is over.
Buying stocks in the throes of a bear market has proven to be a winning strategy over time. Buying stocks after they have already started to climb out of the lows has proven to be a winning strategy sooner.
The timing may be perfect for a rare opportunity to generate much higher returns than can normally be expected from stocks of defensive companies. In this issue, I highlight a defensive stock that had been a stellar performer before inflation and rising interest rates took hold. It is priced near the lowest valuations in its history and has recently been generating upward momentum.
Some interest rate-sensitive stocks recently fell to the lowest level since the trough of the pandemic market more than three years ago. But interest rates have likely peaked. And the main reason for the decline is over.
Buying stocks in the throes of a bear market has proven to be a winning strategy over time. Buying stocks after they have already started to climb out of the lows has proven to be a winning strategy sooner.
The timing may be perfect for a rare opportunity to generate much higher returns than can normally be expected from stocks of defensive companies. In this issue, I highlight a defensive stock that had been a stellar performer before inflation and rising interest rates took hold. It is priced near the lowest valuations in its history and has recently been generating upward momentum.
The market has been highly unpredictable over the last several years. Things are too uncertain to make bets on the current outlook. Timing the market and betting on sector rotation is a riverboat gamble. I’d rather bank on prevailing trends that will transcend short-term market gyrations.
There is a strong prevailing positive trend in the energy industry, particularly American energy.
Clean energy is the future, but not the near future. The world will continue to rely overwhelmingly on fossil fuels for at least the rest of this decade and probably much longer. But the world has underinvested in oil and gas exploration and production over the last decade and a half. Global supplies are straining to meet growing demand. The dynamic will last for some time.
Investors are realizing the value of companies and stocks in a sector that had been neglected for many years until recently. While commodity prices will go up and down based on several circumstances, energy companies should benefit over time going forward.
In this issue, I highlight the largest American oil refiner. The stock has been a stellar performer. And the company will continue to benefit from cheaper American oil and a reduced number of refineries.
There is a strong prevailing positive trend in the energy industry, particularly American energy.
Clean energy is the future, but not the near future. The world will continue to rely overwhelmingly on fossil fuels for at least the rest of this decade and probably much longer. But the world has underinvested in oil and gas exploration and production over the last decade and a half. Global supplies are straining to meet growing demand. The dynamic will last for some time.
Investors are realizing the value of companies and stocks in a sector that had been neglected for many years until recently. While commodity prices will go up and down based on several circumstances, energy companies should benefit over time going forward.
In this issue, I highlight the largest American oil refiner. The stock has been a stellar performer. And the company will continue to benefit from cheaper American oil and a reduced number of refineries.
It’s a confusing market, to say the least. Six months from now we could be in an environment of high rates and sticky inflation, or we could be spiraling toward recession, or anything in between. And stock sector performance is highly dependent on which situation unfolds.
Forget trying to predict the near-term market gyrations, or the Fed, or GDP. Instead, let’s focus on the bigger picture and what we do know. For example, know for a fact the population is aging at warp speed. The population is older than it has ever been all over the world. And the trend is accelerating.
We are in the midst of a tectonic shift in the human population that will have a profound effect on the market and economy. Companies that benefit from this megatrend will have a huge advantage. It’s not an accident that pharmaceutical stocks Eli Lilly (LLY) and AbbVie Inc. (ABBV) are the best performing stocks in the portfolio.
In this issue I highlight the stock of a company that serves a vital role in the pharmaceutical supply chain. It operates a near monopoly that grows every year. Performance has been spectacular and there is every reason to believe the good times will continue.
Forget trying to predict the near-term market gyrations, or the Fed, or GDP. Instead, let’s focus on the bigger picture and what we do know. For example, know for a fact the population is aging at warp speed. The population is older than it has ever been all over the world. And the trend is accelerating.
We are in the midst of a tectonic shift in the human population that will have a profound effect on the market and economy. Companies that benefit from this megatrend will have a huge advantage. It’s not an accident that pharmaceutical stocks Eli Lilly (LLY) and AbbVie Inc. (ABBV) are the best performing stocks in the portfolio.
