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Should you buy, sell or hold amid this coronavirus crash? Here are a few investment strategies that have helped me through many volatile markets.

In today’s note, we discuss the recent earnings reports from Nokia (NOK) and Newell Brands (NWL), plus 15 other earnings reports from portfolio companies, some of which impacted their standing in the portfolio. Busy week, so let’s get into it.

So far, so good in September, as there’s no market correction in sight. The increasing likelihood of a Fed rate cut later this month is helping to counteract the negative effects of seasonality during the traditional “spooky season.” Let’s hope the Fed doesn’t disappoint when they convene next week. In the meantime, the investing waters are warm, so let’s take a bigger swing this week by adding one of the world’s greatest and highest-profile growth companies to our portfolio. It’s a recent recommendation from Carl Delfeld to his Cabot Explorer audience. And it’s a former market darling that, after a rough couple years, is starting to gain traction with investors again.

Details inside.

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.

Led by an awful week for the Semiconductors (down 11%), the S&P 500 fell 3.62% last week, while the Dow lost 2.42%, and the Nasdaq dropped another 5.5%.

Led by an awful week for the Semiconductors (down 11%), the S&P 500 fell 3.62% last week, while the Dow lost 2.42%, and the Nasdaq dropped another 5.5%.

It was a historic week for the market, and not for any positive reasons as the S&P 500 fell 9.1%, the Dow lost 7.9% and the Nasdaq declined by 10%. Perhaps the weekend will give traders a bit of time to better digest the tariff news and the market will stabilize this week, OR, it’s also possible that the uncertainty is just too much for traders to digest.

It was a historic week for the market, and not for any positive reasons as the S&P 500 fell 9.1%, the Dow lost 7.9% and the Nasdaq declined by 10%. Perhaps the weekend will give traders a bit of time to better digest the tariff news and the market will stabilize this week, OR, it’s also possible that the uncertainty is just too much for traders to digest.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the July 2022 issue.



As we approach the mid-point of the calendar year, we provide our traditional mid-year update for the stock market and high-yield bond market. Our commentary on stocks reviews what sectors worked (only one), what sectors and stocks stood out as the weakest, how the value vs. growth shift has played out so far, and what helped developed markets outside the United States limit the depth of their selloffs. We also discuss the state of two key drivers of future stock market performance, the role of the two “Easts,” and offer some advice on what not to do in this market, as well as a suggestion about what value investors might want to do.



Our call last year to avoid high-yield bonds, cousins of sorts to turnaround stocks, was spot-on. We walk through the effects of inflation on the two components of high bond yield prices, provide some historical perspective on yield spreads, and describe how only two of the three ingredients for a bankruptcy cycle are in place. We also suggest that while high-yield bonds are more attractive today than a year ago, it is still a time to be selective.



Our feature recommendation this month is ESAB Corporation (ESAB). This high-quality company was recently spun off from Colfax Corporation and checks nearly all of our boxes for an appealing turnaround stock, yet it is being overlooked as investors migrate to familiar stocks.



We note our recent ratings change of Marathon Oil (MRO) from Buy to a Sell.

Earnings season has arrived in full force. So far, cyclical companies are rallying and technology is faltering, just like before earnings.

Big tech earnings have been mixed so far, with more to come this week. Investors so far haven’t seen enough to change their view that AI investment is too high while revenues have not soared enough yet. That attitude could change soon or endure for a while longer. But AI will be back in favor at some point.

The big recent developments since I wrote last Thursday are the rise in Covid cases in Europe, and that Jerome Powell got the nod for another term leading the Fed.

Over the past year, I’ve had many great conversations with our Dick Davis Digest contributors, as part of our Contributor Interview Series for Investment of the Week. In today’s Dividend Edition, I thought I’d collect some of the best income investing advice these experts shared with me. Together, their advice...

Proxy season is moving into full gear. As a shareholder, you are one of the owners of your companies, so you get to vote on major decisions. Shareholder votes are, of course, much like public government elections, but in most cases your vote has a bigger impact.

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.

Mutual funds have been around for decades, but it’s been just the last 25 years or so that their popularity has skyrocketed, due in large part to the growing participation in 401(k) retirement plans, which made mutual funds household names. About a decade ago, exchange-traded funds (ETFs) gained traction with individual investors and began to give mutual funds some heavy competition. And in the past few years, they have also emerged as good vehicles in which to park retirement money. But what many investors don’t realize is that there is another vehicle (besides mutual funds), which also offers you a means to pool your money with others to buy shares, at nominal costs.

I’m adding E*Trade Financial (ETFC) to the Growth Portfolio today.