Issues
Gold hit $4,000 an ounce and the signal this is sending is not hard to grasp.
Investors are enjoying stock gains but are hedging downside currency and stock price risk as well as a hedge on growing government debt and geopolitical risk. Gold seems the most popular safe haven as it is viewed as a safe harbor asset in a way that the greenback used to be viewed. Gold’s rally began almost three years ago, fueled by central banks and Chinese investors leery of both its stock and property markets.
Investors are enjoying stock gains but are hedging downside currency and stock price risk as well as a hedge on growing government debt and geopolitical risk. Gold seems the most popular safe haven as it is viewed as a safe harbor asset in a way that the greenback used to be viewed. Gold’s rally began almost three years ago, fueled by central banks and Chinese investors leery of both its stock and property markets.
After spending most of the summer making a series of new highs, it’s been more of the same so far this fall.
The drawback is that the market is high-priced. Technology stocks, driven by the AI catalyst, have driven stocks higher. But certain sectors have not had a great year. Despite the impressive performance of the overall market over the last few years, there are still bargains to be found.
The real estate sector struggled during inflation and rising interest rates and has been the worst-performing sector over the last five years. Healthcare has floundered all year because of uncertainty regarding tariffs and new pricing policies from Washington. It has been the second-worst-performing market sector over the last year.
But things are turning around in both beleaguered sectors. The Fed started cutting the fed funds rate again in September and two more cuts are expected this year. The long-anticipated issues in the healthcare industry have revealed themselves. And it doesn’t seem nearly as bad as feared. As a result, healthcare stocks had the strongest weekly rally in more than 20 years.
In this issue, I highlight a REIT that specializes in healthcare properties. It has a stellar track record of performance and has among the fastest earnings growth among REITs. It also pays a strong dividend yield and will likely benefit in the months ahead from a rally in either sector.
The drawback is that the market is high-priced. Technology stocks, driven by the AI catalyst, have driven stocks higher. But certain sectors have not had a great year. Despite the impressive performance of the overall market over the last few years, there are still bargains to be found.
The real estate sector struggled during inflation and rising interest rates and has been the worst-performing sector over the last five years. Healthcare has floundered all year because of uncertainty regarding tariffs and new pricing policies from Washington. It has been the second-worst-performing market sector over the last year.
But things are turning around in both beleaguered sectors. The Fed started cutting the fed funds rate again in September and two more cuts are expected this year. The long-anticipated issues in the healthcare industry have revealed themselves. And it doesn’t seem nearly as bad as feared. As a result, healthcare stocks had the strongest weekly rally in more than 20 years.
In this issue, I highlight a REIT that specializes in healthcare properties. It has a stellar track record of performance and has among the fastest earnings growth among REITs. It also pays a strong dividend yield and will likely benefit in the months ahead from a rally in either sector.
Despite the worries surrounding the government shutdown, the market continued its winning ways last week as the S&P 500 and Dow both rallied 1.1%, and the Nasdaq added 1.3%.
The market’s uptrend continues, but as has been the case for many weeks, it’s somewhat tricky out there, with news-driven moves, selling on strength, the occasional bout of rotation and potholes—all while large swaths of the market are doing a lot more chopping than trending. That’s not “bad,” per se, but it remains a selective environment: We continue to take things on a stock-by-stock basis, focusing on strong names that are ideally fresher in their uptrends, while also being active with portfolio management. We’ll again leave our Market Monitor at a level 7.
This week’s list again has a heavy growth component, and not all are in the AI realm, which we find encouraging. Our Top Pick is a blue chip e-commerce name that, after a couple of false starts, looks like it’s ready to move.
This week’s list again has a heavy growth component, and not all are in the AI realm, which we find encouraging. Our Top Pick is a blue chip e-commerce name that, after a couple of false starts, looks like it’s ready to move.
Stocks keep reaching new heights, as last week’s concerns about the market starting to show cracks under the surface seem to have been overblown, at least in the near term. Third-quarter earnings season gets underway next week, and expectations are high again, with economists expecting 8% growth. Companies may have to exceed those lofty expectations to keep this rally going. For now, though, the market is rolling.
To account for some possible bumpiness ahead, however, today I’m adding a big-name value stock to our portfolio. It’s one that I recommended to my Cabot Value Investor audience last month, and it’s already off to a fast start. It’s a company that thrives when the global economy is sound – which it is, despite myriad fears to the contrary.
Details inside.
To account for some possible bumpiness ahead, however, today I’m adding a big-name value stock to our portfolio. It’s one that I recommended to my Cabot Value Investor audience last month, and it’s already off to a fast start. It’s a company that thrives when the global economy is sound – which it is, despite myriad fears to the contrary.
Details inside.
Despite the worries surrounding the government shutdown the market continued its winning ways last week as the S&P 500 and Dow both rallied 1.1%, and the Nasdaq added 1.3%.
Despite the worries surrounding the government shutdown the market continued its winning ways last week as the S&P 500 and Dow both rallied 1.1%, and the Nasdaq added 1.3%.
