Since 1928, the Santa Claus rally has been positive 79% of the time. For this year, the stock market is shaping up to post the best Santa Claus Rally returns since 2000-2001, when the S&P 500 rose 5.7%.

The term was coined by Yale Hirsch, the founder of the Stock Trader’s Almanac, and one of my contributors to my Wall Street’s Best Digest newsletter. The definition: the markets tend to rise over a stretch of time right before and after the calendar flips to the new year. Specifically, the rally involves the last five trading sessions of the year and the first two of the new year.



And that’s really good news! With the pandemic and the omicron variant still weighing on us, any good news is heartily welcomed! But that’s not all that is glittering this holiday season. Home prices, while still rising, are certainly moderating, which should continue to keep the housing market strong. And, indeed, you can see the strength by the uptick in both existing homes (6.46 million) and new home sales (744,000).



Also, durable goods sales are up, and jobless claims have declined.



I’d say that’s a great start to the new year! We are still bullish, with a dose of caution, so stock picking continues to be of critical importance in growing and maintaining your portfolio.



This month, I’m going with another Real Estate Investment Trust, which pays a hefty dividend to add to your cash flow.



Please let me know if you have any questions; I always look forward to your emails.



Happy Investing!

This week I’m adding American worldwide manufacturing services company Jabil (JBL) to the portfolio.

There have been some positive baby steps since the market’s early-December low, but there remain many yellow flags, too, such as the fact that growth-oriented funds and indexes remain iffy at best. All in all, we’re a smidge more constructive than we were a couple of weeks ago, but we don’t advise making any big commitments until we see more individual names let loose on the upside.

This week’s list is heavier on cyclical names, as those have been holding up (some even advancing) much better than the growth areas of the market. Our Top Pick is a shipping name that’s posting huge numbers and is near new highs.

As we enter the brand-new year, we have a renewed buy signal from our intermediate-term timing indicator, and the best stocks are hitting new highs—including a lot in our portfolio. But one of ours is a true laggard, and will be sold today.




As for the new addition, it’s a hot growth stock favored by Mike Cintolo, which is seeing great growth in the exciting area of networking at the edge of the cloud.




Details inside.

The market remains challenging and divergent, and few growth stocks look ready to start a sustained upmove just yet. But the evidence has slowly improved since the start of the month, including the fact that our Cabot Tides (which have admittedly been on-again, off-again of late) have returned to a bullish stance. We don’t think it’s time for a major buying spree, but we are putting some of our large cash hoard to work by filling out one of our positions and starting a small stake in a new, resilient growth name. Last but not least — all of us here at Cabot wish you and yours a happy, healthy and prosperous New Year.

As we come to the end of a difficult year for marijuana stocks, it’s worth remembering that the best buying opportunities occur when the picture looks gloomiest; perhaps we’re there now, because the stocks look pretty bad, even though the fundamentals of the industry are terrific!





If so, our portfolio is well positioned to benefit, as we own all the leading companies in the industry, as well as a few more conservative peripheral stocks for diversification.





This week’s issue brings one small change, the addition of well-known ScottsMiracle-Gro, which is currently trading 37% off its high.





Full details in the issue.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the January 2022 issue.

This issue includes our Top Five Stocks for 2022, our annual market review and outlook for 2022, as well as our update on the bankruptcy and high-yield bond markets.



Our featured recommendation this month is Brookfield Asset Management Reinsurance Partners Ltd (BAMR). This recent spin-off has received little market attention yet offers considerable long term potential.



We note our recent ratings change that moved shares of GCP Applied Technologies (GCP) to a Sell with a +77% total return.



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.

As we enter the final week of the year, the leading indexes remain strong, while less popular indexes are weaker. Still, there are pockets of strength, including energy stocks, and that’s where we find this week’s recommendation.

As for our current holdings, most look good, but we have two sells today, of long-time holdings which have brought us healthy profits.



Details inside.

Cyclical stocks have been getting clobbered over the past month amidst virus concerns. But I think the recent action is creating an opportunity.

