Stocks finally had a down week, though the damage was modest. Is it the start of a longer retreat, or a rare speed bump in a relentless bull market? This week could tell us a lot, especially with more inflation data set to print. To better fortify our portfolio against any potential turbulence, today we add an industrial stock that’s a strong value play that is a new addition from Bruce Kaser to his Cabot Value Investor portfolio.

We locked in 5.7% in BITO and 7.8% in GDX last week bringing our total return to 159.2%.

Our GDX position was “called away,” so I plan to start the income cycle over again in GDX by selling some puts early this week.

I plan to add at least one more stock to the portfolio this week, especially if we see the market pullback, which will bring our total to seven stocks. Moreover, I intend to continue to ladder our positions in perpetuity, so we are collecting premium on a weekly basis. As it stands, we have positions due to expire over the next four consecutive weeks.

Earnings season is mostly behind us, but there are a few stragglers yet to report on the calendar. Oracle is on the agenda this week. With an IV rank of 99.9 it makes sense to look at a potential trading opportunity in the company, which I’ve done in the trade ideas below.

The company is due to report after the closing bell today, so if we decide to place a trade look for an alert around mid-day today.

My message remains the same.

I plan on ramping up the positions in our actively managed portfolios (Buffett and Growth/Value) over the next expiration cycle. My goal is to have a minimum of 5 positions per portfolio, but I’m not going to race to get there. I’ll continue to pounce when the opportunity presents itself. We’ve taken our time adding positions since initiating our portfolio and, so far, our patience has served us well.

The S&P 500 (SPY) is up 8.3% YTD and 25.1% since its near-term low back on October 27, 2023. It can’t be argued that we are witnessing something well outside of normal distribution.


If we go back to October 27 and take a quick look at the probability of the current move, we can clearly see that the probability at the time for SPY climbing above 510 (SPY currently sits at 511.72) was 0.93%. That’s right – 0.93%! So yes, again, this is definitely a move well outside of the norm.

The market remains in a solid uptrend, though there’s no question some sellers are beginning to step up, with more volatility in the Nasdaq seen in the past month and, outside of chip stocks, some churning in the leading stocks. That’s not bearish, per se, as we’re still riding our winners, but for new buying we’re being more selective and looking for fresher leaders that have recently emerged with some power. In the Model Portfolio, we sold one stock in the past two weeks while starting a half-sized stake in one of those fresher leaders, and tonight, we’re averaging up in that name and starting another new position, too.

Half of all people need cataract surgery. But even though messing with your eyes is a massive decision, the Big 3 MedTech players in this market don’t have the best solution out there.

This is where today’s company comes in. It has developed cutting-edge technology that drives better outcomes for patients needing cataract surgery. The key? Its lens can be customized once in the eye!

All the details are inside the March Issue of Cabot Small-Cap Confidential.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the March 2024 issue.

In this issue we look into the bear case for the energy sector and discuss why energy stocks might provide some tonic for sober investors in an otherwise tech-intoxicated stock market. We highlight a selection of six energy stocks worthy of at least a sip.

This month’s Buy recommendation, VF Corporation (VFC), is a major apparel and footwear maker whose shares have collapsed 83% and now trade at their 2006 price. The new CEO, an unusual selection from outside the industry, is undertaking a complete overhaul of the company, with some early signs of progress.

Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the March 2024 issue.

We discuss the similarities between poker and value investing. This past month we moved two stocks from Buy to Sell – Allison Transmission (ALSN) as it reached our price target, and Sensata Technologies (ST) as its management continues to take a path that is not shareholder friendly.

Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.

As we plow into March, the overall story remains mostly the same for the market—the primary evidence remains strong, with the trends of the major indexes up, most leading stocks in good shape and with hundreds of stocks hitting new highs.

As we plow into March, the overall story remains mostly the same for the market—the primary evidence remains strong, with the trends of the major indexes up, most leading stocks in good shape and with hundreds of stocks hitting new highs. That’s the main focus, of course, but not to be ignored is the near-term froth seen in many names and the fact that few leaders are at high-odds entry points, extended above moving averages and having been on the run for months. Thus, our advice is unchanged: We’re riding winners higher, but are picking our spots on the buy side, aiming to find earlier-stage stocks. We’ll again leave our Market Monitor at a level 7.

This week’s list has many stocks that have emerged in recent weeks that seem worth a shot, especially if we see a normal retreat in the market. Our Top Pick has a great story and has transformed into a well-sponsored name (nearly 1,500 funds own shares!) as it’s the clear leader in a unique sector.

