Issues
Let’s start with some remarkable statistics.
Nvidia’s (NVDA) fourth-quarter revenue reported yesterday was $68 billion, up 73% from the same period last year. It now makes more revenue in a single quarter than most chip competitors generate in an entire year. Nvidia’s profit for the last 12 months was $120 billion. Just three years ago, Nvidia’s profit was $4.4 billion.
It is estimated that more than one-third of the value of the stock market is represented by companies based in the San Francisco Bay/Silicon Valley area.
Nvidia’s (NVDA) fourth-quarter revenue reported yesterday was $68 billion, up 73% from the same period last year. It now makes more revenue in a single quarter than most chip competitors generate in an entire year. Nvidia’s profit for the last 12 months was $120 billion. Just three years ago, Nvidia’s profit was $4.4 billion.
It is estimated that more than one-third of the value of the stock market is represented by companies based in the San Francisco Bay/Silicon Valley area.
We continue to get solid signals from the White House that cannabis rescheduling is on track. That’ll be a significant catalyst for cannabis stocks. The only question is the timing. That remains uncertain and probably unknowable. Cannabis stocks remain a buy on weakness ahead of this catalyst.
The background here is that last December, President Donald Trump signed an executive order directing the Justice Department to move cannabis to Schedule III from Schedule I under the Controlled Substances Act.
The background here is that last December, President Donald Trump signed an executive order directing the Justice Department to move cannabis to Schedule III from Schedule I under the Controlled Substances Act.
The bull market has broadened out beyond technology in a big way. While the S&P 500 is about even for the year so far, most market sectors are beating the index, and by a lot. In fact, six of the eleven sectors have a better than 8% YTD return, not even two months into the year.
The new market dynamic is having a profound impact on the portfolio. Several stocks that had been dead weight in the portfolio have soared in recent months to 52-week highs. The new market has turned previously underperforming stocks into strong income generators.
It has been a strong run for several portfolio stocks. But a largely successful earnings season is almost over. That means there will be no obvious catalyst to continue driving stocks higher, at least for now. The situation makes it a better time to capitalize on recent price surges instead of adding more positions and hoping for more.
Under the current circumstances, the biggest market opportunity right now is income. In this issue, I highlight three more high-priced covered calls on stocks that have had strong rallies.
The new market dynamic is having a profound impact on the portfolio. Several stocks that had been dead weight in the portfolio have soared in recent months to 52-week highs. The new market has turned previously underperforming stocks into strong income generators.
It has been a strong run for several portfolio stocks. But a largely successful earnings season is almost over. That means there will be no obvious catalyst to continue driving stocks higher, at least for now. The situation makes it a better time to capitalize on recent price surges instead of adding more positions and hoping for more.
Under the current circumstances, the biggest market opportunity right now is income. In this issue, I highlight three more high-priced covered calls on stocks that have had strong rallies.
In researching potential candidates for this month’s edition of the newsletter, I narrowed down my final list of top choices to the usual 10 stocks. What caught my attention when reviewing the list, however, was how many of them were in the healthcare sector—in particular, the therapeutic arena.
I was gratified by this discovery since I feel that a.) medical stocks are underrepresented in the portfolio, and b.) the sector is at once defensive in nature (always a good thing in my estimation) yet also poised to benefit from ongoing sector rotation.
I was gratified by this discovery since I feel that a.) medical stocks are underrepresented in the portfolio, and b.) the sector is at once defensive in nature (always a good thing in my estimation) yet also poised to benefit from ongoing sector rotation.
Before we dive into this week’s covered call idea, I need to address two items.
First, we are going to sell our RKT stock as the February call that we sold expired worthless, leaving us with our stock position.
First, we are going to sell our RKT stock as the February call that we sold expired worthless, leaving us with our stock position.
It remains about as mixed an environment as we can remember, which does mean the risk of some sort of convulsion (a correction, a re-rotation into laggards, etc.) is elevated. That said, as opposed to the on-again, off-again action from certain areas in January, we have seen the winners persist of late, so that’s where we’re focusing—while also holding some cash and raising stops along the way given what’s going on. For the moment, we’ll stick with a level 6 on the Market Monitor, but again, we’re OK taking swings at strong stocks.
