The beginning of this week is going to be busy as I plan to buy back positions in DKNG, PFE and KO, lock in profits and immediately sell more options premium.

Our other positions are working through their respective expiration cycles using our “income wheel” approach. That being said, we do have one position, WFC September 15, 2023 45 puts, that will most likely close in-the-money at expiration this Friday. If that does occur, no worries, we will be assigned shares of WFC (100 per options contract) and immediately begin the covered call portion of our “income wheel” strategy.

We added another trade to the mix this past week and thankfully, at least so far, both our current trades are in profitable territory. We have the ability to take our SPY iron condor off the table for just over 8% and with 40 days left until expiration, it might not be a bad decision to lock in those profits. As for our IWM iron condor, we are early in the trade, and even though we have a chance to lock in some early profits, those profits are minuscule at the moment, so we will continue to hold in hopes of taking the trade off the table (for profits) over the next two to three weeks. Our total profits are just over 150% and the hope is we can add another 15% to 20% prior to the next expiration cycle.

The market rally in 2023 and recent pullback have left the All-Weather portfolio up a respectable 6.5%, with the Vanguard Total Stock Market ETF (VTI) continuing to do the heavy lifting, up 25.2%.

Nothing has changed from last expiration cycle, both bond funds (TLT and IEF) and the commodity fund (DBC) continue to lag behind, but that is the yin-yang protective nature of the All-Weather portfolio just doing its job. That being said, all of our positions are outperforming their respective ETF benchmarks, once again showing the power of using a poor man’s covered call approach.

Partially aided by declines in mega-cap technology stocks Apple (AAPL) and Nvidia (NVDA), both of which lost 6% last week, the holiday-shortened week was not particularly kind to the bulls as the S&P 500 fell 1.3%, the Dow lost 0.75%, and the Nasdaq declined by 2% last week.

Partially aided by declines in mega-cap technology stocks Apple (AAPL) and Nvidia (NVDA), both of which lost 6% last week, the holiday-shortened week was not particularly kind to the bulls as the S&P 500 fell 1.3%, the Dow lost 0.75%, and the Nasdaq declined by 2% last week.

The market showed some promise in the past couple of weeks, but our indicators never could turn up and now the sellers are back at it, driving the broad market back down. All in all, then, the correction that started in earnest in early August remains in place, so we’re remaining relatively cautious. To be fair, there are some positives, not the least of which is growth stocks, many of which reacted well to earnings last week and a bunch have been resilient of late. That’s not enough to start a buying spree, but it’s another sign that there should be fresh leadership to sink our teeth into whenever the correction finishes up.

In tonight’s issue, we talk about one fundamental transition that three potential leaders are in the midst of, review our Growth Tides and go over a bunch of enticing candidates, be them cyclical or growth stocks.

China’s economy is struggling due to lackluster growth, falling property prices, high local debt, poor demographic trends, and lack of consumer confidence. In some ways, my thought is – join the club. The U.S. may be facing 2% GDP growth and has its own challenges such as excessive federal spending and national debt. My point is that we should remain skeptical but not discount China coming back strong with the right policies. In my view, China is both strong and brittle. And today, we add a high-profile stock that’s a play on China’s strength.

This month we’re jumping into a highly specialized financial services company that helps immigrants send money to friends and families overseas.

You can think of it as the modern version of Western Union (WU). But there’s more to the story than that. Starting with a vision that’s a lot more about helping customers than overcharging them.

The hook is that revenue growth is off the charts. And it’s profitable!

All the details are inside this month’s Issue.

Ahead of the long holiday weekend the market had yet another good week. The S&P 500 gained 1.75%, the Dow rallied 1.5%, and the Nasdaq rose another 1.9%.

This week in an attempt to diversify the portfolio we are adding an energy play.

Following a tough 9% dip in the Nasdaq and 6% haircut in the S&P 500, the market rebounded about as well as the bulls could have hoped--though, with that said, we don’t advise cannon-balling back into the pool per se, as the intermediate-term trend is mostly neutral here, interest rates are still a bugaboo and a lot of stocks still have work to do to repair the damage seen in late July and early August. Simply put, we see the past two weeks as a great first few steps for the market trying to emerge from its correction—but now we need to see continued follow through. We’ll bump our Market Monitor back to a level 6.

After a couple of so-so lists, this week’s crop of stocks is broad and includes many that have shown outsized buying volume of late. There are many enticing choices, but our Top Pick is threatening to break free from its recent launching pad and a giant post-IPO base after another great quarterly report.

Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the September 2023 issue.

We do a deep-dive into what ails Citigroup (C) shares and remain steadfast in our conviction.

Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the 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.

It’s September, which normally spells doom for investors. Even if that’s the case again this month, the “doom” is likely to be short-lived, as new bull markets like the one we saw in the first half of 2023 almost never up and fizzle. Short-term wobbles aside, share prices are likely to be higher by year’s end – perhaps much higher. With that in mind, today we take another dip in the growth pool by adding a favorite of Cabot Growth Investor Chief Analyst Mike Cintolo – a high-tech stock that’s already up more than 50% year to date and yet trades well off its late-2021 peak.

Cryptocurrency markets are rebounding significantly, led by our investments in Ethereum (ETH) and ETH-based projects.

Both Polygon (MATIC) and Ethereum Name Service (ENS) are performing very well.