The party continues on Wall Street, and we’re not going to forecast when it will end. Instead, we’re going to try and capitalize on the strength, a strategy that has worked very well for the Stock of the Week portfolio over the last four months. Today, we take another big swing in a stock that was a home run for Cabot Explorer Chief Analyst Carl Delfeld several years ago, before the sellers came for it. Now, it’s back. It’s an overseas stock that doesn’t have the China stench on it, something that hurt other perfectly good stocks (see BYD (BYDDY)) in the last year.

We discuss earnings from Adient (ADNT), ESAB (ESAB), Frontier Group Holdings (ULCC), Gannett (GCI), Ironwood Pharmaceuticals (IRWD), Janus Henderson Group (JHG), Kaman Corporation (KAMN), Molson Coors (TAP) and Western Union (WU).

A big week in the market has started badly. The failure of First Republic Bank (FRC) and fears of further fallout have sent stocks reeling ahead of more news the market may not like later this week.


The market moved on from the banking crisis. But it is rearing its ugly head again. There is now worry of more bank failures and an escalating crisis. More small regional banks could fail. But the situation is still unlikely to devolve into a major crisis, at least at this point.

This week, I wanted to highlight two quick things before getting into our regular update.

First, I’ve talked a lot about the biotech bear market and how it’s lasted longer than most previous biotech bear markets.

I just stumbled upon the below chart on Twitter which shows the length of the current biotech bear market versus the previous three.

As you can see, the bear market is getting a little long in the tooth.

This is a very important week that should determine the near-term direction of the market.


While the market digests the JPMorgan (JPM) buyout of First Republic Bank (FRC), the largest bank failure since the financial crisis, it looks ahead to a packed week. There’s a Fed meeting on Wednesday, where the Central Bank is widely expected to raise the Fed Funds rate by 0.25%. But the Chairman’s comments afterward will probably have a bigger impact on the market.

This week, seven companies reported earnings, including Capital One Financial (COF), General Electric (GE), Mattel (MAT), M/I Homes (MHO), Newell Brands (NWL), Polaris (PII) and Xerox Holdings (XRX). Newell reported this morning, so our comments are brief.

WHAT TO DO NOW: Remain cautious. The market and (especially) growth stocks have come under further pressure this week, and while many names are still setting up well, more are hitting air pockets. Overall, we think the general environment is mostly unchanged (tedious, up and down, etc.), but we are making a couple of small defensive moves today—we’ll sell one-third of our stakes in both Academy Sports (ASO) and Wingstop (WING), taking some profits and holding the cash (around 63% of the portfolio) for now. Details below.

This week tech stocks looked better while First Republic Bank continues to struggle to gain its footing. It was a relatively quiet week for Explorer stocks as movement up or down was minimal. However, the news on the global electric vehicle (EV) race is coming fast and furious.

The market has been a little soft this week as better-than-feared results from many large caps, including Microsoft (MSFT) and Facebook (META), have been somewhat overshadowed by renewed fears of banking turmoil. Thanks First Republic (FRC). That stock is down 96% from its 2023 high (and that wasn’t a particularly high price).

This is a big earnings week that could determine the near-term direction of the market.


This earnings quarter started at the beginning of this month. But the rubber hits the road this week. Big technology companies including Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), and Meta (META) as well as energy companies Exxon Mobile (XOM), Chevron (CVX), and Valero Energy (VLO) all report this week.

April is a big earnings month for large-cap stocks. A few of our companies (Esquire and Redishred) have reported earnings but most will report in May or June.

It was only a month ago when we wrote about how the seemingly out-of-the-blue turmoil in the banking sector, driven by the sharp increase in interest rates, could lead to a major financial accident that traumatizes the world’s capital markets. Part II recognizes an ever-expanding roster to include additional percolating problems.

We allowed our January 20, 2023 190 call to expire worthless last Friday. As a result, I want to sell more premium in CVX today.

Today, a whopping eight Profit Booster positions will expire. Most are “slam-dunk,” full-profit trades, while others will go down to the wire.

The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.

As part of the Income Wheel approach, we allowed our Pfizer (PFE) puts to expire in the money at expiration last week. As a result, we were issued shares at our chosen put strike of 49.

We currently own the TIP January 19, 2024, 100 call LEAPS contract at $17.10. You must own LEAPS in order to use this strategy.

We currently own the DBC January 19, 2024, 22 call LEAPS contract at $10.50. You must own LEAPS in order to use this strategy.

It’s expiration week and we need to roll a few of our positions. Expect to see several trade alerts over the next few days as we buy back our short calls and immediately sell short calls (collecting premium) for the February expiration cycle.

The market has linked together a few decent days, helped by a better-than-feared jobs report last week (showed wage gains moderating), reopening in China (good for global growth) and greater recognition that higher-growth stocks reflect A LOT of bad news.

I’ve decided to hold on to my current LEAPS position, the January 19, 2024, 145 calls. Theta, or time decay, is still incredibly low so I’m going to hold on for another expiration cycle and reevaluate.

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.