Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the October 2023 issue.

We include brief updates from investor day presentations by Philip Morris International (PM) and Sensata (ST), as well as comments on our other recommended names. We also share a view on how streaming services are changing the sports viewing experience, along with a thought on why Comcast (CMCSA) should be fine.

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.

I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.

The market looked ugly early last week before finding some support, but we’re going to need to see more before changing our stance. We will say that, with September in the rearview mirror, there are many studies that point to a year-end rally and we continue to see a decent number of potential growth-y leaders that aren’t far from overcoming some technical hurdles. In other words, now’s not the time to stick your head in the sand, but as always, we want to see it first (some decisive buying) before taking much action. We’ll leave our Market Monitor at a level 5.

This week’s has a broad array of resilient stocks, with our Top Pick in pole position to be one of the top growth stocks—if and when the market gets going.

October is the most celebrated month in Cabot’s native home of Salem, Massachusetts (i.e., home of the Salem Witch Trials). All month long, it’s one costume-heavy Halloween party. Will a similar party commence on Wall Street? The odds favor it. October has a long history of being a month where markets bottom – and rallies begin. In fact, it happened just last year. One area of the market that has already begun to rally is cannabis, thanks to some (long overdue) new legislation. So today, we add back a bit of cannabis exposure courtesy of Cabot Cannabis Investor Chief Analyst Michael Brush.

Details inside.

Our BITO calls expired worthless and as a result, we were able to bring in roughly 3.5% on the trade. I will be selling more calls early this week.


Otherwise, all continues to be well as we head towards the October 20, 2023, expiration cycle. There isn’t much to do other than allow time decay to work its magic as we head closer and closer to the end of the October 20, 2023, expiration cycle. If our positions act accordingly, we have the opportunity to buy back our positions early, lock in profits, and bring in 5% to 10% worth of call premium over the next week or two.

As I stated last week, volatility has once again made an appearance. However, as we have all seen over the past few months, sightings have been rare and, more annoyingly, fleeting. If volatility and in turn IV ranks are able to stay at current levels or potentially rise a little, we should begin to see opportunities pick up. As always, my goal is to have three to five open trades at any given time. With IV ranks low across the board the past few months, we’ve remained patient and kept our powder dry. But all of that is quickly changing, at least for the moment. If volatility continues to trade around these levels expect to see a few additional trades. As it stands, we have two open trades, one of which we opened late last week and thankfully, both trades look good at the moment.

I’m going to keep it short today, with just a quick update.


The earnings calendar is somewhat bare as we finally reach the end of the earnings doldrums. Next week, however, earnings season finally returns with several of the big banks due to report, including Citigroup (C), JPMorgan Chase (JPM), Wells Fargo (WFC) and several others. I expect to be a part of one, if not two, of those earnings announcements. Of course, I will go over a preliminary, detailed look at a trade or two in next week’s issue. However, until then, we should expect to stay on the sidelines as there just aren’t any opportunities that meet our strict criteria.

The bond market’s wild gyrations were once again front of mind for traders last week, though interestingly by week’s end the market was mostly mixed as the S&P 500 lost 0.75%, the Dow fell 1.34%, and the Nasdaq was virtually unchanged.

The bond market’s wild gyrations were once again front of mind for traders last week, though interestingly by week’s end the market was mostly mixed as the S&P 500 lost 0.75%, the Dow fell 1.34%, and the Nasdaq was virtually unchanged.

The Senate banking committee is likely to approve key cannabis sector banking reform today.


Approval would be a significant catalyst for the group. So, it may spark a tradable rally.


Short-term traders may want to sell the strength in this volatile group. Another option would be to de-lever cannabis exposure by selling a portion of AdvisorShares MSOS 2x Daily ETF (MSOX) holdings and swapping the funds into the unlevered version, AdvisorShares Pure U.S. Cannabis ETF (MSOS). That maintains exposure to the group in front of expected catalysts ahead but dampens some portfolio volatility.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the September 2023 issue.

The attention of most investors, commentators and analysts has been on the winners, notably the Magnificent Seven, driving this year’s stock market rally. As contrarians, we are fine with letting a few overpriced trendy stocks capture the spotlight. One place that draws our attention is the other end of the spectrum – those with the worst performance. While most of these stocks fully deserve the market’s dour judgment, some have favorable changes underway. We look into four large and mid-cap stocks that fit this description and one that does not. We also discuss a tactic to help improve one’s success in investing in out-of-favor stocks.

Our feature recommendation this month is Advance Auto Parts (AAP), one of the four major auto parts retailers. The shares have fallen sharply out of favor, but a comprehensive and much-needed overhaul is now starting.

We also include our recent Sell recommendations: Toshiba (TOSYY), Holcim AG (HCMLY), First Horizon (FHN) and ESAB Corporation (ESAB), and our suspension of our rating of shares of Kopin Corporation (KOPN).

The stock market is inherently unpredictable in the near term. That’s what makes it a market. But it has been especially hard to predict in recent years. And there might be more of the same going forward.

There could be continued economic growth with rising interest rates and inflation or an economy bounding toward recession in the next couple of quarters, or anything in between. Sure, the market could find the means to rally with a desirable in between scenario. But it is more likely that the market will just bounce around or move lower.

Amid such uncertainty, it makes sense to find stocks that can weather any scenario. Instead of placing a bet on what the Fed or inflation or the economy might or might not do, it makes sense to seek out an all-weather income generator.

