Today, I’m adding Barrick Gold (GOLD). The company engages in the exploration, mine development, production, and sale of gold and copper properties

Welcome to the roller coaster marketplace! As if COVID, rising inflation, and increasing interest rates weren’t enough to spook the markets, Putin’s invasion of Ukraine finished the job. It’s been a rollicking ride, but yesterday’s recovery and today’s momentum up are great signals.

Face it, many sectors have been beaten down since the first of the year, but today, they are all in recovery mode.



Across the board, the economy continues to strengthen, and consumer confidence is holding up well. Retail sales and housing prices continue to climb; housing starts and building permits are strong; and unemployment is healthy.



That means that earnings should continue to rise, and generally, that means that stocks will also.



To take advantage of the bull market in energy, this month, I’m adding an energy company that doesn’t actually produce energy. It’s a royalty and mineral company, making money from leasing its acreage out to producers.



I look forward to hearing from you, so please keep your emails coming.



Happy Investing!

With the war in Ukraine taking center stage, it’s very hard to predict what markets will do. But we don’t need to. All we need to do is keep following proven investing systems.
The only change to the portfolio today is the downgrade of Veeco (VECO) to Hold.


As for the new recommendation, it’s probably a household name for folks in the Chicago area, but it’s a new one for me. And it’s a new stock, as well, having just come public in October.


Details inside.

Overall, nothing has changed yet with the major evidence out there, but we continue to think a bottom-building process is playing out in decent fashion so far: Last week, the major indexes sank below their January lows on news of the Russian invasion, but then rallied hugely to close the week all while showing small positive divergences in the broad market (fewer stocks hitting new lows on the Nasdaq, fewer below their 200-day lines, etc.). Moreover, there’s little doubt that sentiment is getting pretty bearish, and believe it or not the intermediate-term trend of growth funds actually isn’t far from a green light. Thus, there are some positives as it attempts to etch a low area to this three-plus-month downturn, so we’re nudging up our Market Monitor, but we need to see the market build on these baby steps before thinking the downtrend may be over.



This week’s list is very heavy on the commodity complex, as that’s clearly where the big money has been flowing. Our Top Pick is a natural gas-heavy play with as good a cash flow story as there is.

The market plunged today on news of the “official” Russian invasion, but the turnaround was even more impressive, with the buyers pouncing and driving the indexes to solid gains; combined with sour sentiment and an internal positive divergence on the Nasdaq (fewer new lows than at the January lows), and there are a few rays of light. Even so, we need to see more than just that to turn bullish--the main trends of growth stocks, the broad market and the major indexes are all down, so while today was a solid first step, we advise patience while we watch to see if the bulls can really step up.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the March 2022 issue.



In what could be a low-return market over the coming decade, stocks of relatively boring companies have a better chance to shine. We highlight five companies with grind-it-out growth, low share valuations and often-generous dividends that could produce significant market-beating returns.



We also discuss six appealing stocks we found by trolling through the 13F/D filings of like-minded institutional investors.



Our featured recommendation this month is Goodyear Tire & Rubber Company (GT). An investment in Goodyear is an opportunistic purchase of an average company whose shares have fallen sharply out of favor for what look like short-term reasons.



We note our recent price target increases for Wells Fargo (WFC), Marathon Oil (MRO) and Shell plc (SHEL).

The overall market may have a challenging year as it grapples with inflation and uncertainty about the Fed tightening.
While most companies struggle, energy and financial stocks actually thrive with inflation and rising interest rates. But there are also lesser-known areas that are also benefitting from this current bend in the road.


In this issue, I highlight a company from the shipping sector. The industry had struggled for the last decade. But the current environment is much more hospitable. Shipping rates have soared in the pandemic recovery. And these rates are likely to stay high in one particular area, container shipping.

I’m not going to sugar coat it: We are in a dodging rain drops type of market as every day a handful of stocks break down, and then continue to fall apart in the days that follow.

The same culprits continue to plague the market: historically heightened levels of inflation, upcoming Fed rate hikes, and escalating geopolitical tensions between Russia and Ukraine, with growth sectors taking the brunt of the pain. Last week the Dow lost 1.9%, the S&P 500 fell 1.6% and the tech-heavy Nasdaq dropped 1.8%. Year-to-date the Dow, S&P 500 and Nasdaq are lower by 6.2%, 8.8% and 13.4%, respectively.