Remember fintech? It was one of the biggest buzzwords on Wall Street a couple years ago until AI came in and gobbled up all investors’ attention. But the nascent sector never stopped growing, and now share prices are well below their apex as investors have largely ignored the sector the last couple years. In fact, this month’s new fintech addition to the Cabot Value Investor portfolio has almost never been cheaper since coming public in 2020. And yet, the company is still expanding both sales and earnings by more than 25% annually.
It’s a classic growth-at-value-prices story. And we think it has 45% upside in the short-to-intermediate term. Details inside.
It’s a classic growth-at-value-prices story. And we think it has 45% upside in the short-to-intermediate term. Details inside.
The market remains mostly in the same position it has been, with the big-cap indexes trending nicely higher and, based on historical studies, the outlook for the indexes very bullish looking out 3 to 12 months. That said, the broad market is borderline iffy (our Two-Second Indicator is negative) and the chop factor is still with us for growth stocks, so we’re still not cannon-balling into the pool ... though we do see many setups (as so many stocks have marked time for the past 1 to 3 months) out there. Tonight we’re adding another new half-sized position but are still holding about one-third in cash as the next couple of weeks will be telling.
Today we’re wading into the sports betting market, which is evolving into a duopoly where two players hold most of the data that provides a vast network of sportsbooks access to the world’s biggest sporting events.
There is, however, more to the story than just placing a wager on your favorite team.
The October Issue of Cabot Small-Cap Confidential explains it all, and which of these global tech companies we’re teaming up with.
There is, however, more to the story than just placing a wager on your favorite team.
The October Issue of Cabot Small-Cap Confidential explains it all, and which of these global tech companies we’re teaming up with.
The story of last week was under-the-surface weakness in growth stocks, while money rotated into “everything else.” And by week’s end the S&P 500 had lost 0.3%, the Dow fell 0.1%, and the Nasdaq declined by 0.7%.
The market is still in fine overall shape, but under the hood, it’s becoming more and more of a mixed situation. To be clear, there remains a lot more good than bad when examining the evidence, but for the here and now, we advise simply taking things on a stock-by-stock basis—holding your strong performers (albeit also raising stops and potentially booking a partial profit here or there), while cutting bait with those that lag or crack support and keeping some powder dry. We’ll again leave our Market Monitor at a level 7—we’ve had good success finding winners but don’t advise flooring the accelerator at this point.
This week’s list is growth-ier despite some potholes seen last week, which is a plus. For our Top Pick, we’re going with a blue chip in the AI theme, with its recent post-earnings pullback setting up an opportunity.
This week’s list is growth-ier despite some potholes seen last week, which is a plus. For our Top Pick, we’re going with a blue chip in the AI theme, with its recent post-earnings pullback setting up an opportunity.
Updates
The S&P 600 Small Cap Index rallied back to its March 25 levels early this week following weekend talks between China and the U.S. in Geneva, Switzerland. Those talks led to a 90-day ceasefire in the insane trade war between the two countries.
The latest news on trade is also positive, with supposed progress on talks between the U.S. and India, Korea and the EU. The market is a lot happier now that President Trump appears to be working to generate trade deals rather than destroy them.
The latest news on trade is also positive, with supposed progress on talks between the U.S. and India, Korea and the EU. The market is a lot happier now that President Trump appears to be working to generate trade deals rather than destroy them.
As the United States and China reached a 90-day trade conflict ceasefire, markets have responded positively though the deal is not binding and lacks much detail. The S&P 500 edged into positive territory for 2025. A number of Explorer stocks are having very good years.
Stocks are back in business!
Yes, a little more than a month after some of the worst investor sentiment readings in years, soaring volatility, and a 19% decline in the S&P 500 – not to mention both the Nasdaq and the Russell 2000 swinging to bear market territory – stocks are suddenly on a roll, recession fears are abating, and, perhaps most importantly, tariff deals have been struck. The 90-day pause on most reciprocal tariffs initiated by President Trump on April 9 – one week after the deeply unpopular “Liberation Day” was announced – triggered one of the biggest one-day rallies in stock market history. Indexes flirted with their early-April lows two weeks later but eventually stabilized, and May has brought a wave of positive tariff news – first, a deal with the United Kingdom, in which key imports like cars were reduced to 10% and steel and aluminum tariffs were eliminated; then, last weekend came a 90-day truce with China. That sent stocks soaring more than 3% on Monday, and they haven’t looked back.
Yes, a little more than a month after some of the worst investor sentiment readings in years, soaring volatility, and a 19% decline in the S&P 500 – not to mention both the Nasdaq and the Russell 2000 swinging to bear market territory – stocks are suddenly on a roll, recession fears are abating, and, perhaps most importantly, tariff deals have been struck. The 90-day pause on most reciprocal tariffs initiated by President Trump on April 9 – one week after the deeply unpopular “Liberation Day” was announced – triggered one of the biggest one-day rallies in stock market history. Indexes flirted with their early-April lows two weeks later but eventually stabilized, and May has brought a wave of positive tariff news – first, a deal with the United Kingdom, in which key imports like cars were reduced to 10% and steel and aluminum tariffs were eliminated; then, last weekend came a 90-day truce with China. That sent stocks soaring more than 3% on Monday, and they haven’t looked back.