In this issue I highlight the stock of a company that serves a vital role in the pharmaceutical supply chain. It operates a near monopoly that grows every year. Performance has been spectacular and there is every reason to believe the good times will continue.
This year’s strong market has surprised most pundits. Hopefully, the good times last. Anything is possible.
I don’t want to get into the business of trying to predict what the market will do over the rest of the year. Even if you get things right, some stupid headline can come out of nowhere and change all the math. There’s a much better way than market timing.
Buying good stocks cheap is perhaps the best way to assure good returns over time. Different market sectors go in and out of favor all the time. Technology stocks were out of favor at the beginning of this year. No one wanted energy stocks at the beginning of 2021.
You may not think there are a lot of bargains anymore. Sure, it’s a bull market for the indexes. But it is still the darkest days of the bear market in certain places. Defensive stocks in utilities and other sectors are wallowing near the lows of last October while the indexes are whooping it up.
In this issue, I highlight three defensive portfolio positions. These stocks are all selling near 52-week lows and, in some cases, multi-year lows. But operational results at these companies have been as strong as ever. And all these currently out-of-favor stocks have long histories of superstar performance that blows away the returns of the overall market.
Forget the Fed, and inflation, or the velocity of the landing. Buying some of the very best dividend stocks on the market near the lowest valuation at which they ever sell should be a money-making strategy regardless of what happens with all that other stuff.
I don’t want to get into the business of trying to predict what the market will do over the rest of the year. Even if you get things right, some stupid headline can come out of nowhere and change all the math. There’s a much better way than market timing.
Buying good stocks cheap is perhaps the best way to assure good returns over time. Different market sectors go in and out of favor all the time. Technology stocks were out of favor at the beginning of this year. No one wanted energy stocks at the beginning of 2021.
You may not think there are a lot of bargains anymore. Sure, it’s a bull market for the indexes. But it is still the darkest days of the bear market in certain places. Defensive stocks in utilities and other sectors are wallowing near the lows of last October while the indexes are whooping it up.
In this issue, I highlight three defensive portfolio positions. These stocks are all selling near 52-week lows and, in some cases, multi-year lows. But operational results at these companies have been as strong as ever. And all these currently out-of-favor stocks have long histories of superstar performance that blows away the returns of the overall market.
Forget the Fed, and inflation, or the velocity of the landing. Buying some of the very best dividend stocks on the market near the lowest valuation at which they ever sell should be a money-making strategy regardless of what happens with all that other stuff.
The market looks great right now. Inflation is falling fast, the Fed is just about done hiking rates, and there is no recession in sight. It looks like we will get through the steepest rate-hike cycle in decades without much economic pain.
But nothing is certain. Inflation could rise again. The Fed may keep rates high for longer than the market expects. The economy may turn south in the quarters ahead. There could be more trouble with bank failures or the war in Ukraine. S&P earnings have been contracting for three straight quarters.
We’ll see if the market can add to the 30% rally from the low, or if it turns south again. A reasonable argument can be made for either scenario. Instead of trying to guess the possible short-term gyrations, let’s look to investments that should be longer-term winners no matter what.
In this issue, I highlight a stock that diversifies the portfolio into the consumer space. The company operates in an incredible niche market that has provided earnings growth for 31 consecutive years and enabled the stock to outperform the market in every measurable period over the last 15 years. The company is positioned for strong growth in the years ahead and the stock has a long track record of delivering stellar returns in all kinds of markets.
But nothing is certain. Inflation could rise again. The Fed may keep rates high for longer than the market expects. The economy may turn south in the quarters ahead. There could be more trouble with bank failures or the war in Ukraine. S&P earnings have been contracting for three straight quarters.
We’ll see if the market can add to the 30% rally from the low, or if it turns south again. A reasonable argument can be made for either scenario. Instead of trying to guess the possible short-term gyrations, let’s look to investments that should be longer-term winners no matter what.
