Risk has been rising for a while, and this week, we’ve seen some wild action along with some abnormal selling. That said, we haven’t seen a rash of breakdowns, either, so we’re moving gradually--we pared back some earlier this week, leaving us with 27% in cash, but we’re also willing to give our stocks a bit of rope as we wait to see how this plays out. As always, we’re flexible when looking ahead, and are willing to put money to work if this morphs into yet another shakeout, or pare back further if the sellers stay at it.

In tonight’s issue, we go over all our stocks in depth, write a piece about the marijuana industry and talk about a couple of intriguing individual stocks that have been setting up for months and could be ready to go if the market can find support.

2021 kicked off with a bang, as investors small and large poured money into marijuana stocks in anticipation of growing legalization, so our portfolio is off to a fine start.

But the threat of a downturn is ever-present, and the longer the bull market runs, the greater my unease.



Still, I can’t argue with the trend, which by all measurements remains up, so I’m keeping the portfolio fully invested. And if you’ve got cash, the softness of recent days is now presenting some buying opportunities!Full details in the issue.



Full details in the issue.

The S&P 500 is making yet another new all time high. The index has risen 72% since last March and over 17% just since the beginning of October. That’s amazing performance in a short amount of time.

I’m positive on the market for the rest of this year as a full recovery along with low interest rates and massive stimulus should be very positive for stocks. But the market never goes straight up. And a selloff is overdue. It would present a buying opportunity ahead of a promising year.



While I am increasingly cautious in the near term, there are very select places where great value can still be found. And even fewer that historically move independently of the overall market.



In this issue I highlight a stock that moves to its own drummer and not with the market. It is near the low point of its range in a long-term uptrend facilitated by rapid growth in its business. The situation presents an ideal time to buy into the stock now and write calls later.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the February 2021 issue.

This month we look at energy pipeline stocks. These companies are heavily out of favor, yet a secular shift in their strategic priorities may finally restore their appeal. We list five that look attractive.



We also explore some bargains in the United Kingdom. This island nation is dually challenged by Brexit and the pandemic. We highlight seven stocks that have company-specific turnarounds that look promising.



Our feature recommendation is Viatris (VTRS). Created through the recent merger of Mylan and Pfizer’s Upjohn division, this company is now one of the world’s largest generic pharmaceutical manufacturers. Viatris should generate stable revenues and solid free cash flow, but investor skepticism is high. With the shares trading at a low 4.3x earnings, the step-up in leadership quality and transparency, and an attractive 5.2% dividend yield, the shares look poised for considerable gains.



We also include comments on recent price target and ratings changes, including our earlier sell recommendation on DuPont.



Please feel free to send me your questions and comments. This newsletter is written for you. A great way to get more out of your letter is to let me know what you are looking for.



I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.

The stock market has been swinging up and down in recent days as investors digest fourth-quarter earnings results and look for the next catalyst to move markets. That said, it’s a good idea to get a bit more defensive with new positions, focusing on established stocks that are less volatile.

Current Market Outlook


It’s usually hardest to keep things simplest, which is why we put our main emphasis on the trends of the major indexes and action of leading stocks—and with both of those still positive, we’re sticking to a generally bullish stance. However, there’s little doubt we’re seeing some late-in-the-advance happenings (heavily-shorted stocks going to the moon, wild rotation intraday among sectors, etc.) and, chart-wise, nearly everything is sticking straight up in the air (the Nasdaq was about 1,100 points above its 50-day line this morning). We never pick tops, but we also prefer not to leave our brains at the door, and there’s little doubt that the risk/reward for most stocks here isn’t great. Thus, we’re willing to give things some wiggle room, but we’re raising stops and being selective on the buy side, focused mostly on entering on dips.

This week’s list has a wide mix of stocks, and most have been either setting up during the past few months or staging initial pullbacks after huge runs. Our Top Pick is Cleveland-Cliffs (CLF), which is finally beginning to pull in after a big run—further dips would be tempting.

Stock Name	Price	Buy Range	Loss Limit
10X Genomics (TXG)	183	175-185	157-162
1Life Healthcare (ONEM)	51	48.5-50.5	42-43
Cleveland-Cliffs (CLF)	17	15.4-16.4	13.5-14
Cronos Group (CRON)	10	9.5-10.2	8.3-8.7
Goldman Sachs Group, Inc. (GS)	283	276-284	248-253
Inseego (INSG)	21	18.5-20	15.5-16.5
Peloton (PTON)	157	152-159	133-137
Schrodinger, Inc. (SDGR)	96	88-92	77-79
Shopify (SHOP)	1206	1170-1220	1050-1080
Unity Software (U)	151	148-153	133-136

The market’s main trend remains up, and thus I continue to recommend that you be heavily invested.

At the same time, it’s important (as ever) to monitor your individual stocks and prune any from your portfolio that no longer deserve to be there. In our portfolio, there are no stocks that fall into that category this week.



But the market is pricey. Stocks are extended. So today’s recommendation is a low-risk dividend-payer with solid growth prospects as the world transitions to a world of clean energy.



Details inside.

Get this Investor Briefing now, Everything You Need to Know about Ground-Floor Opportunities, and you’ll learn about investing opportunities that can make you a fortune because you’re in at the beginning. From the secrets to early-stage stock profits to how to find big-performing small-cap stocks … from beer stocks with big potential to the best investing strategy in a down market … and from hottest IPOs to MedTech stocks with huge upside. Everything You Need to Know about Ground-Floor Opportunities is your best guide to knowing where and when to invest in the newest companies.

Here is your January Wall Street’s Best Digest Top Picks issue 837.

Happy New Year to you all!



