2021 kicked off with a bang, as investors small and large poured money into marijuana stocks in anticipation of growing legalization, so our portfolio is off to a fine start.

But the threat of a downturn is ever-present, and the longer the bull market runs, the greater my unease.



Still, I can’t argue with the trend, which by all measurements remains up, so I’m keeping the portfolio fully invested. And if you’ve got cash, the softness of recent days is now presenting some buying opportunities!Full details in the issue.



Full details in the issue.

The stock market has been swinging up and down in recent days as investors digest fourth-quarter earnings results and look for the next catalyst to move markets. That said, it’s a good idea to get a bit more defensive with new positions, focusing on established stocks that are less volatile.

Current Market Outlook


It’s usually hardest to keep things simplest, which is why we put our main emphasis on the trends of the major indexes and action of leading stocks—and with both of those still positive, we’re sticking to a generally bullish stance. However, there’s little doubt we’re seeing some late-in-the-advance happenings (heavily-shorted stocks going to the moon, wild rotation intraday among sectors, etc.) and, chart-wise, nearly everything is sticking straight up in the air (the Nasdaq was about 1,100 points above its 50-day line this morning). We never pick tops, but we also prefer not to leave our brains at the door, and there’s little doubt that the risk/reward for most stocks here isn’t great. Thus, we’re willing to give things some wiggle room, but we’re raising stops and being selective on the buy side, focused mostly on entering on dips.

This week’s list has a wide mix of stocks, and most have been either setting up during the past few months or staging initial pullbacks after huge runs. Our Top Pick is Cleveland-Cliffs (CLF), which is finally beginning to pull in after a big run—further dips would be tempting.

Stock Name	Price	Buy Range	Loss Limit
10X Genomics (TXG)	183	175-185	157-162
1Life Healthcare (ONEM)	51	48.5-50.5	42-43
Cleveland-Cliffs (CLF)	17	15.4-16.4	13.5-14
Cronos Group (CRON)	10	9.5-10.2	8.3-8.7
Goldman Sachs Group, Inc. (GS)	283	276-284	248-253
Inseego (INSG)	21	18.5-20	15.5-16.5
Peloton (PTON)	157	152-159	133-137
Schrodinger, Inc. (SDGR)	96	88-92	77-79
Shopify (SHOP)	1206	1170-1220	1050-1080
Unity Software (U)	151	148-153	133-136

The market’s main trend remains up, and thus I continue to recommend that you be heavily invested.

At the same time, it’s important (as ever) to monitor your individual stocks and prune any from your portfolio that no longer deserve to be there. In our portfolio, there are no stocks that fall into that category this week.



But the market is pricey. Stocks are extended. So today’s recommendation is a low-risk dividend-payer with solid growth prospects as the world transitions to a world of clean energy.



Details inside.

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2021 is off to a good start thanks to strong earnings and continued investor enthusiasm for big technology companies and a new administration. The backstop from governments and central banks, as well as the consensus among investors that a strong economic recovery is coming this year, has for now pushed volatility out of the market.

The Explorer portfolio had a good week and today we add another SPAC merging with an established, fast-growing financial payments firm based in the United Kingdom.

Here is your January Wall Street’s Best Digest Top Picks issue 837.

Happy New Year to you all!



I hope your holidays were wonderful. I’m very hopeful for a much healthier New Year for all of us in 2021 and am also very thankful for the performance of the stock markets last year. The biggest winner was technology, with the Nasdaq returning a whopping 45%, followed by 18.4% at the S&P 500, and 9.7% at the Dow Jones Industrial Average.



And I’m thrilled to say, with this Top Picks issue and a calculation of 2020’s Top Picks, that our newsletter contributors really did hit it out of the park—with an average 180.19% return! Our Top 5 picks averaged 252.7%, with the #1 pick, Inovio Pharmaceuticals (INO)—chosen by Joseph Cotton of Cotton’s Technically Speaking—gaining 742.86%! Congratulations to them all!



And the crop of Top Pick recommendations for 2021 also look very attractive.



We begin with Growth stocks from the marijuana, electric vehicle charging, and space and air travel sectors. Our Financial choices include three banks and a jewelry company. In Healthcare, you’ll find a business of cell-based products, an insulin maker, COVID-related biotechs, and a couple of companies focusing on nervous system disorders.



Our Technology ideas come from the social media, search, travel, robotics, and artificial intelligence industries. The Real Estate Investment Trust section includes a marijuana REIT, as well as one that operates in the cell tower business. In High Yield, you’ll find a retail pharmacy and a tobacco company.



In Income, one of our contributors is focusing on Treasury bills instead of equities. And that conservative slant is also seen in our Resources and Energy section, where our advisors chose three gold companies, a pipeline business, and an electric utility. We’ve also included a few Low-Priced Stocks for you, coming from the energy, biotech, and lithium sectors.



Lastly, our Top Picks wrap up with a variety of Funds & ETFs in the income, cybersecurity, robotics/AI, and marijuana industries.



Our final recommendation this month is a non-Top Pick, an alternative energy company.



I’m looking forward to seeing how these Top Picks do this year, as well as bringing you lots more excellent recommendations from our more than 200 contributors. I look forward to hearing of your successes. Please reach out to me at nancy@financialfreedomfederation.com, with any questions and comments.

