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Most stocks on the Cabot Undervalued Stocks Advisor recommended list had strong performance this past week. Part of the strength was perhaps due to money managers’ general optimism that seems to brighten with turn of the calendar. With last year’s bonuses firmly in the bag, professional investors often view January as the start of a new clock. This translates into a higher tolerance for risk-taking, as there are nearly 12 months ahead to make up for any mistakes. Cyclical and value stocks tend to be major beneficiaries of this optimism.

The evidence has improved during the past couple of weeks, with our Two-Second Indicator looking much better and, importantly, a Three Day Thrust signal (one of our Blastoff Indicators) flashing green last week, both of which prompted us to put a little money to work last week. Still, while that’s definitely a feather in the bulls’ cap, the primary evidence remains negative, so we’re continuing to hold plenty of cash while setting our sights on next week: If our Tides turn positive and many potential leaders gap on earnings (there are tons of names reporting next week), we’ll definitely be putting a good chunk of money to work ... but as always, we’ll take it as it comes, which today means going slow but staying flexible should the market’s recent good vibes accelerate.

The S&P 500 is making yet another new all time high. The index has risen 72% since last March and over 17% just since the beginning of October. That’s amazing performance in a short amount of time.

I’m positive on the market for the rest of this year as a full recovery along with low interest rates and massive stimulus should be very positive for stocks. But the market never goes straight up. And a selloff is overdue. It would present a buying opportunity ahead of a promising year.



While I am increasingly cautious in the near term, there are very select places where great value can still be found. And even fewer that historically move independently of the overall market.



In this issue I highlight a stock that moves to its own drummer and not with the market. It is near the low point of its range in a long-term uptrend facilitated by rapid growth in its business. The situation presents an ideal time to buy into the stock now and write calls later.

2021 is off to a good start thanks to strong earnings and continued investor enthusiasm for big technology companies and a new administration. The backstop from governments and central banks, as well as the consensus among investors that a strong economic recovery is coming this year, has for now pushed volatility out of the market.

The Explorer portfolio had a good week and today we add another SPAC merging with an established, fast-growing financial payments firm based in the United Kingdom.

Years from now, I wonder how historians will label this new decade. Will it be the “Terrific Twenties” or the “Turbulent Twenties”? It’s obviously too soon to tell, but we remain optimistic about the future today with a new idea at the fringe of the powerful clean energy trend that has moved past an inflection point. Meanwhile, the Explorer’s group of stocks had another good week as Virgin Galactic (SPCE) launched into space. I wonder if its take-off might be wrapped up in the Reddit revolution?

Despite some nervous-making weakness last week, the Cabot Emerging Markets Timer has bounced back to regain its green-light status. And with our stocks acting well, the situation looks excellent, although we’re issuing the usual bull-market warnings that this can’t go on forever.

The latest earnings reports were mixed but generally encouraging.

The S&P 500 exceeding the 5,000 mark reminds us that while our dynamic economy leads to disruptions in companies and markets, and Fed interest rate moves can impact the market, it is revenue and earnings growth that really drives stock returns over time. Companies normally become more profitable over time, and that’s what leads to higher stock prices. Staying in the market and leveraging the power of compounding returns is important to successful investing.

So today, we expand our portfolio by starting a small position in a brand new asset class.

Dividend growth is an income investor’s dream. Here are the 10 best dividend-paying stocks for dividend growth investors.

All three major U.S. indexes were up around 2% yesterday as the Bank of England stepped in to stabilize the pound, but the recovery looks fragile as sentiment remains mixed at best in the short term. Explorer stocks drifted lower this past week and we remain defensive looking for asymmetric plays where the upside potential exceeds downside risk.

The rally continues, but it is definitely losing steam; odds are that the market will see more downside action soon, so if you’re heavily invested, you should think about lightening up.

At the same time, there are pockets of strength developing, so if you’re perhaps underinvested, several of the portfolio stocks deserve a hard look.

Five of the largest mega-cap stocks have a combined weight that accounts for nearly a quarter of the S&P 500. And right now, they’re saving the market.

Robots aren’t taking over the world the way some had feared, but robotics are a big industry. Play the trend with this Japanese robot stock.

When someone is asking, “what is growth investing,” they usually want to know what kinds of stocks are considered growth stocks.. but growth stocks change.

NFLX stock is up more than 42% in the last six months, and improvements in its bottom-line growth have helped. Here’s exactly how much they’ve helped.

A long-anticipated stock market collapse has arrived. Here’s why you should not only not fear it - you should embrace it.

Americans continue to abandon cable in favor of streaming video in droves. And last week, these five media stocks felt the brunt of that ongoing exodus.

With this stock below its September lows, we’re back to square one. How did we get here?

We’re enjoying better-than-expected results from reporting companies this week. Here’s my quick take on three Cabot Small-Cap Confidential positions that have recently reported.