I hope your holidays were wonderful. I’m very hopeful for a much healthier New Year for all of us in 2021 and am also very thankful for the performance of the stock markets last year. The biggest winner was technology, with the Nasdaq returning a whopping 45%, followed by 18.4% at the S&P 500, and 9.7% at the Dow Jones Industrial Average.



And I’m thrilled to say, with this Top Picks issue and a calculation of 2020’s Top Picks, that our newsletter contributors really did hit it out of the park—with an average 180.19% return! Our Top 5 picks averaged 252.7%, with the #1 pick, Inovio Pharmaceuticals (INO)—chosen by Joseph Cotton of Cotton’s Technically Speaking—gaining 742.86%! Congratulations to them all!



And the crop of Top Pick recommendations for 2021 also look very attractive.



We begin with Growth stocks from the marijuana, electric vehicle charging, and space and air travel sectors. Our Financial choices include three banks and a jewelry company. In Healthcare, you’ll find a business of cell-based products, an insulin maker, COVID-related biotechs, and a couple of companies focusing on nervous system disorders.



Our Technology ideas come from the social media, search, travel, robotics, and artificial intelligence industries. The Real Estate Investment Trust section includes a marijuana REIT, as well as one that operates in the cell tower business. In High Yield, you’ll find a retail pharmacy and a tobacco company.



In Income, one of our contributors is focusing on Treasury bills instead of equities. And that conservative slant is also seen in our Resources and Energy section, where our advisors chose three gold companies, a pipeline business, and an electric utility. We’ve also included a few Low-Priced Stocks for you, coming from the energy, biotech, and lithium sectors.



Lastly, our Top Picks wrap up with a variety of Funds & ETFs in the income, cybersecurity, robotics/AI, and marijuana industries.



Our final recommendation this month is a non-Top Pick, an alternative energy company.



I’m looking forward to seeing how these Top Picks do this year, as well as bringing you lots more excellent recommendations from our more than 200 contributors. I look forward to hearing of your successes. Please reach out to me at nancy@financialfreedomfederation.com, with any questions and comments.

2021 is off to a good start thanks to strong earnings and continued investor enthusiasm for big technology companies and a new administration. The backstop from governments and central banks, as well as the consensus among investors that a strong economic recovery is coming this year, has for now pushed volatility out of the market.

The Explorer portfolio had a good week and today we add another SPAC merging with an established, fast-growing financial payments firm based in the United Kingdom.

This past week there was a 13% gain in one of our newer recommendations and I’m recommending the sale of another.

It’s quite common that a year’s top-performing stocks and industries can fade after the new year arrives as investors shift money into industries that have been long-ignored. “Buy low” doesn’t just refer to stock market corrections and random stocks that have fallen precipitous amounts. “Buy low” can also refer to unrecognized industry-wide opportunities.

As we march toward the end of Q4 and the beginning of 2018, most investors are, rightly, turning their attention to what’s likely to happen in the year ahead. Returns this year have been nothing short of outstanding. While we’ve had bouts of volatility, especially in individual stocks, there’s been astounding breadth of strength across almost all sectors.

Remain mostly bullish, but continue to play things on a stock-by-stock basis. The overall market remains in fine shape, and we’re pleased to see many growth stocks find buyers in recent days (though many still appear to need more time to rest after big runs this year). In the Model Portfolio, we’re buying a 10% position in a leading Bull Market stock that’s pulled back a bit after a decisive breakout. That will leave our cash position near 18%.

The major indexes have moved pretty much straight up since our last update, and many of the troubling divergences we’d been watching have disappeared. Financials and industrial stocks remain strong, while tech stocks have managed to get back on the horse.

The Office of the U.S. Trade Representative and the Department of Commerce have taken a decidedly different approach to U.S. participation in international trade since November 2016. I realize that international trade can be somewhat of a dry topic, but since these decisions are affecting the bottom line in U.S. industry, stock market opportunities are unfolding before us.

Global markets were all mixed up this week as old world-type stocks moved higher and new world stocks—mostly tech—sold off. Things have normalized a little over the past two sessions however as investors appear to have come to their senses and realized that, while tech might have moved too far too fast, many high-flying technology stocks are doing so well because they’ve been growing at high rates, quarter after quarter, and they look like they’ll continue to do so.

The iShares EM Fund (EEM) has dipped decisively below its 25- and 50-day moving averages, which pushes the Cabot Emerging Markets Timer into negative territory. We have one change tonight, moving one stock from Buy to Hold.

One stock is now rated Sell, and three stocks are rated Sell a Portion.

It remains to be seen whether the market’s rotation from tech into older economy names is a temporary tax-bill-related phenomenon or a longer-term cycle. But historically, a day like last Wednesday, when the Nasdaq closes more than 1% lower and the Dow closes at least 0.4% higher, is followed by at least a month of Dow outperformance.

The economy continues to show robust recovery led by a robust housing market. New single-family house sales unexpectedly rose 6.2% to a seasonally adjusted annual rate of 685,000 this October. We are near-term bullish on our home improvement- and construction-related recommendations.

Raise a little cash. Today’s huge selling wave in growth stocks isn’t the end of the world, as the trends of the major indexes and most leading stocks is still up. Thus, it’s vital to take things on a stock-by-stock basis, selling those that are raising red flags and holding (or buying) those that are dipping normally.

This stock gets crushed on earnings.

This bank recently split its stock 2-fo-1, and is seeing its EPS forecasts on the rise.

The broad market has advanced nicely since mid-day Monday when news that the Fed might lower interest rates sparked a wave of buying. Long-term, the future is bright. But short-term, the portfolio is happy holding a cash level of 23%, deferring new buying.

This recent IPO stock was just named and IBD (Investor’s Business Daily) Breakout Stock, which highlights stocks in or near a buy zone.

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.

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.