Issues
The latest issue of Cabot Marijuana Investor is now available, with my current advice on the sixteen stocks in the portfolio.
The gains so far this year, in both the sector and the portfolio, have been absolutely spectacular, but they won’t continue. Already I detect signs of a rolling correction and there’s the possibility that short-term, it could get worse. So in this issue, I have some sell recommendations, for investors who are working to develop maximum gains.
For longer-term, more patient investors, however, doing nothing is fine. The long-term prospects for both the industry and the sector remain bright.
The gains so far this year, in both the sector and the portfolio, have been absolutely spectacular, but they won’t continue. Already I detect signs of a rolling correction and there’s the possibility that short-term, it could get worse. So in this issue, I have some sell recommendations, for investors who are working to develop maximum gains.
For longer-term, more patient investors, however, doing nothing is fine. The long-term prospects for both the industry and the sector remain bright.
In this issue, I identify the bluest of blue chip energy infrastructure stocks at a dirt cheap price with a 6% yield. Business is booming and it is only a matter of time until the market starts rewarding the stock.
All Cabot’s market timing indicators have now flashed green lights, so I continue to recommend that you work to get more invested.
With today’s recommendation, we return to the U.S. with a medical technology stock that addresses a mass market and is growing fast—though it’s not booking profits yet.
With today’s recommendation, we return to the U.S. with a medical technology stock that addresses a mass market and is growing fast—though it’s not booking profits yet.
Current Market OutlookLast week made it nine weeks in a row for most major indexes, and also brought another bullish “blastoff” signal (90% of NYSE stocks rose above their 50-day line), which portends nicely higher prices three to nine months down the road. As for the question on everyone’s mind (when will we get a pullback?), there is a growing chance of a short-term dip, partially due to lots of good news hitting the wires (such as today’s tariff delay). That said, pinpointing short-term moves is a tough game and rarely helps you make good money over time—the key is sticking with the major trend (up) and focusing on leading stocks and proper setups. Overall, we remain open to anything, but just going with the evidence, you should be mostly bullish.
This week’s list has a mix of stocks and sectors, from retail to medical to Internet. A bunch of the names look good, but for our Top Pick, we’ll go with Trade Desk (TTD), which looks like a real leading glamour stock. Try to buy on dips.
| Stock Name | Price | ||
|---|---|---|---|
| Avalara (AVLR) | 102.00 | ||
| Boot Barn (BOOT) | 43.24 | ||
| Dine Brands (DIN) | 93.05 | ||
| Invitae (NVTA) | 32.06 | ||
| iRhythm Technologies (IRTC) | 51.15 | ||
| Match (MTCH) | 0.00 | ||
| SS&C Technologies Holdings, Inc. (SSNC) | 63.56 | ||
| Trade Desk (TTD) | 468.02 | ||
| Wayfair (W) | 167.03 | ||
| Yeti Holdings (YETI) | 42.80 |
We’ve had an up and down week for emerging markets with a big day yesterday followed by weakness today. Our EEM signal stays positive so we are adding a half position today and moving one stock from buy to hold.
With today’s recommendation, I leave the U.S. to return to the fast-growing giant that China has become, with a company that will join Tesla in the fast-growing electric car industry. It’s a low-priced stock, so it’s not for everyone, but it does have enormous growth potential.
Current Market OutlookThe overall action from the major indexes and leading stocks remains about as good as you could hope for considering we’re two months off a major bottom—we’re nudging up our Market Monitor another notch (to 8) in this issue to respect the continued improvement in the overall evidence. That said, after a strong eight-week run, we’re starting to see a bit of greed set in, as well as a bit of rotation, with some left-behind areas (like energy and regional banks) perking up. To be clear, such action is not negative—if anything, it’s probably a good thing—but it could lead to some ups and downs among individual stocks and sectors, especially those that have had good runs. Overall, though, you should continue to put money to work as opportunities arise.
This week’s list is still heavy on growth, though with a couple of new areas popping up, too. Our Top Pick is Chart Industries (GTLS), a little-known name that looks like a great way to play the booming LNG infrastructure area.
| Stock Name | Price | ||
|---|---|---|---|
| Chart Industries (GTLS) | 72.05 | ||
| Chegg (CHGG) | 74.21 | ||
| CyberArk (CYBR) | 111.74 | ||
| Guardant Health (GH) | 88.34 | ||
| Incyte Corporation (INCY) | 76.98 | ||
| iRobot (IRBT) | 103.17 | ||
| Netflix, Inc. (NFLX) | 423.92 | ||
| Okta, Inc. (OKTA) | 148.41 | ||
| Trade Desk (TTD) | 468.02 | ||
| TransDigm (TDG) | 599.41 |
The market remains in good shape, generally shrugging off a stream of bad news by marching higher. Pullbacks are certainly possible, but most investors are positioned cautiously, which is another arrow in the bulls’ quiver when looking down the road.
