Heading into the last month of the year, the prospects for the market remain very good, with a plethora of technical indicators telling us the market will be higher in the years ahead, and thus I continue to recommend that you be heavily invested.

Forget tariffs, forget trade negotiations, forget politics, and forget all the “problems” of the outside world. Just hold a portfolio of carefully selected high-potential stocks, and all will be well.

Today’s recommendation is a fast-growing company that’s a major participant in the 5G communications revolution.

Details in the issue.

This week’s pick has one of our favorite growth stories in the market.

While our focus is on long-term business fundamentals and underlying valuations, even we can be tempted to briefly set this aside for shorter-term bargains. And this time of year these bargains can appear, driven by artificial selling pressure.

In this issue, we look at six stocks that are promising candidates for a bounce.

The cannabis sector remains in a correction, with Canadian stocks in particular still struggling—even as Cannabis 2.0 promises new retail opportunities. But the fundamentals of the industry remain bright, and investors are now beginning to discriminate between the winners and the losers—with the best stocks showing substantial increases in buying volume recently.

The portfolio remains more than a third in cash, waiting for the sector’s main trend to turn up, and there are just two small adjustments today. The portfolio will sell half its position in Cresco Labs (CRLBF) and double its position in Innovative Industrial Properties (IIPR).



Full details in the issue.

The world is about to change in a major way. So much so that you may look back ten years or even five years from now and realize how profoundly different things are since 2019.

The rapidly advancing rollout of 5G will be a technological tipping point that crosses a threshold into the digital age where everything is connected to the internet. Today, only a few things are connected. In a few years, the whole world will be computerized.



5G is such a game changer that many companies and governments can’t afford to be left behind. The current Administration has labeled 5G a national security priority. It seems 5G is the news arms race.



Those are the stakes. And it’s coming fast. In this issue, I identify a company that is at the epicenter of the 5G rollout. It holds vital technology that is light years above the competition and is necessary to connect any device to 5G. Earnings and revenues should skyrocket as the rollout proceeds in haste.

Current Market Outlook


The market finally hesitated a bit last week, and going through our weekend research, we did spot more leading names that had pulled back during the past five to 10 trading days. But as has been the case since the early-October lows, that weakness was tame (most dips were calm and controlled), with today’s burst of buying pushing many back up. (Encouragingly, even the lagging small-cap indexes are now trying to break out of multi-month ranges.) There’s still some shorter-term yellow flags, so we wouldn’t throw caution to the wind here (don’t forget to take some partial profits!), especially if you’ve put a bunch of money to work in recent weeks. But the fact that most stocks and indexes haven’t been able to retreat much despite those yellow flags is yet another stone in the bullish wall. We remain bullish.

This week’s list includes a broad mix of names, from old winners coming back to life to new names perking up to recently strong performers that have eased to good entry points. Our Top Pick is Axon Enterprise (AAXN), which has come back to life after a year-long rest. Start small and go from there.

Stock Name	Price	Buy Range	Loss Limit
Alnylam Pharmaceuticals (ALNY)	143.58	107-113	97-99.5
AAXN (AAXN)	87.11	72-75	66-64
Kansas City Southern (KSU)	176.54	149-153	138-141
Leggett & Platt, Incorporated (LEG)	49.79	51.5-53	47-48
Lithia Motors Inc. (LAD)	146.30	160-165	145-148
Luckin Coffee (LK)	0.00	28-30	24.5-25.5
Novocure (NVCR)	0.00	88-91	80-82
Palo Alto Networks (PANW)	236.92	241-246	225-228
Synnex Corp. (SNX)	129.70	119-123	110-112
Target (TGT)	124.77	122-125	112-114

The market and leading stocks have hit a few potholes during the past couple of days, and given the recent run and some short-term measures, more selling wouldn’t be shocking. But bigger picture, the outlook remains sunny: The trends are up for the major indexes and many fresh leading stocks have emerged. We’ve done a bunch of buying during the past month, though we’re still holding 24% on the sideline as we see how these new buys act.

In tonight’s issue, we talk about our market view, give you our latest thoughts on all our recommendations and write about the two themes that we think are leading the market higher, at least for now. Throw in some new ideas and there’s something for everyone in tonight’s Growth Investor.

In this Month’s Issue of Cabot Early Opportunities I reveal a few tips to help you buy into IPOs at reasonable prices and we look at some compelling data that suggests the 150 to 180 day period after IPO just might be one of the ideal times to buy.

We also go inside five companies that look great right now, including a few software stocks, a consumer goods company and a MedTech stock that’s flying under the radar now, but not for long!

The high-flying AI stocks got crushed on Friday. But those stocks started this week higher. Where do we go from here?

The technology-heavy Nasdaq index fell 4% on Friday, and the S&P 500 fell for the week for the first time in 10 weeks. A couple of things spooked investors. The AI trade turned sour after Broadcom (AVGO) reported earnings that included slightly lower revenue projections for its AI chips than were expected. Also, a blowout jobs report strengthened the case for a Fed rate hike by the end of the year.

A major economic narrative that took shape in recent years was the decline and (presumptive) inevitable death of the so-called “petrodollar,” as a growing number of countries diversified their foreign exchange reserves away from the U.S. dollar and toward gold and alternative currencies like the Chinese yuan.