In this issue, I highlight the stock of a company that operates in an incredible niche market that has provided earnings growth for 31 consecutive years and enabled the stock to consistently outperform the market in every kind of environment. The company is positioned for strong growth in the years ahead and is selling below its average valuations over the last five years despite the high-priced market.

Ahead of the long holiday weekend the market had yet another good week. The S&P 500 gained 1.75%, the Dow rallied 1.5%, and the Nasdaq rose another 1.9%.

This week in an attempt to diversify the portfolio we are adding an energy play.

The market has turned decidedly negative after last week’s worse-than-expected inflation report. This week, all eyes are on the Fed.

The Fed is widely expected to raise the benchmark Fed Funds by 0.75% for the third straight time. But some Wall Street types are worried that it could be a 1.00% hike. In the grand scheme of things that’s not a big difference. But Wall Street suffers from short-sightedness. And not the kind that can be corrected with glasses.

Central banks around the world are boosting interest rates at a pace faster than perhaps any other time in living memory. Since mid-March, only six months ago, the U.S. Fed Funds rate has surged from essentially zero to about 2.35% and will be at 3.0% by the end of this week.

Given the volatility of September, I want to revisit my “bear market” analysis.

One of the most aggressive Federal Reserve rate-hiking cycles ever is weighing heavily on gold, with another rate increase expected this week. On top of that, continued strength in the dollar index and rising yields in longer-term Treasuries (a major competitor for gold) are causing bullion investors to run for the exits.

While the market’s fireworks around the CPI data overshadowed most everything else this week, a few of our companies provided noteworthy updates, noted below and in our podcast.

Tuesday’s CPI report served up a 0.02% miss, which sent the market into a tailspin. The Nasdaq fell more than 5%, its worst day since 2020. The S&P 500 Index fell 4.3%. And small caps? The S&P 600 fell 3.9%

As of 2 pm EST, The market was mostly lower, though modestly so, with the Dow up 33 points, but the Nasdaq down 85 points and most growth stocks in the red.

The market turned ugly again fast yesterday. It was the worst single-day selloff in years after reality crushed the pipedream that inflation is plunging and the Fed will stop being hawkish by early next year.

The headline inflation number came in at 8.3% for August versus an expected 8.1%. Although it was lower for the second straight month, after 8.5% in July and 9.1% in June, it was worse under the hood. CPI inflation was lower because of falling gas prices. Virtually everything else rose. Core inflation, which subtracts volatile food and energy prices, rose significantly from July to August.

A sizeable drop in the market indexes yesterday got all the headlines, as it leads to concerns the Federal Reserve will be more aggressive in raising interest rates to tamp down inflation that isn’t cooling as quickly as hoped. The drop plunked the markets on top of a zone of support – all the trading that happened below current levels in mid-June to mid-July – so there is no need to panic.

In our August 24 note, we commented that the current stock market felt like the scene in the 2000 movie “The Perfect Storm” in which the fishing boat Andrea Gail, after an intense battle with the storm, finds herself in calmer waters lit by rays of sunshine.

We are moving shares of Marathon Oil (MRO) from Buy to Sell.

Today I’m going to start with one trade in the All-Weather portfolio. I’m going to go over it step by step, so we all have a good understanding of how a poor man’s covered call works. Typically, my alerts will not be nearly this long, but I want to make sure we are all on the same page before trades start to pick up.

I want to dip my toes into at least one position this week, with the intent of adding several more next week. My goal is to have a rotation of five to ten positions in both the Income Trades Portfolio and Income Wheel Portfolio.

In today’s trade alert, I want to start out by selling some puts with the intent of eventually wheeling into the position.

After a seven-week hiatus, the bulls finally made an appearance last week…and they roared back with vigor. The S&P 500 (SPY) managed to climb 6.6% last week alone. This week has been a little different as SPY seems to be consolidating after four straight days of rallying.

After dipping below 20% for a few days last month, the S&P is now only down 12.8% for the year. That being said, implied volatility, as seen through the VIX, continues to stay above normal levels.

Welcome everyone!

It’s a pleasure to have you all on board.



I hope all of you had the opportunity to read through the User Guide and the various reports on your subscriber page. If you haven’t, please take the time to read through them at your leisure so you have a decent understanding of our approach and the strategies we use … and more importantly how I approach risk management.

Welcome everyone!

It’s a pleasure to have you all on board.



I hope all of you had the opportunity to read through the User Guide and the various reports on your subscriber page. If you haven’t, please do so at your leisure so you have a decent understanding of our approach and the strategies we use…and more importantly, how I approach risk management.

It’s a pleasure to have you all on board.

I hope all of you had the opportunity to read through the User Guide and the various reports on your subscriber page. If you haven’t, please take the time to read through them at your leisure so you have a decent understanding of our approach and the strategies we use … and more importantly how I approach risk management.

I originally recommended buying BBX Capital (BBXIA) in October 2020 at a price of 3.17, shortly after its spin-off from Bluegreen Vacation Holdings (BVH).

Sociedad Química y Minera de Chile (SQM) is now up 11% from our initial entry point as of Friday, which means it’s time to take some profit off the table per the rules of our trading discipline.

The market has been a mess for the past several months, as countless stocks have completely fallen apart. It’s been UGLY.

Kronos Worldwide (KRO) is now up 18% from our initial entry point as of Thursday, which means it’s time to take some profit off the table per the rules of our trading discipline.

Bitcoin is rallying today up 4.61% when compared to the broader market which is flat. The Nasdaq is up slightly, with small caps leading today’s modest rally.

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.