This week’s list is very heavy on the cyclical side of things, with many names perking up and out of long ranges. Our Top Pick has a solid growth profile and has emerged on the upside after a six-month choppy phase.
This week’s list is very heavy on the cyclical side of things, with many names perking up and out of long ranges. Our Top Pick has a solid growth profile and has emerged on the upside after a six-month choppy phase.
Tariffs rejected. Big shortfall in GDP growth. Possible emerging conflict with Iran. There were enough headlines last week – and really, Friday alone! – to make your head spin. And yet … stocks were mostly calm, with no sudden movements in either direction. As always, the stock charts matter more than the headlines, at least when it comes to investing.
So, let’s stay the course, which this week means adding a well-known stock that continues to thrive in the midst of the ongoing travel resurgence. It was Mike Cintolo’s Top Pick in his Cabot Top Ten Trader momentum-trading advisory last week.
Details inside.
So, let’s stay the course, which this week means adding a well-known stock that continues to thrive in the midst of the ongoing travel resurgence. It was Mike Cintolo’s Top Pick in his Cabot Top Ten Trader momentum-trading advisory last week.
Details inside.
Despite early-week angst over continued AI disruption fears, markets steadied into the weekend as tech found fresh legs and headline risk eased after a key Supreme Court ruling altered the U.S. tariff landscape. The rebound in mega-cap names helped sentiment improve off midweek lows, though small caps lagged. For the week, the S&P 500 rallied 1.1%, the Dow advanced 0.3%, and the Nasdaq led with a gain of 1.5%, while the Russell 2000 was essentially flat.
Despite early-week angst over continued AI disruption fears, markets steadied into the weekend as tech found fresh legs and headline risk eased after a key Supreme Court ruling altered the U.S. tariff landscape. The rebound in mega-cap names helped sentiment improve off midweek lows, though small caps lagged. For the week, the S&P 500 rallied 1.1%, the Dow advanced 0.3%, and the Nasdaq led with a gain of 1.5%, while the Russell 2000 was essentially flat.
It’s not 1999 out there, but the Model Portfolio has been doing OK despite the choppy, challenging, crosscurrent-filled market of late, partially thanks to an interesting dynamic—while the top-down evidence really hasn’t changed much in recent weeks (if anything, it’s probably worsened a bit, especially when it comes to growth funds and our Aggression Index), we are definitely seeing more individual stocks perk up, both within AI and in cyclical areas.
We do have two or three moves we’re close to making—while we’re not eager to be heavily invested given the evidence, we have a lot of cash and are likely to put some to work soon. But, tonight, we’ll stand pat and see if opportunities arise in the next few days—while also seeing if the Nasdaq’s test of its recent low holds. Bottom line, stand pat here, but we’ll be in touch with any changes in the days ahead.
We do have two or three moves we’re close to making—while we’re not eager to be heavily invested given the evidence, we have a lot of cash and are likely to put some to work soon. But, tonight, we’ll stand pat and see if opportunities arise in the next few days—while also seeing if the Nasdaq’s test of its recent low holds. Bottom line, stand pat here, but we’ll be in touch with any changes in the days ahead.
With the market’s rotation into energy, industrial and other “unloved” stocks continuing well into 2026, we’re leaning deeper into the trends.
This month’s issue focuses on yet another specialty industrial player, an under-the-radar biofuel story, and an energy name with exposure to strong, international markets.
As always, the goal is to stay aligned with what’s working.
Enjoy!
This month’s issue focuses on yet another specialty industrial player, an under-the-radar biofuel story, and an energy name with exposure to strong, international markets.
As always, the goal is to stay aligned with what’s working.
Enjoy!
Despite a small bounce Friday on softer inflation data that eased some knee-jerk selling, markets finished on their back foot as renewed investor anxiety around artificial-intelligence disruption rippled through tech and cyclical stocks. Growth names lagged, pressure widened beyond software to financials and real estate, and defensive sectors outperformed amid falling Treasury yields that weren’t enough to stem the slide. By week’s end, the S&P 500 had fallen 1.4%, the Dow Jones had lost 1.2%, and the Nasdaq Composite had tumbled 2.1%.
