The market still has many of the same issues that have been hanging around for weeks, including an extreme narrowness, with the vast majority of the market struggling while mega-cap indexes do pretty well. Even so, we do think the evidence has taken a step in the right direction -- the AI boomlet is a positive sign, and many non-AI leaders acted well in May and have rested normally since. We’re not flooring the accelerator, but given our monstrous cash position, we’re dropping a couple more lines in the water tonight, adding two half-sized stakes in old favorites.

Elsewhere in tonight’s issue, we give our thoughts (and some ideas) within the AI advance, write about a long-term growth area that could be re-emerging and, as always, go over our stocks, an expanded watch list and some other new ideas to chew on.

It was another good week for Explorer recommendations led by ChargePoint (CHPT), up 17%, and Butterfly (BFLY), up another 8%.


Some of you will remember when George Gilder’s Wealth and Poverty hit the market in 1981 like a thunderclap. It was intellectual capital and political firepower for both the Reagan Revolution and a big bull market.



Mr. Gilder has been active ever since and has a new book out that I highly recommend, Life After Capitalism.

Now that Florida Gov. Ron DeSantis (R) is officially in the race for the Republican presidential nomination, it’s worth knowing more about his views on cannabis policy.


After all, DeSantis will now play an even bigger part in the election debates, even if polls say DeSantis has a slim chance against frontrunner Donald Trump. His voice matters – since cannabis is such a politically driven sector.



The bottom line: DeSantis offers a mixed picture, but it’s not all bad for cannabis investors.

Despite a couple concerning days to start the week, the bulls took control on Thursday and Friday as tech titan Nvidia’s (NVDA) earnings blowout triggered a “risk-on” bull run.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the June 2023 issue.

It’s no secret that a fresh fascination with artificial intelligence has ignited shares of companies like Alphabet (GOOG), Microsoft (MSFT) and Nvidia (NVDA), while “safety stocks” like Apple (AAPL) have rebounded on recession fears. Shares of more prosaic technology companies have lagged, but a few offer highly relevant albeit slow-growth products and services, making their businesses highly resilient. They are often well-supported by durable balance sheets and capable management. We highlight four such companies.

As a follow-up to our April edition that featured banks, we have found additional interesting financial stocks by looking at the 13F filings of like-minded value investors. We discuss three that saw sizeable new purchases or meaningful additions to already-sizeable holdings by well-respected value managers.

Our feature recommendation this month is Tyson Foods (TSN), a major producer of chicken, beef and pork products. Its earnings and shares have tumbled due to an unusual simultaneous downturn in all three protein groups. The hardest time to buy a commodity cyclical is at the bottom of the cycle, as there appears to be no end in sight to the malaise. We think this is the time to buy Tyson.

For the first time in a while we started to see big investors floor the accelerator last week, with some names really letting loose on the upside. Moreover, even the “non-AI” nascent leaders that perked up earlier in May are acting fine, with most digesting gains in normal fashion. All of that is to the good—though the top-down flaws that we’ve written about are all still out there, too, with relatively few stocks hitting new highs, a good number of blowups each week and most areas of the market still struggling. Right now, we’re keeping our Market Monitor at a level 5, but we’re watching things closely—if more leaders emerge, it would certainly add to the bullish side of the ledger.

This week’s list has a bunch of solid growth and earnings-related plays from a variety of industries. Our Top Pick is practically a blue chip name from the software field that’s emerging from a solid launching pad.

A debt ceiling deal appears imminent, though that’s ultimately up to our ever-dysfunctional Congress. If it does get done, another Fed interest rate hike may be right behind it. So, the long-awaited rally may be on hold a while longer. But that doesn’t mean individual stocks (see artificial intelligence and semiconductors) can’t get a move-on, so today we add a small-cap MedTech stock that’s showing a lot of promise in addressing a very common – and thus very lucrative – health problem. It’s a new recommendation from Cabot Early Opportunities Chief Analyst Tyler Laundon.

We decided to take off our SPY June 16, 2023 430/435 bear call spread for a nice profit last week which marked 29 out of 33 winning trades since we started Quant Trader exactly one year ago. Moreover, our total return is now hovering around its highest point at 150%.

After locking in 10.8% in Wells Fargo (WFC) at the May 19, 2023, expiration cycle, we decided to sell more puts in WFC during the middle of last week. Since we are early in the trade in WFC, and thus there’s not much to discuss, there will be no comments on the current status of the trade below. Our total return since initiating the Income Trader service just under one year ago stands at 90.8%.

With earnings season behind and few earnings announcements scheduled for the week ahead, the only announcement worth a look this week is Lululemon (LULU). Even so, I wouldn’t be surprised to see no trades this week. This does not mean that we will not have a trade alert or two as we move into the earnings doldrums for the next several weeks.

Despite a couple concerning days to start the week, the bulls took control on Thursday and Friday as tech titan Nvidia’s (NVDA) earnings blowout triggered a “risk-on” bull run.