The inflation and Fed contraction issues, which are good for energy and financial stocks, will outlast this latest virus strain. The virus will fade away before too long, but the other problems are much stickier. Certain stocks are being knocked back temporarily ahead of a very promising new year.



In this issue I highlight one of the very best financial stocks on the market. It’s has pulled back recently and is about 15% below the 52-week high, yet the company is poised for a fantastic 2022.

In the December Issue of Cabot Early Opportunities we try to capitalize on the pullback in stocks with the addition of disruptive players in the electric vehicle (EV) and metaverse arenas as well as an up-and-coming apparel/footwear company. We also take a swing at a dinosaur that may finally start to become relevant again following the spin-out of a dying business segment.

This week we are adding Alcoa (AA), which has held up very nicely during the recent market malaise.

First, a scheduling note: With Christmas coming quick, next Monday (December 27) is the second of our two regular weeks off for Top Ten. We’ll be in later that week, but if we don’t talk to you have a great holiday season!

After an encouraging bounce, the sellers immediately came back to the well last week. While we don’t think this is going to morph into 2008, it’s clear that most of the evidence remains negative: The intermediate-term trend of most indexes and stocks is pointed down and the vast majority of former leaders are in shambles. We’ll let others predict (guess) what happens from here, but with most things acting poorly, it’s best to remain cautious, holding plenty of cash, building your watch list and keeping any new buys on the small side.



This week’s list has a variety of names that are resisting the market’s weakness, so if you want to nibble on something, you’ll find it here. Our Top Pick is a unique IoT-related firm whose stock is acting just fine.

As far as the market goes, there’s no doubt this coronavirus has thrown a wrench into things.

The market seems to be a bit complacent given the risks of the virus spreading rapidly in China and elsewhere but we need to remain a bit cautious. There is some suspicion that China is downplaying the numbers.

News of the spread from China of a brand new virus roiled markets earlier this week. Although the market has bounced back somewhat, I don’t think we’re out of the woods yet by a darn sight.

The stock market’s uptrend finally cracked late last week. Is this the beginning of the official market correction, or a prelude, or just a hiccup?

The message this week is to stay invested but don’t go crazy on the buy side and don’t get scared on the sell side. Just be measured and try not to do anything that’s uncharacteristic of what you would do in a “normal” market.

The environment hasn’t changed. It’s a very strong bull trend in the major indexes and most stocks, with our trend-following measures solidly positive.

Here we are in an up leg of a bull market that began three months ago. Since early October the S&P 500 has climbed 14%. With trade issues and Iran out of the headlines, the strong economy and low interest rates are driving stocks higher with technology leading the charge.

The S&P 500 (SPX) index is up 10% since rising above its previous trading range in late November. While 10% is not necessarily a big move for a stock, it is definitely a big move for a major index.

The big thing on most investors’ minds is whether or not this market can go higher.

Major gold stocks still look undervalued relative to gold. We feel the post-panic gold stock upswing has room to go higher.

There’s a new DRIP plan for this bank, which has a current annual dividend yield of 2.01%, paid quarterly.

With a portfolio flush with positions and the market having gotten a little choppy lately we’re going to move incrementally more conservative today.

The major indexes are up as we start a holiday-shortened week, with the Dow up 373 points as of 11:15 am and the Nasdaq up 24 points. But it’s a heavy rotational day, with the broad market up but leading growth stocks getting hit.

The pandemic has boosted the shares of this e-commerce payment processor, and analysts expect triple-digit growth from the company next year.

This medical device company makes unique equipment to treat blood clots.

Five analysts have increased their EPS estimates for this health benefits company in the past 30 days.

This morning, this portfolio stock reported results for the fiscal year ending March 31, 2020.

Here’s a mid-year update on this bank that is a good potential takeover target.

Our second recommendation is a sale of a restaurant company that will be slow to recover from the pandemic.

Hit by the slow economy, our first idea is a mortgage insurer is trading at a discount, and its addition to a visible index should help attract investors.

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.