Updates
It has been called by many pundits the biggest speculative event since the late ‘90s Internet stock mania. I’m referring, of course, to the widely referenced “AI bubble” that has been in play for the better part of the last three years.
But is it truly a “bubble” in the historical sense of the term? The answer to this question is salient for us not only as investors, generally speaking, but also as it concerns at least a couple of the stocks in our portfolio—namely Intel (INTC) and Centuri Holdings (CTRI).
But is it truly a “bubble” in the historical sense of the term? The answer to this question is salient for us not only as investors, generally speaking, but also as it concerns at least a couple of the stocks in our portfolio—namely Intel (INTC) and Centuri Holdings (CTRI).
WHAT TO DO NOW: It’s not 2008 out there, but the market environment remains very challenging, especially for growth, where most indexes, funds and stocks are struggling. That said, we have started to see some growth names emerge on the upside, and our watch list is growing—if we can see more than a day or two of strength, we’d like to put some money to work. But until then, we’re content to stay close to shore and patiently wait for growth stocks to get moving. In the Model Portfolio, we’re placing Axsome Therapeutics (AXSM) on Hold tonight; our cash position is still just above 50%.
It’s been an interesting week here in Rhode Island, where most people are finally dug out from the roughly three feet of snow that fell across the state Sunday night and into Monday.
Growing up in Vermont, major snowstorms were certainly disruptive. But more often than not, it was all about how we would get to the ski resort without going off the road.
Growing up in Vermont, major snowstorms were certainly disruptive. But more often than not, it was all about how we would get to the ski resort without going off the road.
Hello from sunny Florida!
I am on vacation with my family this week, taking a much-needed break from the harsh, snowy Vermont winter (and narrowly making it down here ahead of the latest blizzard to dump another foot or two of snow on the Northeast). But with so much going on in the market – tariffs rejected! GDP growth slowing! AI panic! – I wanted to provide an update on everything that’s going on with our stocks.
I am on vacation with my family this week, taking a much-needed break from the harsh, snowy Vermont winter (and narrowly making it down here ahead of the latest blizzard to dump another foot or two of snow on the Northeast). But with so much going on in the market – tariffs rejected! GDP growth slowing! AI panic! – I wanted to provide an update on everything that’s going on with our stocks.
It’s the same basic market story as it has been for the last four months. Technology is floundering while other sectors are killing it. But a couple of events occurring this week could potentially change the dynamic.
For value-focused investors, this year’s prologue has been a welcome change from the turmoil experienced in early 2025.
In just the past few weeks, some of last year’s most ignored or underappreciated laggards have posted outsized gains, with rallies that have made even momentum-driven tech stock traders envious. Even more remarkable is the fact that much of that strength has been concentrated in ultra-defensive areas of the market like consumer staples, utilities and healthcare.
In just the past few weeks, some of last year’s most ignored or underappreciated laggards have posted outsized gains, with rallies that have made even momentum-driven tech stock traders envious. Even more remarkable is the fact that much of that strength has been concentrated in ultra-defensive areas of the market like consumer staples, utilities and healthcare.
The market rotation continues to be the main story out there this week, though rumblings of a potential strike on Iran, an update from the January FOMC meeting, and a slew of earnings reports and economic data releases have been giving investors plenty to think about.
In terms of the rotation, the equal‑weight S&P 500 ETF (RSP) is up 5.5% so far this year, illustrating that leadership is broadening beyond the narrow group of mega‑cap stocks that drove much of last year’s performance.
Year to date, the S&P 600 SmallCap Index is up 8.3% and the S&P 400 Mid‑Cap Index is up 7.9%. Both are comfortably outperforming the S&P 500, which is up just 0.1%, and the Nasdaq, which is down 2.1%.
In terms of the rotation, the equal‑weight S&P 500 ETF (RSP) is up 5.5% so far this year, illustrating that leadership is broadening beyond the narrow group of mega‑cap stocks that drove much of last year’s performance.
Year to date, the S&P 600 SmallCap Index is up 8.3% and the S&P 400 Mid‑Cap Index is up 7.9%. Both are comfortably outperforming the S&P 500, which is up just 0.1%, and the Nasdaq, which is down 2.1%.
