Last week was an awful one for growth stocks, many of which had already been sitting well off their highs and then were taken apart as the calendar flipped, with 15% to 20% declines seen in some former leaders last week alone. To be fair, some areas actually acted decently—in our screens this week, it wasn’t hard to find good-looking commodity, semiconductor, financial and industrial stocks—and there are names that may be near good entry points. The trick, though, is that the selling appears to be broadening out: Today saw declines across the board (led again by growth stocks), with even resilient areas getting hit. We never catch falling knives, but in the near term, a bounce wouldn’t shock us, as the selling has beenpunishing and has become very obvious. Still, that’s like picking up nickels in front of a bulldozer—a nibble here or there is fine, but there’s not much to like from an intermediate-term perspective, so caution remains the best stance.

This week’s list contains a bunch of commodity and more reliable performers, a sign that big investors continue to favor steadiness and defense rather than aggressive situations. Our Top Pick is a steady performer with a low valuation and a great cash flow outlook.

Last Monday’s dramatic selloff and reversal smelled like a short-term low, but the sellers had other ideas—the bounce from that low lasted just a couple of days before the bears were back at it, with today’s decline further unraveling growth stocks. All in all, we remain in the same cautious stance as we have been for a while: Given the extreme selling in growth and choppiness in many other areas, we think holding a good chunk of cash is paramount; we’re not opposed to a little buying here and there in resilient areas, but we don’t advise playing heavily until the bulls step up to the plate. Our Market Monitor now stands at a level 4.



This week’s list is mostly cyclical and commodity names, all of which are acting or are set up well. Our Top Pick is a Canadian copper and coal play that just lifted from a multi-month rest on big volume.

With the market down big today, it’s possible that the growth stock correction has done enough damage—but until we see real strength, it’s better to adjust to the trend—and that means going with a value stock today—an old technology name that you’ll recognize. As for our current holdings, there is only one change, a downgrade of one stock, Broadcom (AVGO), to hold.

Happy New Year! While COVID continued to wreak havoc in our personal and work lives in 2021, we cannot complain about the markets!

Last year, the Dow Jones Industrial Average rose 18.7%; the S&P 500 climbed 26.9%; and the Nasdaq rose 21.4%. Not bad for an economy that continued to recover from the early stages of the coronavirus.



And the economy continues to strengthen, supported by improvements in manufacturing, housing, and unemployment. The unemployment rate for December dropped to 3.2%, the lowest it has been since February 2020.



We are still living with COVID, and as I wrote in the latest Cabot Money Club magazine, inflation is a concern going forward. Just this past week, long-term mortgage rates rose to 3.4%. While any rise in those rates can cause homeowners some grief, the truth is that is still a pretty low mortgage rate. Consequently, I don’t think a steady rise will the derail housing market.



Keep reading to find out more.

While some major indexes are hanging in there and many cyclical areas look pretty good, growth stocks have suffered another sharp leg down, with many with crash-type declines last week. With that said, there are some rays of light, including a minor new lows divergence, continued buying bursts that usually portend solid long-term results and the fact that some cyclical areas are trying to get going from big consolidations. Monday’s panic selling might be a workable low, but still, we need to see more before putting much money back to work.

Today, we are recommending a special situation. The stock is a closed-end fund that is in the process of transitioning to a real estate investment trust (REIT). Once the transition is complete, the universe of investors that can buy the stock will double, driving indiscriminate buying pressure. Other key points:

• Trades at a 40% discount to NAV.
• High insider ownership (CEO owns 14% of company).
• Relentless insider buying.

All the details are inside this month’s Issue. Enjoy!

The pandemic induced profound changes in the short term and will permanently alter things to at least some degree for a long time. Such change can create great investments.





One industry that is benefitting from the altered world is shipping. Seaborne shipping stocks have had their best year in well over a decade. Shipping rates have soared amidst the rapid recovery and pent-up consumer demand as well as supply chain disruptions that have limited the number of ships available.