In tonight’s issue, we’re putting another chunk of money to work by adding two half-sized positions (one in a stock we already own). That will leave us with 25% in cash.
Elsewhere in the issue, we write about a couple of additional positive longer-term signs for the market (one based on money flows, one based on the market itself), look at some new ideas and review all of our Model Portfolio holdings.
In tonight’s issue, we’re putting another chunk of money to work by adding two half-sized positions (one in a stock we already own). That will leave us with 25% in cash.
Elsewhere in the issue, we write about a couple of additional positive longer-term signs for the market (one based on money flows, one based on the market itself), look at some new ideas and review all of our Model Portfolio holdings.
Updates
What a difference a month can make! What an April! The S&P rose 9.6% in April, making it the best single month for the market in six years. It hit an all-time high on Friday.
Sure, the war isn’t over. But the market doesn’t really seem to regard it as a war anymore, more like a blockade situation with the possibility of some skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings. And for good reasons.
Sure, the war isn’t over. But the market doesn’t really seem to regard it as a war anymore, more like a blockade situation with the possibility of some skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings. And for good reasons.
The results are in for the month of April. It was fabulous. The S&P rose 9.6%, making it the best single month for the market in six years. It hit an all-time high on Friday.
Sure, the war isn’t over. But the market doesn’t really seem to regard it as a war anymore, more like a blockade situation with the possibility of minor skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings.
Sure, the war isn’t over. But the market doesn’t really seem to regard it as a war anymore, more like a blockade situation with the possibility of minor skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings.
Now before you call me crazy concerning today’s newsletter headline, hear me out.
Even though large-cap names have garnered more than a fair share of attention among investors this year, I think a case can be made that companies with big capitalizations have a lot more room to run higher before they can be truly regarded as “overbought” or “played out.”
Even though large-cap names have garnered more than a fair share of attention among investors this year, I think a case can be made that companies with big capitalizations have a lot more room to run higher before they can be truly regarded as “overbought” or “played out.”
The market is digesting the push and pull of higher oil prices, a deeply divided Federal Reserve, prospects for a prolonged blockade of the Strait of Hormuz and fading momentum from the AI trade that helped push markets to all‑time highs earlier this month.
Despite the crosscurrents, the overall tone still tilts bullish, supported by investor comfort (for the time being) with the geopolitical tension, resilience in the U.S. economy, and improving visibility into earnings growth over the coming quarters.
Despite the crosscurrents, the overall tone still tilts bullish, supported by investor comfort (for the time being) with the geopolitical tension, resilience in the U.S. economy, and improving visibility into earnings growth over the coming quarters.
Yesterday, four tech giants, Alphabet, Amazon, Meta and Microsoft, representing 22% of the S&P 500’s market value, reported strong quarterly earnings that highlighted the importance of AI.
You might think the above companies and their AI brethren are “asset light” companies but you would be very wrong.
You might think the above companies and their AI brethren are “asset light” companies but you would be very wrong.
It’s been a glorious April following a miserable March for the market. What happens in May may determine which direction stocks are headed for the rest of the year.
That’s probably overstating things a bit, but May should be crucial for the reasons we discussed last week: namely, the fate of the Iran war, but also the bulk of first-quarter earnings season and the introduction of a new Fed chair.
That’s probably overstating things a bit, but May should be crucial for the reasons we discussed last week: namely, the fate of the Iran war, but also the bulk of first-quarter earnings season and the introduction of a new Fed chair.
What war? This market is moving on. We may not be out of the woods yet, but investors are looking beyond the Iran war.
Stocks have already made up all losses from a rough March and then some. The S&P 500 had fallen 7.7% in the month of March by the 30th. Since then, the index has rallied over 13%. The S&P is now at a higher level than before the war began and is hitting new all-time highs.
Stocks have already made up all losses from a rough March and then some. The S&P 500 had fallen 7.7% in the month of March by the 30th. Since then, the index has rallied over 13%. The S&P is now at a higher level than before the war began and is hitting new all-time highs.
The other day I was paid a visit by a roving ISP salesman who was pitching his company’s fledgling internet service over the local monopoly’s. We struck up a conversation and he asked what I did for a living. When I told him, his eyes lit up and he asked, “Got any good stocks you can recommend?”