Until we see some clarity in the areas of concern, the market could be in for some more rocky days/weeks like we have experienced since November, and that’s OK and normal.

The good news about the cannabis sector is that after a year-long decline, the stocks are cheap, and the sector is building a bottom.

The bad news is that we don’t have an uptrend yet.



But I do see a lot of constructive chart patterns, and as fourth-quarter reports are released in the weeks ahead (there’s one tonight), I’m optimistic that buyers will find their way back to the stocks of this great growth industry.



Full details in the issue.



Yours for wealth and wisdom.

Stocks remain under pressure as a mixture of geopolitical threats and inflation concerns weigh on the market’s growth-oriented segments. Meanwhile, as the major indexes test their January lows, we remain on the lookout for signs of bottoming and constructive setups—particularly in the tech sector. For now, though, we advise caution as this is still very much a stock picker’s market.



This week’s list includes a nice mix of key industries that are benefiting from current economic trends, including a few that have had excellent earnings reactions. Our Top Pick is a stock that should get a boost from a potential increase in travel and vacation demand in the coming months.

With many people watching the developments on the Ukraine front and the inflation front, my focus is on the broad market’s lows of late January, which serve as a line in the sand that we don’t want to see crossed. And because the market is technically in a downtrend, I continue to focus on lower-risk stocks, and hold a healthy cash position as well.
The only change to the portfolio today is the sale of Oracle (ORCL), which is going the wrong way.


As for the new recommendation, it’s a well-established American brand whose stock has shown great strength recently.


Details inside.

More Metals Join the Bull’s Parade
For the first time in recent memory, metals are looking good across most major categories. Base and precious metals are showing varying degrees of strength, while energy metals like uranium and lithium are trying to establish bottoms. Even gold is showing more sustained strength than we’ve seen in several months.

In the portfolio, we just added a new position in a blue-chip gold stock and have initiated an additional new buy in a platinum/palladium closed-end trust.

Here we are in an up leg of a bull market that began three months ago. Since early October the S&P 500 has climbed 14%. With trade issues and Iran out of the headlines, the strong economy and low interest rates are driving stocks higher with technology leading the charge.

The S&P 500 (SPX) index is up 10% since rising above its previous trading range in late November. While 10% is not necessarily a big move for a stock, it is definitely a big move for a major index.

The big thing on most investors’ minds is whether or not this market can go higher.

The big news pertaining to global investing is the signing in Washington yesterday of the phase-one “truce” trade deal between America and China.

The year is starting out great! There was some volatility associated with the Iran thing but it looks like that, along with trade issues, has faded from the headlines, for now.

Fourth quarter 2019 earnings season began yesterday with a few large banks reporting very strong results.

The market is off to a superb start to 2020 with many growth sectors finding their groove and ripping higher. The S&P 600 Small Cap Index continues to trade above the all-important (my opinion) 1,000 level and we’re seeing participation from a wider breadth of sectors than in the past.

Remain bullish, but keep your wits about you. The market remains very strong, and we’re glad to see many of our stocks that consolidated during December come to life in recent days.

Analysts expect this HVAC company to grow at a 15% annual rate over the next five years.

This pharma giant beat analysts’ EPS estimates by $0.07 last quarter.

Tomorrow is the expiration of May options, and it’s been a spectacular month for our covered call strategy.

This agricultural equipment company is forecasted to grow 35% next year.

As coronavirus matters continue to dominate the headlines and the world works toward slowly reopening, the action of marijuana stocks continues to impress—and with good reason.

Tyler is locking in profits on three stocks.

This health-care data stock reported after the close yesterday with results that beat lowered expectations.

GM reported earnings that beat analysts’ estimates.

Crista updates us on two stocks, one in the portfolio and one that she has recommended in the past year.

This portfolio stock reported earnings and moves to Buy.

Long-term care facilities have taken a hit due to coronavirus, but this Canadian company looks like it’s going to be fine.

This Cabot Micro-Cap Insider recommendation moves to Hold.

A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.

Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Our Cabot Momentum Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Momentum Trader features.