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We’re putting our mining helmets back on today and taking a position in a speculative micro-cap gold and copper exploration company that’s just about to get the drills turning.

This type of stock is intended to scratch the speculator’s itch. It’s not suitable for investing money that you need. That said, if things go well – and I think there’s a good chance they will – the returns could be spectacular.

But please, go in with eyes wide open. This is supposed to be fun.

WHAT TO DO NOW: Remain bullish. The market has reacted well to the election and took today’s Fed decision in stride; both of our trend-following indicators are bullish and leading growth stocks remain in good shape. Today, we took partial profits in AppLovin (APP) via a special bulletin after it went vertical on earnings. But tonight, we’re putting that and a bit more money back to work via two new positions—starting half-sized stakes in Samsara (IOT) and the ProShares Ultra Russell 2000 Fund (UWM), leaving us with a cash position around 18%.

Macy’s (M) – With a capable new CEO since February 2018, Macy’s is aggressively overhauling its store base, cost structure and e-commerce strategy to adapt to the secular shift away from mall-based stores. Macy’s acceleration of its overhaul shows considerable promise.

The market remains in good health and trending higher, so while there’s always a possibility of a big correction starting any day, the important thing is to remain heavily invested, because the trend is your friend.

Most of our portfolio stocks have been performing superbly (with three hitting new highs today!), but one that isn’t is Tyson Foods (TSN), so that’s now a sell.



As for the newest recommendation, after last week’s dividend-payer, this week we swing back to the small and aggressive side of the market, with a fast-growing company that’s thriving by providing a great consumer service in the cloud.



Full details in the issue.

Rich Howe, Chief Analyst of Cabot Micro-Cap Insider, talks about the micro-cap market and how he identifies top ideas. He then profiles three stock ideas which could triple within 12 months.

We’re going through a highly unusual period in the history of the stock market during which earnings estimates keep rising for a broad spectrum of companies. That’s because we’re experiencing a growing economy, deregulation and lower income tax rates, all of which contribute to rising corporate profits.

The market has been spectacular. Can we expect more of the same in 2026?

The S&P is up a staggering 95% since this bull market began in October of 2022. It’s up 128% this decade, for an average annual return of about 15%, 50% higher than the historical average.

The huge returns have been all technology. Without technology, market returns for the past few years would be rather uninspired. But there is growing investor angst regarding the sustainability of technology valuations and whether all this massive AI investment will deliver tangible payoffs. The sector could have a tougher year in 2026.

Fortunately, there are a lot of stocks that aren’t technology. The rest of the market cares more about interest rates and the economy, and those things are shaping up well. The Fed is in a rate-cutting cycle, inflation is subdued, oil is cheap, and a higher level of economic growth is expected in 2026.

The rally is broadening, and 2026 may be a year for non-technology stocks to shine. Overall earnings are expected to grow 14% next year, with much of the growth over last year coming from other sectors. Many stocks in other industries sell at cheaper valuations than the market, and performance is improving as investors seek to diversify beyond technology.

The bull market has been lopsided toward technology so far. But 2026 is shaping up to be a year for other stocks to catch up. In this issue, I highlight a stock poised to do just that in the year ahead.

For new investors, asking “How many shares of this stock should I buy?” is the wrong question.

Apple (AAPL) and Alibaba (BABA) are two blue chip stocks headed in two different directions. And therein lies the problem with buy-and-hold investing.

Just in case any of my subscribers wants to invest in energy companies, but feel bad that perhaps those companies are cheating America, there are three things I’d like to point out about ExxonMobil (XOM).

This month we’re going with a small software company serving a resilient industry that has been slow to adopt to cloud technology, but which is coming on strong now.

Despite the tough macro environment this company has been beating expectations for many quarters. Management has been raising revenue guidance too, and a tweak to the business model is starting to pay dividends.

Enjoy!

Enjoy the current strength but be aware of the environment we’re in, and why. Accept that we could see a significant retreat in the prices of many of our stocks in the near term, but that the fundamental reasons behind their current strength should persist despite a retreat, and drive them higher over the coming years.

Good gracious, last week was volatile for the market as the indexes moved violently day-to-day. Yet, by the close of trading on Friday the S&P 500 and Dow were only down marginally on the week, while the Nasdaq had declined by 1.5%.

Good gracious, last week was volatile for the market as the indexes moved violently day-to-day. Yet, by the close of trading on Friday the S&P 500 and Dow were only down marginally on the week, while the Nasdaq had declined by 1.5%.

Note: Due to the Christmas holiday, there will be no Cabot Small-Cap Confidential update next week. Happy holidays!

In last week’s update I spoke about the potential for a market retreat early in 2025 given that investors are sitting on sizeable paper profits, and selling after December 31 would allow them to postpone capital gains taxes.

My projection may have been off by a week and a half.

One stock moves from Hold to Buy, one moves from Hold to Sell, and we have earnings reports on five stocks.