Happy Chinese New Year! The year of the horse is upon us.
China is expecting an incredible 9.5 billion trips to be made during the 40-day Lunar New Year travel period. Chinese automakers are also on the move as the country’s numerous brands sold nearly 200,000 vehicles in Britain last year, doubling their market share to almost 10%.
China is expecting an incredible 9.5 billion trips to be made during the 40-day Lunar New Year travel period. Chinese automakers are also on the move as the country’s numerous brands sold nearly 200,000 vehicles in Britain last year, doubling their market share to almost 10%.
As U.S. investors have shifted from risk-on to risk-off mode in recent months, a clear disparity between the “haves” and the “have-nots” has materialized.
Let’s start with the “have-nots.” Financials have fared the worst so far this year (-4.7%), followed by technology (-3.1%), communication services and consumer discretionary (-2.8% each). The downturn in the two tech-related sectors in particular is a stark departure from recent years, when technology led the charge of the current bull market.
Let’s start with the “have-nots.” Financials have fared the worst so far this year (-4.7%), followed by technology (-3.1%), communication services and consumer discretionary (-2.8% each). The downturn in the two tech-related sectors in particular is a stark departure from recent years, when technology led the charge of the current bull market.
Cyclical stocks are soaring and technology is floundering in the transformed market.
The bull market is turned upside down. For most of the first three years, technology, and particularly AI stocks, soared while most other stocks did very little. Now, previously meandering stocks are killing it while technology sinks.
The bull market is turned upside down. For most of the first three years, technology, and particularly AI stocks, soared while most other stocks did very little. Now, previously meandering stocks are killing it while technology sinks.
Strong fourth-quarter earnings are confirming what the market was already doing.
Current estimates based on earnings reported so far are for 13.2% overall S&P earnings growth for the quarter. It’s a solid quarter and the fifth straight quarter of double-digit earnings growth. In terms of sector performance, cyclical companies are killing it, and technology is floundering, just like before earnings.
Current estimates based on earnings reported so far are for 13.2% overall S&P earnings growth for the quarter. It’s a solid quarter and the fifth straight quarter of double-digit earnings growth. In terms of sector performance, cyclical companies are killing it, and technology is floundering, just like before earnings.
Like many coffee aficionados, I have something of a love/hate relationship with Starbucks (SBUX). My main gripe is that the company’s food and beverage offerings have always been pricey compared to the fare served in most fast-food restaurants and run-of-the-mill coffee houses.
Alerts
Today’s recommendation is an insurance company with a strong chart and shareholder-friendly policies.
American Financial Group (AFG)
from The Buyback Letter
American Financial Group is an insurance holding company based in Cincinnati, Ohio, with assets in excess of $35 billion. Through the operations of Great American Insurance Group, AFG sells property and casualty...
American Financial Group (AFG)
from The Buyback Letter
American Financial Group is an insurance holding company based in Cincinnati, Ohio, with assets in excess of $35 billion. Through the operations of Great American Insurance Group, AFG sells property and casualty...
Capital One Financial (COF)
from Dow Theory Forecasts
Capital One Financial owes its genesis to a pair of management consultants who set out in the 1980s to tailor the credit card to the idiosyncrasies of its user. The plan went beyond identifying consumers who want kittens on their credit cards. Rather, the...
from Dow Theory Forecasts
Capital One Financial owes its genesis to a pair of management consultants who set out in the 1980s to tailor the credit card to the idiosyncrasies of its user. The plan went beyond identifying consumers who want kittens on their credit cards. Rather, the...
Sell
CF Industries (CF)
from Dow Theory Forecasts, recommended at $207 in the August 9, 2012 Daily Alert and in Investment Digest issue 725.
CF Industries is being removed from the Buy and Long-Term Buy lists. The stock looks cheap from nearly every angle in Quadrix but lacks the growth we prefer for...
CF Industries (CF)
from Dow Theory Forecasts, recommended at $207 in the August 9, 2012 Daily Alert and in Investment Digest issue 725.