It’s cannabis company earnings season once again. Below, I summarize the highlights from our portfolio companies. But first, here are the major sector trends that emerged from the calls.
The market is booming. The worst appears to be over, and sustained upside from here is entirely possible.
The S&P 500 closed on Friday up about 17% over the last month. The index also moved to within 8% of the all-time high. And that was before the huge rally on Monday.
The Trump administration announced huge progress with China in trade talks over the weekend. The two sides reportedly agreed to a 90-day pause on tariffs, with duties set to drop 115% on both sides by Wednesday. President Trump and the Chinese president are likely to talk in the coming days. This follows the announcement of a comprehensive deal with the U.K. last week.
The S&P 500 closed on Friday up about 17% over the last month. The index also moved to within 8% of the all-time high. And that was before the huge rally on Monday.
The Trump administration announced huge progress with China in trade talks over the weekend. The two sides reportedly agreed to a 90-day pause on tariffs, with duties set to drop 115% on both sides by Wednesday. President Trump and the Chinese president are likely to talk in the coming days. This follows the announcement of a comprehensive deal with the U.K. last week.
In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Berkshire Hathaway (BRK.B), Intel (INTC), Pan American Silver (PAAS), Sirius XM Holdings (SIRI) and SLB Ltd. (SLB).
Consensus assumptions for the energy sector this year are mostly bearish, but several factors argue in favor of a contrarian bullish view.
Consensus assumptions for the energy sector this year are mostly bearish, but several factors argue in favor of a contrarian bullish view.
WHAT TO DO NOW: From a top-down perspective, there’s plenty of good news from the secondary evidence and our Cabot Tides is very likely to turn positive tomorrow, which is another good sign. That said, individual stocks remain very tricky, with lots of selling on strength and poor earnings reactions among names we own or have been watching—that’s not a reason to be bearish, but we advise going slow until we see more real breakouts. In the Model Portfolio tonight, we’re jettisoning our small stake in Argenx (ARGX), which has fallen apart this week pre- and post-earnings, but we’ll add two new half-sized positions: Halozyme (HALO) and GE Aerospace (GE). That will leave us with around 70% in cash—we’d like to put more cash to work but will wait for names to emerge instead of forcing the issue.
Despite the Federal Reserve’s decision to sit tight on interest rates yesterday and rising concerns about upside inflation risk in the mid-term, the broad market continues to act well on hopes of tariff de-escalation.
So far, those hopes are well-founded.
So far, those hopes are well-founded.
Warren Buffett isn’t concerned about the market’s slow start this year. “What’s happened in the last 30, 45 days is really nothing,” the Oracle of Omaha said at Berkshire Hathaway’s annual shareholder meeting last weekend. In the grand scheme of market history, he’s right.
The market just had a big leg higher. Last Friday the S&P 500 concluded an epic nine-day run of positive gains, the longest such streak in more than 20 years. The index rose by more than 10% during the streak. What’s going on?
Things are certainly looking up in the market. The S&P 500 had an epic nine-day run of positive gains, the longest such streak in more than twenty years. The index rose over 10% during the streak. What’s going on?
The rally began after President Trump indicated a de-escalation of the trade war with China. There are ongoing negotiations with the other trading partners during the 90-day pause initiated on April 9th. A perception is building that the worst of the tariff uncertainty is behind. Stocks also got a boost from earnings and economic news.
The rally began after President Trump indicated a de-escalation of the trade war with China. There are ongoing negotiations with the other trading partners during the 90-day pause initiated on April 9th. A perception is building that the worst of the tariff uncertainty is behind. Stocks also got a boost from earnings and economic news.
In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Berkshire Hathaway (BRKB), Intel (INTC), Kenvue (KVUE), Pan American Silver (PAAS) and SLB Ltd. (SLB).
Alerts
WHAT TO DO NOW: The market is acting powerfully since Tuesday’s election, and we’re seeing some outsized moves on earnings this week. We’ll have our full update of Growth Investor tonight, but this bulletin concerns AppLovin (APP), which is skyrocketing this morning after earnings, and of course, this comes after a big run. We’re going to lean against the wind here and take some partial profits, selling one-third of our position and holding the rest. Again, more color tonight.
Trump Victory May Spell Higher Costs for SharkNinja (SN); Lock in Gain; Sell UL Solutions (ULS)
UL Solutions (ULS) Reports; HubSpot (HUBS): Sell for Quick Gain
Varonis (VRNS) Moves to Sell. MSFT, FTAI, AAPL, SN up next.
Shares of our silicon battery startup Enovix (ENVX) are trading up nicely today after the company reported Q3 results after the close yesterday. Lots to cover here so I’ll bullet point the most relevant stuff then give my two cents:
Portfolios
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Quant Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Quant Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
Strategy
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.