These changes should be long lasting for one industry subsector, container shipping. The torrid rise of e-commerce and technological efficiency should permanently increase demand for container shipping at a time when supply is limited and will remain so for a while.





In this issue I highlight a container shipping company that is growing earnings at better than a 100% annual clip, sells at a still cheap valuation, and currently yield 6.7% with a dividend that should continue to rise in the years ahead. The stock could have a lot further to rise in the year ahead.

Does your ETF portfolio look the same this year as it did in 2021, or even for the past five or 10 years?

With this first issue of the Cabot ETF Strategist, you’ll get the essential portfolio allocations to get the year started right. Whether you’re an aggressive, moderate or conservative investor, theres’s a portfolio for you.



Both equities and fixed-income asset classes are getting a slow start to the year. That’s good news for anyone rebalancing or reinvesting their portfolio, as you can buy ETFs at potentially lower valuations.

This week I’m adding an energy stock engaged in hydrocarbon exploration, Marathon Oil (MRO).

Note: Because of the Martin Luther King, Jr., holiday, next week’s issue will be published on Tuesday, January 18.



While the S&P 500 hit a record high just last week, the market is being hit hard today, and thus I have two sell recommendations, AMBA and FND.



But I also have a new recommendation, which has the potential to be a big winner as the world increasingly values what this little company produces.



Details inside.

Happy New Year to everyone - I wish you and your families a healthy and prosperous New Year. As we turn the page to 2022, let’s review some trends before getting to a company with a new device to shake up and lower costs in healthcare at home and around the world.

The market is a bit of a mess, but the selloff has created opportunities to pick up shares in high-growth small- cap names at what seems like extremely attractive prices.





Today’s recommendation is one of those names. It’s a marketplace company that is revolutionizing the outdated industrial manufacturing industry.





While the stock hasn’t been immune to bouts of market volatility it has been far more stable lately than most other high-growth names. It’s up over the last three weeks! And it offers investors exposure to an industry that is seen rebounding in 2022 and 2023.





Enjoy!

Put a little money to work. There are still issues with many growth stocks and plenty of crosscurrents, but the overall market is looking good and we have seen some earnings-induced breakouts.

We’ve been fairly lucky this earnings season in that every single one of our portfolio companies that reported earnings managed to meet or beat the market’s expectations. Of course, that doesn’t mean share prices will rise. Oh heavens no! Short-term movements in stock prices can easily resemble a roulette game. Nevertheless, we buy high quality companies and we give their stocks a chance to enhance our net worth.

Share of our first recommendation, a steel company, were just upgraded at B. Riley to ‘Buy’.

This is a Bulletin for experienced stock investors who like to trade stocks or options over the short-term: a few days or weeks.

Expiration Friday of our April Cabot Profit Booster Positions went largely as expected.

Our Cabot Tides are now positive, which means it’s time to put some money to work.

This insurance company reported mixed results for the quarter, but nine analysts have recently increased 2020 EPS estimates for the company.

Please expect volatility, and that definitely includes periodic large market pullbacks. I’m not just saying that as a standard disclaimer. There’s a certain amount of irrational exuberance that’s taking place now.

Today is the expiration of our April Covered Calls. I don’t anticipate adjusting any of these positions today. Here are my thoughts on each.

Despite the market’s recent declines, this security system company has announced some very good preliminary results for its last quarter.

From top to bottom, the Marijuana Index fell 88% from early 2018 to last month’s market low, and now the recovery has begun.

Then yesterday, I sent out some stock trading ideas, and the dam burst. I heard from at least a dozen investors who are clamoring for specific trading ideas. Great!

This investment management company beat analysts’ earnings estimates by $0.65 last quarter, and four analysts recently raised their EPS forecasts for the company.

This is our first company this quarter to report earnings tomorrow morning before the opening bell.

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.