CF Industries is being removed from the Buy and Long-Term Buy lists. The stock looks cheap from nearly every angle in Quadrix but lacks the growth we prefer for...
Today’s recommendation is an investment management company stock that pays dividends and has good value and growth characteristics.
Invesco (IVZ)
from Argus Weekly Staff Report
We are reaffirming our BUY rating on Focus List selection Invesco Ltd. (IVZ) with a target price of $36. Invesco is among the largest independent investment management firms,...
Invesco (IVZ)
from Argus Weekly Staff Report
We are reaffirming our BUY rating on Focus List selection Invesco Ltd. (IVZ) with a target price of $36. Invesco is among the largest independent investment management firms,...
The September decline so many investors were anticipating hasn’t materialized, but that doesn’t mean all seasonal bets are off. Today, the Stock Trader’s Almanac gurus recommend a seasonal trade on oil prices. The new recommendation is followed by an update on BofI Holding (BOFI).
ProShares UltraShort DJ-UBS Crude Oil (SCO)
from Stock...
ProShares UltraShort DJ-UBS Crude Oil (SCO)
from Stock...
Shares of BofI rallied nearly 6% today, fueled partly on news that the stock will be added to the S&P SmallCap 600 Index. BofI has surged 141% so far in 2013, helping push the bank’s market capitalization up to $923 million. Robust earnings and asset growth and improved credit quality have boosted...
Jacobs Engineering Group posted solid results for its fiscal third quarter ended June 28, 2013. The engineering, procurement and construction outfit generated net income of $108.9 million over this three-month period, up 9% from year-ago levels. Meanwhile, the company’s backlog increased by 10.2%, to $17.2 million.
Highlights from the fiscal third...
Highlights from the fiscal third...
Sell Half
Tulia (TRLA)
from Top Stock Insights, recommended at $30 in the February 14, 2013, Daily Alert and Investment Digest issue 737.
It’s only been 7 months, but we’ve doubled our money with Internet real estate company Trulia.com (TRLA). This is a great little growth story that is being propelled along by...
Tulia (TRLA)
from Top Stock Insights, recommended at $30 in the February 14, 2013, Daily Alert and Investment Digest issue 737.
It’s only been 7 months, but we’ve doubled our money with Internet real estate company Trulia.com (TRLA). This is a great little growth story that is being propelled along by...
Today’s recommendation is an apparel company that designs and distributes apparel under brands including Tommy Bahama, Lilly Pulitzer and Ben Sherman. The stock has good short-term momentum that should appeal to growth investors.
Oxford Industries (OXM)
from Investors Intelligence
Oxford Industries (OXM) is resuming the uptrends off the February lows. Momentum is rising...
Oxford Industries (OXM)
from Investors Intelligence
Oxford Industries (OXM) is resuming the uptrends off the February lows. Momentum is rising...
We project that Alliant will strongly outperform the market over the next 6 to 12 months. This projection is based on our analysis of three key factors that influence common stock performance: earnings strength, relative valuation, and recent price movement.
Alliant...
Alliant...
Today Walter Frank recommends an index-tracking ETF that’s a one-stop way to get exposure to the technology sector and other growth stocks when they’re leading, as they have been so far this year.
Fidelity Nasdaq Composite Index Tracking ETF (ONEQ)
from Moneyletter
We are buying the Fidelity Nasdaq Composite Index Tracking ETF (ONEQ)...
Fidelity Nasdaq Composite Index Tracking ETF (ONEQ)
from Moneyletter
We are buying the Fidelity Nasdaq Composite Index Tracking ETF (ONEQ)...
Avis Budget Group (CAR)
from DividendLab
Avis Budget Group (CAR) does not pay dividends but offers excellent capital appreciation upside with shares projected to deliver about a 5x return over the next five years from $28 currently to $135 by 2018 based on consensus earnings growth estimates of 21.6% annually. Cut that...
from DividendLab
Avis Budget Group (CAR) does not pay dividends but offers excellent capital appreciation upside with shares projected to deliver about a 5x return over the next five years from $28 currently to $135 by 2018 based on consensus earnings growth estimates of 21.6% annually. Cut that...
Portfolios
Strategy
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.