Markets hit pause this week as third-quarter earnings begin rolling in, doubt reigns over chance of another stimulus bill, and uncertainty over the outcome of the presidential election just three weeks out is palpable. Overseas, the Stoxx Europe 600 fell 2.2% as local governments and local authorities hurried to impose lockdown restrictions to halt the spread of Covid-19 cases. This week’s new recommendation is a fintech stock offering an intriguing mix of Southeast Asian, American and European growth. Interestingly, it has a partnership with Sea Limited (SE) and perhaps can best be described as a young “Shopify of mobile”.

Today, we are being a little contrarian and recommending an investment in a company that operates in a down and out industry. Nonetheless, we believe there is significant upside over the next couple of years.

This company’s characteristics include:

• High margins
• No capex requirements
• An 8% dividend yield
• A cheap valuation

All the details are inside this month’s Issue. Enjoy!

These are uncertain times with the election coming up and Covid still hanging around. But instead of trying to navigate the unpredictable twists and turns in the near term, let’s focus on things that are sure to last beyond the current headlines. This is a great time to focus on issues that will drive business and the markets long beyond 2020 while no one else is looking and bargains can be had.

One issue that is certain to remain is the aging of the population. The U.S. and global populations are older now than ever before and getting older still at a break-neck pace. The trend is even more pronounced in other parts of the world.



Regardless of who is elected president, the population will get older. No matter what course the virus takes, the population will continue to age. You can take that to the bank. In this issue, I identify two of the very best health care companies in the world that are perfectly positioned to benefit from the aging trend.

The stay-at-home paradigm has revolutionized the workforce, accelerating demands on the cloud and in telecommunications – including the rollout of next generation 5G wireless networks.

The bull market is alive and well, as the intermediate-term negative signal I mentioned in recent weeks has been erased by a new positive signal. Happily, we sold very few stocks during the correction (most of ours behaved very well) so today’s recommendation means the portfolio is once again full.

And what is today’s recommendation? A major provider of global infrastructure services whose stock has low risk at this point and good potential for profit as the world slowly gets back to business.

Current Market Outlook


Three weeks ago, the major indexes were on their knees and very few stocks were in good shape. But there’s been a steady improvement in the overall evidence since then, and while it’s not 1999 out there, the picture looks pretty good—the intermediate-term trend has returned to the bullish side of the fence, while many individual stocks (growth and otherwise) show constructive action. We’ve even seen a big pickup in the number of names hitting new highs (multi-month high in NYSE new highs on Friday)! Short-term, the steady up-move in the market and many stocks could easily bring a pullback or some hesitation, but there’s no question the rubber-meets-the-road evidence has improved greatly, which is what counts most to us. We’re nudging our Market Monitor up to a level 7 in today’s issue.

This week’s list has a bunch of good-looking charts from a variety of sectors. Our Top Pick is Marvell Technology (MRVL), which is helping to lead the recent charge in chip stocks.

Stock Name	Price	Buy Range	Loss Limit
Abercrombie & Fitch (ANF)	16.55	15.5-16.5	14-14.5
Fastly (FSLY)	126.61	118-129	105-108
Marvell Technology Group (MRVL)	43.51	42-45	38-39
Paylocity (PCTY)	188.72	178-188	160-164
Penn National Gaming (PENN)	64.89	62-66	56-58
Roku, Inc. (ROKU)	221.62	215-222	194-198
Synnex Corp. (SNX)	150.56	145-152	131-135
Tesla, Inc. (TSLA)	441.83	435-448	392-400
TG Therapeutics, Inc. (TGTX)	30.49	29-31	26-27
United Rentals, Inc. (URI)	198.89	194-202	175-178

It’s not a blastoff-type of environment, but the evidence has steadily improved during the past three weeks, first due to the action of leading growth stocks, and now, our Cabot Tides have returned to bullish territory. Thus, we continue to follow the evidence, slowly putting money to work and rotating into stronger situations. Last week, we averaged up in two of our recent buys, and tonight, we’re adding a full position in a fresh leader.

Elsewhere in tonight’s issue, we write about the ups and downs of recent IPOs, as well as one sector that is beginning to reemerge and has many stocks that fit our stock picking criteria.