In this issue, I highlight a stock that diversifies the portfolio into the consumer space. The company operates in an incredible niche market that has provided earnings growth for 31 consecutive years and enabled the stock to outperform the market in every measurable period over the last 15 years. The company is positioned for strong growth in the years ahead and the stock has a long track record of delivering stellar returns in all kinds of markets.
Updates
The market took a jab to the face last week, but it still looks good. It’s still a strong market. But one that is showing some vulnerability.
After a great first half and a strong July, the market pulled back 2% last week, reversing most of the July gains. The culprit was a Biden administration announcement of new AI chip export restrictions to China. That news also combined with a perceived likelihood of a Trump presidency and the possibility of further trade frictions with China. The technology sector, and semiconductor stocks in particular, took it on the chin.
After a great first half and a strong July, the market pulled back 2% last week, reversing most of the July gains. The culprit was a Biden administration announcement of new AI chip export restrictions to China. That news also combined with a perceived likelihood of a Trump presidency and the possibility of further trade frictions with China. The technology sector, and semiconductor stocks in particular, took it on the chin.
There isn’t much not to like about this market. After a strong first half of the year, the market is having a great July. And the rally is broadening out. It’s not just technology anymore.
Well, the results are in for the first half of the year. And they’re very good. The S&P 500 soared an impressive 14.5% in the first six months of 2024. That’s a 29% annual pace. And it follows a 22% market return in 2023.
But I believe it is unlikely that the S&P will finish the year up 29%. That would be an epic year, but there are still a lot of challenges, like interest rates near the highest level in two decades. That means market returns must at least flatten out somewhat going forward. It’s also true that the technology rally has petered out in the last few weeks.
But I believe it is unlikely that the S&P will finish the year up 29%. That would be an epic year, but there are still a lot of challenges, like interest rates near the highest level in two decades. That means market returns must at least flatten out somewhat going forward. It’s also true that the technology rally has petered out in the last few weeks.
The market has been fantastic. But it was driven higher by technology. Now, technology is rolling over. Will the market roll over too, or will the neglected sectors pick up the slack?
This market just continues to forge ever higher. The S&P 500 closed at new all-time highs four times last week. The index is now up 15% YTD, and we’re not even at the halfway point.
It’s been a great market for a while. But it has leveled off since the middle of May. I expect more of the same going forward.
The S&P 500 pulled back in early April after a five-month rally as sticky inflation soured the interest rate narrative. The index then recovered to new highs in the middle of May on an improved interest rate outlook. But stocks have since leveled off as the interest rate outlook got stuck in the mud.
The S&P 500 pulled back in early April after a five-month rally as sticky inflation soured the interest rate narrative. The index then recovered to new highs in the middle of May on an improved interest rate outlook. But stocks have since leveled off as the interest rate outlook got stuck in the mud.
The market has been good for a while. The S&P 500 is up roughly 11% YTD and about 30% since late October. But I expect choppier waters ahead.
The main driver of the S&P has been the technology sector, which is being driven higher by the artificial intelligence catalyst. Most of the rest of the market seems to be at the mercy of the interest rate narrative. And that seems to change every couple of weeks nowadays.
The main driver of the S&P has been the technology sector, which is being driven higher by the artificial intelligence catalyst. Most of the rest of the market seems to be at the mercy of the interest rate narrative. And that seems to change every couple of weeks nowadays.
The market has regained its footing, and here comes Nvidia (NVDA).
All eyes are on the Nvidia earnings report scheduled to come out after the closing bell on Wednesday. It was an Nvidia earnings report two years ago that featured a massive demand for artificial intelligence products and services that sparked the AI craze and ignited a powerful rally in technology stocks.
All eyes are on the Nvidia earnings report scheduled to come out after the closing bell on Wednesday. It was an Nvidia earnings report two years ago that featured a massive demand for artificial intelligence products and services that sparked the AI craze and ignited a powerful rally in technology stocks.
It’s been a good month in the market, so far. The S&P 500 has regained all the dip from April and is now within a whisker of the all-time high. The driving forces have been an improving interest rate story and solid earnings.
With 92% of S&P 500 companies having reported, earnings increased an average of 5.4% over last year’s quarter. But it’s better than that. If you take out the report of Bristol-Myers Squibb (BMY), average earnings growth would be 8.3% for all the other stocks on the index. That’s a strong gain.