Despite a couple concerning days to start the week, the bulls took control on Thursday and Friday as tech titan Nvidia’s (NVDA) earnings blowout triggered a “risk-on” bull run.

The market is finally enjoying a rally today, with the major indexes up after a few positive earnings reports. As of 2:45 ET, the Dow was up 644 points and the Nasdaq was rallying 400 points.

It’s hard to put a positive spin on the market’s action over the last week. The bottom line is investor sentiment is the pits and most stocks have been sliding. We owe Microsoft (MSFT) a debt of gratitude for stepping up with a good report and showing that things aren’t actually as bad in tech land as everybody seems to think!

It’s the heart of earnings season. More than a third of all S&P 500 companies report this week. Can the earnings barrage save this market?

The market could sure use some help. It just got hit with more bad news when it was already teetering. The market was see-sawing between generally positive earnings in a still strong economy and the specter of an aggressive Fed seriously slowing the economy over the rest of the year. Then it got hit with news of Covid spreading in China and likely slower growth in that country and globally.

The market is bearish and nearly every subsector within it is too – only real estate is above its primary moving averages among the S&P 500 sectors. There are a lot of warning signs around, with weakness broad among all stocks – only about a quarter of equities are trading over their 50-day moving average and less than 30% are over their 200-day. It’s time to be cautious and be prepared to cut losses and preserve capital.

The market isn’t much fun these days with the S&P 500 down ~10%. And unfortunately, it’s probably not going to get much better in the near term.

Earnings updates from three recommended companies as well as comments on other recommended stocks.

In the market today, how many companies can you confidently say you are comfortable owning for the next 25 years?

Those names are on a short list. Companies that come to mind include Apple, Google, Tesla, and Amazon.



According to studies performed by Wharton, the average tenure of a company in the S&P 500 is 21 years, compared to 36 years in 1965. This means stock picking is an art and companies often have an expiration date.

This week, we’re giving you a trade alert for the Undiscovered portfolio, which, as we’ve noted, trades more frequently than the strategic allocations.

We included comments on earnings from one recommended company, news about other recommended stocks, and a possible delay in the publishing of the May edition of the Cabot Turnaround Letter. We move one of our recommendations to Sell as its share price has surpassed our price target.

It’s been another week of choppy trading action as more earnings reports pour in. We received a solid earnings report from Silvergate Capital (SI), and that stock has perked up.

Markets searching for direction received a boost yesterday as Tesla left earnings estimates in the dust. Quarterly profit was $3.3 billion on revenue of $18.8 billion. Despite the shutdown in China, Elon Musk said the company likely would produce more than 1.5 million vehicles in 2022, up 60% over last year.

Earnings are saving this floundering market. The market was turning south again after a big rebound. But a promising earnings season stopped the slide.

It’s still early. But it appears that earnings will once again exceed expectations. That’s big. Not only are earnings what it’s all about. But it reminds investors that this economy is still strong, and much stronger than the current headlines indicate.

It’s time for a seasonal copper trade, and this ETF is a good entry point for the metal.

With today’s 9% intra-day price drop following a disappointing near-term outlook, Cisco (CSCO) shares look more attractive and we would buy/add to positions here, as the long-term fundamental picture remains healthy.

The November expiration cycle was a great month for the Cabot Profit Booster portfolio as we will have three positions expire for full profits (IGT, BLDR, DDOG), while one is at a profit though it may not reach its peak potential (MRO). More on that below

This Virginia utility beat analysts’ earnings estimates by $0.07 last quarter. The shares have a current dividend yield of 2.41%, paid quarterly.

Shares of DLocal (DLO) are getting hammered today (-20%, roughly) after the company released formal Q3 results. Recall, preliminary results were released in October at the time of the secondary offering (priced at 52.25, versus stock at roughly 37 mid-day today).

A Republican representative has proposed new legislation to deschedule cannabis (making it less restrictive), which has given the cannabis stocks some momentum.

We’re up 160% on our Excelsior portfolio’s Navitas Semiconductor warrants (NVTS.WS) today. At a recent price of 6.70, the warrants are trading for more than their maximum fair value and we recommend selling most of the position today.

A Republican representative has proposed new legislation to deschedule cannabis (making it less restrictive), which has given the cannabis stocks some momentum.

The major indexes are starting off the week on a decent note—as of 10:15 am EST, the Dow is up 74 points and the Nasdaq is up 3 points. But growth stocks are lagging, and some names are cracking near term.

Analysts expect this cable company to grow its earnings at a 37.09% annually, over the next five years.

I’ve decided to cut bait with Accolade (ACCD) since the stock just dribbled below its October low. This is another case where a healthcare tech stock just can’t seem to maintain enough momentum to keep investors engaged, despite the relatively steady financial performance and seemingly bright future.

SELL: AVTR and TIXT. Moving to HOLD: APP

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 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.