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Netflix continues to revolutionize the way people watch movies at home.

The overall market continues to be, well, wobbly. After a 2.1% loss last Monday, the sharpest decline in roughly 10 months, the bulls took charge at the opening bell last Tuesday and have yet to give up. Last week, the S&P 500 climbed 1.92%, the Dow advanced 1.07% and the Nasdaq surged 2.76%.

Last week, despite a large market decline on Monday, the major indices took a baby step forward. The S&P 500 gained 0.51%, the Dow rose 0.62%, and the Nasdaq eked out 0.02%.



The advance came despite ongoing uncertainties around Chinese property developer Evergrande and the seemingly hawkish message from the Fed announcement. Now the focus has shifted to Washington, D.C.’s finest and the decision around the debt ceiling and infrastructure. Add a sprinkle of Chinese power concerns and there seems to be just enough worry to keep investors on their toes.

I’m selling one of our stocks and adding a new bank stock to the Growth Portfolio. I also describe a big June catalyst for banks’ share prices and highlight 11 other bank stocks.

A few weeks ago, we introduced the Gartner Hype Cycle, which traces the path that all tech companies follow in what essentially is an immutable law of tech investing. Currently, tech stocks have passed the Peak of Inflated Expectations and are sliding down to the Trough of Disillusionment. A few will ascend back to prosperity along the “Slope of Enlightenment” if they maintain both their relevance and their competitive edge. But most will lose one or both of these traits and thus continue downward in what could be labeled the “Decline into Oblivion.”

Stocks had their first legitimately good week since July, thanks to declining bond yields, improving earnings and – surprise! – Jerome Powell. Can the market keep the momentum going? I’m betting yes, even if it’s not a straight line. Market bottoms frequently occur in October, and this year will be no exception. Therefore, today I’m adding more growth to the portfolio in the form of a mid-cap name that’s little known to the masses but is essentially the Google search engine for big corporations. It’s a new recommendation from Cabot Early Opportunities Chief Analyst Tyler Laundon.

Enjoy!

As early as last summer, I predicted that the S&P 500 would continue rising into early 2018, then experience its overdue correction. I was about a month off on the timing. I was guessing March, but the correction arrived in February. I was right on the size of the downturn, though, almost to the penny. That was a small part technical analysis and a large part luck.

We need to begin with some bad news. Super Micro Computer (SMCI) stock tumbled 32% yesterday after its audit firm, Ernst & Young, resigned. The auditor said it had recently learned of information “which has led us to no longer be able to rely on management’s and the audit committee’s representations, and to be unwilling to be associated with the financial statements prepared by management.”

While the market mourns the misfortunes of poor Mark Zuckerberg, we actually have a little ray of light in emerging markets, as the Cabot Emerging Markets Timer is showing a very new green light. New buy signals are pretty delicate, but we’re taking this one seriously, doing a little new buying and shifting another stock from a Hold to a Buy rating. As the artillery of the trade war rumbles, it’s nice to have something to celebrate. Read on for details.

The market has been up, down and all over the place lately. So have our stocks. Oddly enough, from last Thursday’s close through yesterday’s close our portfolio is relatively unchanged—down just 2% using a simple average of each stock’s weekly return.

Recently, we’ve been adding very aggressive, high-growth names. These potential moonshots are a lot of fun to research and buy, but we need to maintain balance in our portfolio.

This month we’re going with more of a Steady Eddie-type, a small-cap company with a measured growth profile that features sustainable top line growth, significant EPS, and enough cash flow to fund both dividend payments and share repurchases.



I think in a few years we’ll look back and say it was one of the better investment decisions we made in 2021.



Enjoy!

In the June Issue of Cabot Early Opportunities we talk Artificial Intelligence (AI) and break down the technology into a few buckets of opportunity that make it a little easier to understand.

I also profile five ways investors can put their money to work in companies with AI exposure.

Enjoy!

The Magnificent Seven have run into a brick wall in the second half of 2024.

After carrying the market in the first half of the year, and through much of 2023, the seven largest mega-cap tech stocks – Amazon (AMZN), Apple (AAPL), Google (GOOG), Meta (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA) – have all seen the air let out of their balloons in the last two and a half months, or longer in some cases. On average, those seven stocks, which comprise roughly 30% of the S&P 500, are down 3.7% since the beginning of July. Not coincidentally, the S&P 500 as a whole is flat, after being up about 15% in the first six months of the year, during which six of the Mag. 7 (TSLA was down) performed even better.

Murdoch has offered $80 billion for Time Warner and has been summarily turned down.

For years and years, I regularly answered questions about Apple (AAPL) stock for good reason.

Cabot Investors Conference attendee Vivian Francher reviews the conference for CEO Traveler.

Explorer stocks were all up this past week with the exception of Ford (F) as inflation numbers out this morning are expected to show consumer-price inflation picked up again in January, to an annual pace of 7.2%.

While everyone has been watching the highlight reel of top performers with leverage to the AI theme lately, the real story this week is that more areas of the market are shaping up.

Yesterday, while the Nasdaq sold off, we saw the S&P 600 Small Cap Financial ETF (PSCF) pop 3%. That came on the heels of a 4% rally Tuesday.

Yes, yes, I know. Nobody really cares about this ETF. But small banks make up almost a third of total U.S. deposits. They matter, bigly.