With 92% of S&P 500 companies having reported, earnings increased an average of 5.4% over last year’s quarter. But it’s better than that. If you take out the report of Bristol-Myers Squibb (BMY), average earnings growth would be 8.3% for all the other stocks on the index. That’s a strong gain.
What had been a tug-o-war between the souring interest rate narrative and earnings excitement is showing signs of veering in yet another direction.
The news on both inflation and the economy has been worse. The Fed’s favorite inflation gauge, the Personal Consumption Expenditures Index (PCE), came in higher than expected at 3.7% last week. Inflation continues to creep higher this year. And that’s with interest rates already at the highest level in decades.
The news on both inflation and the economy has been worse. The Fed’s favorite inflation gauge, the Personal Consumption Expenditures Index (PCE), came in higher than expected at 3.7% last week. Inflation continues to creep higher this year. And that’s with interest rates already at the highest level in decades.
Just when things were getting seriously ugly, the market started having a great week.
Interest rate disappointment is being replaced by earnings anticipation. The new earnings season came in the nick of time. After five straight up months, the S&P was having a terrible April. Last week was the worst week of the year so far and the index has fallen over 5% from the recent high.
Interest rate disappointment is being replaced by earnings anticipation. The new earnings season came in the nick of time. After five straight up months, the S&P was having a terrible April. Last week was the worst week of the year so far and the index has fallen over 5% from the recent high.
After five consecutive up months for the market, April has been a bummer. Is this just an overdue end to the recent rally or something worse?
The S&P 500 is down 3.6% so far in April. But the more interest rate-sensitive sectors have faired far worse. Sure, the rally was long in the tooth anyway. But the narrative has also changed for the worse.
The S&P 500 is down 3.6% so far in April. But the more interest rate-sensitive sectors have faired far worse. Sure, the rally was long in the tooth anyway. But the narrative has also changed for the worse.
Alerts
Early Tuesday morning Biopharmaceutical giant AbbVie (ABBV) announced plans to acquire Ireland-based Allergan plc (AGN) for $63 billion. The market hates the deal and AbbVie stock plummeted over 16% on the day. Let’s take a look at the deal and see what’s going on.
As you noticed, yesterday’s issue of Cabot Dividend Investor was jointly edited by Chloe Lutts Jensen, for whom it was the final issue, and Tom Hutchinson, for whom it was the first.
One of our positions reported middling third-quarter results this morning, and the stock opened 6% lower, although it’s already making up some of those losses. As a result, we’re moving it to Hold.
Yesterday brought widespread carnage to the markets, which has carried on to today, but some tech stocks have found support. For now we are going to be watching and waiting, but I want to comment on three current holdings.
One of our positions fell nearly 7% after reporting earnings Friday, and the stock started today with further losses. With the lack of support, it means more downside is the most likely near-term scenario here and it’s time to sell.
Markets pulled back yesterday and the Dow, S&P 500 and Nasdaq all closed lower. A couple of our holdings were hit particularly hard, so I wanted to send a quick update on two of our positions even though I’m not recommending any action.
One of our stocks reported EPS that missed estimates and lowered its guidance range this morning, and the stock opened 4% lower. We’ll look for an opportunity to unload the rest of our shares over the coming few days.
Given the shakiness of the broad market, we want to be reducing our exposure to weak stocks today. As noted in yesterday’s update, we’re going to reduce risk today by taking partial profits in one of our positions.
Markets ended last week on a sour note as the U.S. and China imposed tit-for-tat tariffs and Facebook continued to drag tech stocks lower. The major indexes all declined more than 5% for the week, their worst weekly performance in over two years. I’m moving two of our most affected stocks to Hold today.
After a half-hearted mid-week bounce, the stock market had another rough day yesterday. The S&P 500 fell almost 4%, and is now 10% off its all-time high. That means we’re now officially in a correction, although we didn’t really need yesterday to tell us that.
Our latest recommendation, pulled back sharply after reporting earnings Friday morning.