Without thinking I blurted out, “Anything AI-related. You can’t go wrong.” The advice was only semi-facetious, for there’s undeniably a degree of truth behind it. My instinctive response to that question also prompted me to consider the question: just how long can the broad market continue its “all things AI” run without broader sector participation
Without thinking I blurted out, “Anything AI-related. You can’t go wrong.” The advice was only semi-facetious, for there’s undeniably a degree of truth behind it. My instinctive response to that question also prompted me to consider the question: just how long can the broad market continue its “all things AI” run without broader sector participation
Note: I’m out of town this week, so I’ll be a bit briefer on the update today—but I’m still checking my laptop a couple of times a day if you have any questions or comments. I’ll be back at my desk come Monday. Cheers.
WHAT TO DO NOW: Remain optimistic. The market and some leaders have hesitated, but all of our market timing indicators are bullish, and most stocks we own or are watching are working. Last Friday, we bought a half-sized stake in Nebius (NBIS) and added a 3% additional stake in ProShares S&P 500 Fund (SSO); earlier this week, we sold our small remaining position in GE Aerospace (GE); and tonight, we’ll buy a half-sized position (5% of the portfolio ) in Cava (CAVA). We’ll still have 46% in cash or so after these moves.
WHAT TO DO NOW: Remain optimistic. The market and some leaders have hesitated, but all of our market timing indicators are bullish, and most stocks we own or are watching are working. Last Friday, we bought a half-sized stake in Nebius (NBIS) and added a 3% additional stake in ProShares S&P 500 Fund (SSO); earlier this week, we sold our small remaining position in GE Aerospace (GE); and tonight, we’ll buy a half-sized position (5% of the portfolio ) in Cava (CAVA). We’ll still have 46% in cash or so after these moves.
Despite all the headline noise lately we’re marching deeper into first‑quarter earnings season with the market’s path of least resistance still pointing higher.
Optimism around the extension of the tentative ceasefire in the Middle East has reduced geopolitical anxiety to a seemingly manageable level. The U.S. economy continues to show resilience, and the corporate earnings outlook points toward meaningful growth in the coming quarters and years.
Optimism around the extension of the tentative ceasefire in the Middle East has reduced geopolitical anxiety to a seemingly manageable level. The U.S. economy continues to show resilience, and the corporate earnings outlook points toward meaningful growth in the coming quarters and years.
The old saying, “History doesn’t repeat itself, but it rhymes,” is an apt one for the stock market these last two years.
In early 2025, the S&P 500 raced to new all-time highs before peaking in late January/early February, only to get dragged down in March and April by a geopolitical crisis (tariffs/Liberation Day), before rallying in a V-shaped pattern as the severity of the crisis abated.
In early 2025, the S&P 500 raced to new all-time highs before peaking in late January/early February, only to get dragged down in March and April by a geopolitical crisis (tariffs/Liberation Day), before rallying in a V-shaped pattern as the severity of the crisis abated.
The market turned on the afterburners. The S&P 500 made up all the March losses and catapulted to a brand new high in a remarkably short time. It’s a market that sure looks like it wants to go higher. But stocks are being held back this week by more war uncertainty.
The current ceasefire with Iran expires on Wenesday night. Talks may not happen, and war talk is growing. The resumption of the war will almost certainly prompt a decline in the market. Aside from that near-term threat, investors are clearly looking past this war. Hopefully, it won’t last much longer.
The current ceasefire with Iran expires on Wenesday night. Talks may not happen, and war talk is growing. The resumption of the war will almost certainly prompt a decline in the market. Aside from that near-term threat, investors are clearly looking past this war. Hopefully, it won’t last much longer.
Alerts
Three earning updates - Two Holds and a Sell.
Analysts look for this tech company to grow by triple digits over the next five years.
Two of our stocks reported beat-and-raise quarters.
Our first idea today is a Chinese internet company and our second recommendation is a sale of a previous idea with recent mediocre numbers.
Our second recommendation is a sale of a previous idea with recent mediocre numbers.
Three of our stocks have reached their target price and should be sold. Another of our stocks rose 10% in after-hours trading on Friday as news stories cited merger talks.
A better economy is boosting the prospects of this food company, with analysts forecasting double-digit annual growth for the next five years.
Earnings reports from three of our stocks and ratings changes on two stocks.
This fund has returned 32.28% to its investors so far this year, according to Morningstar.
One of our stocks moves from Buy to Hold, plus earnings reports from four of our stocks.
Our first recommendation is a tool company who is being feted on Wall Street, with upgrades (Zelman, to ‘Buy’, and Morgan Stanley, to ‘Overweight’; earnings beat ($0.12), and 21 analysts raising their earnings forecasts in the past 30 days.
Our second recommendation is a sale of a previous idea.
Portfolios
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.