January was another good month for the Cabot Profit Booster portfolio as we closed our two positions for profits:

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Current Market Outlook


Sellers finally landed a few punches last week, with many tech-related growth stocks finding resistance and the big-cap indexes losing a little ground. Given the big run of late, lots of speculation and signs of greed, we have our antennae up for abnormal weakness—but so far, there hasn’t been much (if any), with the pullbacks in the indexes and individual stocks appearing normal and other timing indicators (number of new lows, etc.) looking fine. In fact, some solid entry points could appear with a bit more weakness! We are seeing continuing rotation into more cyclical areas and out of some growth names, but the trends of just about all indexes and leaders are up, so we remain mostly bullish.

This week’s list has stocks from many different nooks and crannies of the market. Our Top Pick is Guardant Health (GH), from the strong medical area, as it’s come under major accumulation this year. It’s a bit extended so start small and/or aim for dips.

Stock Name	Price	Buy Range	Loss Limit
Cimarex Energy (XEC)	49.1	44.5-47.5	39.5-41.5
Enterprise Products Partners L.P. (EPD)	23.3	22-23.5	19.5-20.5
Farfetch (FTCH)	58.8	56-58.5	51-52.5
Guardant Health (GH)	160.0	152-162	132-137
Halozyme Therapeutics (HALO)	48.3	45-48	40-41.5
Shake Shack (SHAK)	111.7	106-110	91-94
Sonos (SONO)	27.0	25-26.5	22-23
TG Therapeutics, Inc. (TGTX)	50.2	46.5-49.5	41-42.5
The Timken Company (TKR)	85.0	81-85	74-76
Upwork (UPWK)	40.7	37.5-40	33.5-35

The iShares EM Fund (EEM) has firmed up over the last few days, but has yet to actually kick out to the upside. So, while it’s still in the vicinity of its moving averages, we still have a caution signal in force.

There are two portfolio changes in this week’s update.

Even with increased tariff talk and even rockier trading, the markets rebounded strongly Monday. The volatility has increased anxiety, but the consistent bounces are a good sign. In other news, oil prices are bouncing back, interest rates remain subdued, and earnings season begins this week.

We’re still in the midst of a market correction that began in late January. I consider this correction to be perfectly normal, and unrelated to politics, economics, natural disasters or war. In short, the stock market rose for 15 months without resting, and it was overdue to rest. Sometimes things really are that simple.

There are two portfolio changes in this week’s update.

Remain cautious. Our Cabot Tides and Two-Second Indicator remain negative, but the market’s longer-term trend is still up and encouragingly, many stocks are holding support. We think there will be some great opportunities down the road, but until the buyers retake control, it’s best to cut back on new buying and hold a good amount of cash on the sideline.

Markets pulled it together last week, with oversold financial and consumer stocks finding support and delivering gains for the holiday-shortened week. However, the market started this week with another sharp pullback Monday, bringing the Dow and S&P 500 back to their February lows. And markets look set to open lower today after China announced a slew of retaliatory 25% tariffs on U.S. exports. A rebound later this week is likely, but not certain.

As we move forward we’ll look to focus capital on companies with both solid growth profiles and encouraging price charts. One without the other hasn’t been working (and in fact many of these stocks are trending down), so there’s not much incentive to hold underperformers and hope for a quick turnaround.

Our Emerging Markets Timer has turned negative, but its action of the past two months looks more like a trading range than a downtrend. Overall we continue to take things on a stock-by-stock basis; we have several stocks that are teetering on the edge of being kicked out of the portfolio, but we’re inclined to be patient unless a stock’s decline forces our hand.

U.S. stock markets continue to work their way through the 2018 stock market correction. It’s not a bear market—it’s just a correction. And fortunately, the correction did not arrive due to a bearish economic situation, war or a California earthquake. The market simply rose too far, too fast without resting in 2017. As such, most stocks are down from very recent highs while the market digests that gourmet dinner.

Unless you’re a brand new subscriber to Cabot Undervalued Stocks Advisor, you’re aware that as we entered 2018, I had been advising investors to raise cash so that they could buy low during the yet-to-occur-but-overdue stock market correction. There was nothing amiss with U.S. stocks, in my estimation, other than that the markets rose continuously since the November 2016 general election.

Most of the stocks in our portfolio that are holding up well (and in many cases moving higher) are either rated buy or hold, and those that aren’t have already been sold, or are rated hold, and being watched extremely closely.

Oil prices and shares of oil-related stocks surged this morning after a terrorist attack on Saudi Arabian oil fields shut down about half of Saudi Arabia’s daily oil output.

We provide the top five holdings in this fund.

Earnings estimates are moving up for this alcohol beverage company.

One major factor in investing, particularly in small stocks and young sectors where growing pains are still the norm, is sentiment. Good sentiment can take a sector to extreme highs—as it has done for the marijuana sector at every major legalization milepost.

One of our portfolio stocks moves is being retired and there is news on five more.

This global insurance company beat analysts’ EPS estimates by $0.04 last quarter.

This energy company has absorbed its most recent acquisition and is posting significant cash flow, yet the shares remain undervalued.

The major indexes were mixed today, with the Dow up 74 points and the Nasdaq losing three points. But the story once again was weakness under the surface, as growth stocks remained under the gun.

This P&C and energy services company beat EPS estimates by, $0.03 last quarter.

We’re making some portfolio adjustments today.

The major indexes are tilted to the upside to start the week—however, under the surface, we’re continuing to see increasing selling pressure on most growth stocks.

This building materials company recently announced a new acquisition—Heritage One Door & Carpentry.

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.