This month and early November will be jammed with possibly market-moving events: earnings season, presidential (and now importantly, vice presidential) debates, the actual elections, a likely new federal stimulus package, possible change (in either direction) in the pandemic’s course, and perhaps news about a vaccine solution.

But for now, we’re stuck in Limbo-Land, with the worst (hopefully) of the pandemic behind us, yet so many unknowns just ahead. We outline some basic suggestions that we follow when in this type of market.

After a dismal 2019, when semiconductor sales fell 12% to $412 billion, the World Semiconductor Trade Statistics organization predicts that they will rise 3.3% in 2020 and 6.2% in 2021. But today’s recommendation is doing a lot better than the average chip company.

The intermediate-term negative signal I mentioned last week remains in effect, telling us some caution is appropriate, whether it be holding cash or leaning toward lower-risk stocks. But overall, I can’t say the danger is high yet—and because I sold our three highest-risk stocks last week, this week I am selling none.
As for new buying, this week I’m going with a high-potential fast-growth stock that came public last year and that was recently hitting new highs.


You may not be a user (I’m not) but you’ll almost certainly know the name.


Full details in the issue.

In the short-term, the market could be ready to rest and there’s some rotation going on, which could affect leadership. But, big picture, the intermediate- and longer-term trends are pointed up and even the broad market is returning to health.

The Dow and S&P 500 both closed at all-time highs yesterday, as the Dow notched its eighth straight day of gains. Financials were the week’s best-performing sector, as interest rates suddenly reversed direction to post big gains.

After two months of sideways trading, the three major U.S. stock market indices are rising and reaching new highs.

The market backdrop is much improved this week and small caps posted another week of encouraging action (up 2.1% over the last five sessions). The S&P 600 had that sketchy drop below the 200-day line (red line in chart) in mid-August, but the index has come back strong since.

The iShares EM Fund is holding up in fine style, holding well above its 25-day moving average, so our Buy signal remains in place. While our stocks are generally holding up well, there has been a slight increase in volatility.

The week has brought some impressive rebounds, and I’m putting two stocks back on Buy today. That brings our total number of Buy-rated positions to six (plus our bond ladder), a slightly more constructive stance than we’ve taken in recent weeks.

There’s a lot on my mind lately: hurricanes, child-rearing, college freshmen, human tragedy and Dollar Tree (DLTR).

The market didn’t change much over the past week but it feels like it’s on more solid ground. Perhaps that’s because it’s been three weeks since we were on the brink of a bigger leg down. Or because earnings-related volatility is calming down. Or because after two weeks of gains, a week of consolidation feels like the right next step.

In this Weekly Update, I summarize the latest news for one company. I also include pertinent questions from subscribers with my responses.

Growth stocks and many indexes perked up nicely during the past couple of weeks, but the intermediate-term trend is effectively neutral and we still haven’t seen much big-volume buying. We’re optimistic, but advise you to continue being selective on the buy side and holding a chunk of cash on the sideline.

Last week’s action still improves the market picture a bit, but yesterday’s panic shows we’re not out of the woods yet. I’m making one portfolio change today.

In this Weekly Update, I summarize the latest news for five companies.

The top five holdings of this fund are: Mastercard Inc A (MA, 3.64%); Microsoft Corp (MSFT, 3.43%); PayPal Holdings Inc (PYPL, 3.36%); Visa Inc Class A (V, 3.11%); and Bank of America Corporation (BAC, 2.70%).

Selling two ETFs.

Selling two ETFs.

Today, we are recommending a gold company and selling two ETFs.

The market suffered another round of selling today, and this time it was concentrated in the Nasdaq and many resilient growth stocks.

This software company is forecast to grow 25.25% annually, over the next five years.

This telecom beat Wall Streets’ estimates by $0.15 last quarter and fifteen analysts have increased their EPS forecasts for the company in the last 30 days.

This building products supplier is expected to grow by 18.7% next year.

The market was hit hard again today as investors continued to discount a protracted trade war between China and the U.S., with fears of slowing growth bringing out the sellers.

Abercrombie & Fitch (ANF) reports first-quarter 2019 results.

This railroad company beat analysts’ estimates by $0.11 last quarter, and 26 analysts have raised their EPS forecasts for the company in the past 30 days.

This Indian bank is expected to grow at an annual rate of 37.6% over the next five years.

Our Cabot Top Ten 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 Top Ten features.