WHAT TO DO NOW: The overall market remains in good shape, though we are seeing some exuberance on the upside and also a few leaders begin to act sloppy. Near term, then, it’s still a coin flip as to what comes, but the vast majority of intermediate-term evidence remains bullish. In the Model Portfolio, we took partial profits in Marvell (MRVL) earlier this week; tonight, we’re buying a half-sized position (5% of the account) in Bloom Energy (BE), which is extremely volatile but also strong and coming off a few weeks of rest. Our cash position will now be around 28%.

This market just keeps going higher.

Sure, there’s uncertainty out there. The war isn’t over. Inflation and interest rates are still too high. But stocks didn’t get the memo. After a strong April, the S&P 500 rose 5% and the Nasdaq soared 8% in May. The indexes are up 20% and 30%, respectively, since March 30 and are continuing to make new highs this week.

Despite the negative headlines and volatility, stocks just keep going.

After a strong April, the S&P 500 rose 5% and the Nasdaq soared 8% in May. The indexes are up 20% and 30%, respectively, since March 30. It’s also worth noting that despite the ongoing Iran war, the price per barrel of West Texas Intermediate crude oil closed down 17% for the month of May.

This week’s Memorial Day observance marked the traditional onset of the summer vacation season for millions of Americans. It’s a time of traveling, sightseeing, picnics and parties. It’s also the peak season for enjoying cold, carbonated beverages like soda pop and energy drinks.

With this dynamic in play, I think it’s time that we give some attention to our holding in PepsiCo (PEP), which is entering a critical period of its sales year.

On the heels of a miserable March and a euphoric April, I wrote several weeks ago in this space that I thought May would determine which direction the market is truly headed, at least in the intermediate term. We have our answer, and it’s a definitive “up.”

All three major U.S. indexes are touching record highs as of this writing, with the S&P 500 up 4.3% in May, the Nasdaq up 7%, and the slower-moving Dow Jones Industrial inching higher by 1.6%. That’s despite the ongoing Iran war and the accompanying sky-high oil and gas prices, escalating inflation, bond yields at multi-year highs, possible Fed rate hikes later this year, and record-low consumer sentiment.

Stocks have largely shrugged off this week’s dust‑ups in the Middle East as investors continue to bet on a near‑term memorandum of understanding (MOU) that would reopen the Strait of Hormuz and push bigger sticking points between the U.S. and Iran down the road.

Yields have cooled off this week and continue to do so this morning, thanks to a slightly lower‑than‑expected core PCE reading. April core PCE rose 0.2% month over month, below both March’s 0.3% reading and consensus, giving the Fed some breathing room as policymakers weigh the competing forces of inflation and growth.

The $145 trillion global bond market is under some stress due to runaway debt. The 30-year U.S. Treasury bond yielded over 5% last week, up from 4.63% at the end of February. Americans are struggling to keep up with their debt payments, as the cost of borrowing money increases. This is a global story. In Japan, the 30-year government bond yield just hit a record of 4.15%, and U.K. government debt jumped to 5.85% earlier this month.

Nothing stops this market. The S&P 500 hit another new high this week.

The spectacular earnings season helped power the rally. Average earnings growth on the S&P 500 is over 28% in the first quarter. That is far better than the expected 13.1% and the highest level of growth for any quarter since 2021.

We’ve all seen it before: the owner of a home in dire need of structural repair decides to “flip” the house for a quick profit by contracting a restoration service. Instead of making sorely needed foundational repairs, the cleanup crew focuses on superficial fixes like painting, tiling, flooring, etc., in hopes that a shiny new veneer will hide the problems that exist beneath the home’s exterior.

Crude though the analogy may be, I think it’s an apt description of what we sometimes encounter as turnaround investors.

WHAT TO DO NOW: The market and especially most leaders have finally shaken out a bit in recent days, and there are some worries we’re watching, including the rise in Treasury rates and the health of the broad market (our Two-Second Indicator is now negative). Even so, the primary evidence remains in good shape, and while this rest phase could easily take longer if the worries persist, the odds favor higher prices down the road. Tonight we’re making one small move: Averaging up on Axsome Therapeutics (AXSM), buying another 3% position. Our cash position will be around 34%, which we’ll be looking to put to work should the market continue to act properly.

One stock is being sold, one is moving from Strong Buy to Buy and there’s price action on several others.

This Chinese human resources company beat analysts’ estimates by $0.15 in its latest quarter and Wall Street expects the company to grow by more than 24% in the next year.

Only lost 27 cents per share in the latest quarter.

This emerging markets fund is trading at a discount and is an opportunity to gain exposure to some large tech stocks.

Tonight we’re going to sell our remaining half position in one stock and hold the cash. (We sold the first half of our position on April 20 for a small profit.)

This homebuilder is on track for recovery, or perhaps, a buyout.

One stock moves from Strong Buy to Hold, and another moves from Strong Buy to Buy

This ETF offers an opportunity to invest in the lesser known midcap oil companies.

I’ve been pounding the table on “takeover stocks” for half a year now.

Our second idea is a sale of a stock experiencing seasonal weakness.

Our first recommendation is a small-cap fund.

One of the stocks in the portfolio reported strong earnings and a revenue beat—it moves from Buy Low Opportunities Portfolio to Growth Portfolio.

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.