After a stellar performance in 2020 and a so-so 2021, gold has been one of this year’s biggest disappointments. After a promising rally in the first quarter, gold fell 17% from its March peak of $2,050 an ounce to $1,700 just two weeks ago.

But the decline looks like it may have finally ended in a classic “washout” with small investors running away while market-moving commercial players have lately jumped in as buyers—potentially good news from a contrarian perspective.

This note includes our review of earnings from Dril-Quip (DRQ), General Electric (GE), Holcim (HCMLY), Janus Henderson Group (JHG), Kraft Heinz Company (KHC), Lamb Weston Holdings (LW), M/I Homes (MHO), Newell Brands (NWL), Polaris (PII), Shell plc (SHEL) and Xerox Holdings (XRX).

There were no ratings or price target changes this week.

With this morning’s first read of Q2 GDP coming in at -0.9% and marking the second consecutive quarter of negative growth (Q1 GDP was -1.6%), many are claiming (or soon will claim) the U.S. is in a recession.

As expected, America’s central bank, the Federal Reserve, raised its benchmark interest rate 0.75% for the second straight meeting in an effort to beat down inflation that’s been running at a four-decade high.

Many are dubbing this week the most important of the year in terms of financial and market news. There are a slew of important earnings reports, a Fed meeting and likely rate hike, and the second-quarter GDP report.

Big news can bring great change. Change can bring good things when the current environment stinks. After all, if you live in Siberia, you’re not worried about climate change.

Russia’s decision to cut the oil it exports to Europe again – it’s now down to about 20% of pre-Ukraine invasion levels – is a sign the country wants to force energy prices higher to break opposition to the war. Higher fossil fuel prices are a long-term positive for renewable utility-level energy in Europe and for EVs there and in the U.S. In the sector right now, there are still lots of headwinds, but Greentech is making some progress. The near-term moving averages, the 20-day and 40-day, are now flat and hinting at turning higher, a sign that the bears may be wearing themselves out. Other signals are mixed but increasingly suggest the lows of May could be the bottom of this market.

We are entering the heart of earnings season. So far, the results are unimpressive. The entire retail sector is on alert after Walmart’s pre-announcement about weaker earnings due to their accelerating efforts to offload surplus inventory.

This week, we had a decent amount of news as earnings have started to get under way.

CFTC Commissioner Caroline Pham expressed support for cryptocurrency by criticizing the SEC’s enforcement approach. The following is an important statement, as crypto industry leaders including Sam Bankman Fried are calling for clearer regulatory guidance.

A sudden surge in the U.S. dollar over the past year has bought good and relatively bad news for some firms. With the dollar strengthening, American companies with significant imports have benefitted from cheaper foreign exchange trade. Meanwhile, companies with a more global business are suffering because the strong dollar is affecting their performance.

This title insurance company beat earnings estimates in its most recent quarter, posting EPS of $2.94, compared to the $2.01 estimate. The shares have a current dividend yield of 2.15%, paid quarterly.

Gold is heating up as the Ukraine-Russia situation heats up, and some of the blue-chip senior and mid-tier gold miners are showing conspicuous signs of relative strength. Since mining stocks tend to outperform gold in a precious metals bull market, it’s time to take a closer look at the leading miners.

Cloudflare (NET) reported Q4 results yesterday that surpassed expectations. Revenue was up 54% to $193.6 million while adjusted EPS came in at $0.01. As compared to some other software stocks that have beat expectations, Cloudflare reinvested the surplus cash in growth initiatives, so it didn’t flow to the bottom line.

This medical device maker is expected to grow earnings by more than 30% next year, and is trading at a severe discount. The shares have a current annual dividend yield of 3.07%, paid annually.

One of the many market aphorisms that float around in my head says, “Never sell a dull market short.” It reminds us that in theory, low volume and calm trading ranges such as we’ve seen in the cannabis sector recently tend to signify a balance of buying and selling pressures, and thus a likelihood, particularly after the previous one-year decline, that the dullness will soon be replaced by a new uptrend.

This industrial machinery company will report earnings on March 2. The company is expected to post EPS of $0.62 on revenues of $768.71 million.

The shares of this construction company were just upgraded at RBC Capital to ‘Outperform.’

Cloudflare (NET) reported Q4 results yesterday that surpassed expectations. Revenue was up 54% to $193.6 million while adjusted EPS came in at $0.01. As compared to some other software stocks that have beat expectations, Cloudflare reinvested the surplus cash in growth initiatives, so it didn’t flow to the bottom line.

After the close yesterday, SiTime (SITM) reported Q4 results that handily beat expectations. Revenue of $75.7 million was up 88% and beat by $4.7 million while adjusted EPS of $1.32 was up 207% and beat by $0.23. Gross margins increased 2.5% to 69.4%. The company ended the quarter with $559 million in cash (partially thanks to $460 million raised through equity offerings in 2021) and no debt.

This energy company will report earnings on February 15. Current estimates are for EPS of $1.06 on revenues of 3.59 billion. The shares have a current dividend yield of 5.31%, paid quarterly.

This closed-end fund’s annual dividend yield is 5.77%, paid monthly.

Metal stocks have had a stellar run of late—especially considering the relative weakness of other segments of the broad U.S. equity market. But if experience teaches us any lesson, it’s that when things look great, we should be on our toes and anticipating a possible reversal of fortunes (especially considering the cyclical nature of the industry group).

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.