Search

Despite the headwinds of trade tensions and pundits worrying about China growth, our Explorer portfolio holdings Sea, Alibaba, Luckin Coffee and Huya all reported outstanding financial results this week.

The Emerging Markets (EEM) Timer is still positive as we introduce a new resource recommendation with operations at the very heart of Asia-Pacific growth.

It has been a busy week in emerging and global markets.

The MSCI Emerging Markets ETF (EEM) remains in a negative position, just below 20-day and 50-day moving averages. Our portfolio has a 35% cash position and maintains 10% allocation to an ETF that moves opposite the EEM.

The subject heading of my last Weekly Update was “The Weirdest Recession Ever (Maybe)”. We’re starting to see why. Because it may not be a recession at all.

Ford (F) reported a down third quarter, but Explorer stocks had a good week with all positions in the black. MP Materials (MP) and Oracle (ORCL) were up 11%, and SQM rose 8%.

The headline of today’s GDP report will likely be more upbeat than the two previous negative growth numbers, instead showing that third-quarter GDP grew at about a 2% annualized pace.

But beneath these numbers, investor sentiment, economic trends, and geopolitical risks are not all that encouraging.

How should investors take all this in and execute a strategy to exploit the situation?

The market has been trying to climb off its knees this week as we’re finally getting some solid evidence that both inflation and the job market are cooling.

In a seemingly odd twist, in the short term what’s bad for the economy is probably good for the stock market. While that doesn’t mean we’re out of the woods just yet, I’m going to up our risk profile slightly with a potential big winner in the battery industry.

This company is currently qualifying batteries for wearable technologies and expects to move into more consumer markets, as well as the EV market, in the coming years. All the details are inside the October Issue.

Enjoy!

A tough week for markets as concerns over recession, persistent inflation, and geopolitical tensions grow. Explorer stocks were not spared as they all pulled back with exception of Oracle (ORCL) and micro-cap Kraken Robotics (KRKNF). New restrictions on chip-related sales to China hit semiconductor stocks. An almost $8 billion deal by Brookfield Renewable Partners and uranium producer Cameco to buy nuclear services firm Westinghouse is the latest sign of revival in nuclear power after years of decline. The matchup would create something of a Western nuclear powerhouse, pairing a key nuclear power service provider with the largest publicly traded uranium company and one of the world’s biggest owners of wind and solar projects.

This week we sell two positions and go to Japan for a conservative, high quality play on an overlooked but critical part of the electric vehicle revolution.

The technology sector is on fire. Before the market opened on Tuesday, the sector was up 5% for the past week, 15% for the last month, and 34% YTD. It’s also up more than 2% on Tuesday. What happened?


The outlook for many sector stocks greatly improved last Thursday. AI, or artificial intelligence, had been seen as a huge growth engine going forward as companies invest heavily in the technology. Those growth projections got a huge shot of adrenaline and the AI phenomenon got real when semiconductor company Nvidia (NVDA) reported earnings last week.

Led by the Magnificent Seven, the S&P 500 is a bit overcooked at the moment. Small and mid-caps, on the other hand, are cheap - and appear poised for outperformance in the New Year. So today, we add a mid-cap life sciences company with high upside potential in an emerging area of biology.

The first week in April was quiet for Explorer stocks. Looking at what sectors are doing particularly well through the MSCI World index, technology and other cyclical sectors such as energy have outperformed.

Where are the bargains? Consumer staples, Europe, and perhaps even electric vehicle stocks. The EV slowdown can’t be denied – their first-quarter growth rate was a weak 2.7% vs. last year’s 47%. Hybrids vehicles are clearly preferred by many, and on the rise.

The auto insurance market has been in a deep freeze since the middle of 2021. But now it’s thawing ... maybe even shifting into growth mode. That means huge potential for companies with direct access to the market.

That’s where today’s idea comes in. It’s a micro-cap internet company that offers unfiltered exposure to the auto, home and renters’ insurance markets.

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

Our healthcare system is broken. Insurance costs have risen inexorably. Doctors are frustrated at being paid less than they are worth. Millions of Americans are unable to afford basic insurance. And Americans are in terrible health. Yet previous attempts to fix the system have failed. So President Barack Obama is hunting for a less expensive system that will keep more of us healthy. I say, “Good luck,” sincerely but skeptically, because while I truly desire a better system I believe the institutionalized powers will make achieving change very difficult. In fact, I think what we need for this challenge is not a president but a dictator.

Conan O’Brien was recently undone by his media-hopping fans, demonstrating the way the Internet is changing the way we watch TV.

While in Amsterdam last week, I visited the Tulip Museum on a whim. It was small, but informative. Before leaving, I bought a book called Tulipomania, less because I’m riveted by tulips than because I was out of reading material and Dutch bookstores were closed for Easter Monday. The book, by...

This was another big week for our portfolio as four stocks reported quarterly results. Fortunately, the wind was at our backs as the broad market is on track for its best weekly gain since March!

U.S. stock markets, as represented by the S&P 500 (SPX) and Dow Jones (DJIA) indexes, continue reaching new highs. But stocks and stock markets don’t go straight up, even during bull runs.