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Stand pat. The market has been pulling back for the past two weeks, but our market timing indicators are still bullish and most of our stocks are acting well. That said, there’s not enough evidence for us to put more money to work, so except for two small changes (we’re switching Sabre (SABR) to a Hold rating and putting Facebook (FB) back on Buy), we’ll keep our seven stocks (and a cash position of 30%) and watch how things unfold.

The price charts on the S&P 500 and the Dow Jones Industrial Average are looking more and more like they’re just resting before beginning another run-up. Insurance and bank stocks’ price charts look identical, while energy stocks’ charts are more actively bullish.

Pull in your horns a bit. In last night’s Special Bulletin, we cut our loss in Kate Spade and moved our Five Below and Sabre to Hold. Our Cabot Tides are now on the fence, though our Cabot Trend Lines and Two-Second Indicator remain positive. We now have 30% cash in the Model Portfolio, with our next move depending on whether the major indexes can hold support.

Last week, reviewing the 10 Revolutionary Stocks, I asked you which ones you owned.

Royal Caribbean, Priceline.com and Winnebago are all Cabot Top Ten Weekly stocks.

We don’t spend much time thinking about the news. Instead, we look at the market itself.

Artificial intelligence (AI) has been the talk of Wall Street all year, these 7 ETFs allow you to increase your exposure to AI using a variety of strategies and selection criteria.

BYD (BYDDY) reported great earnings, and Novo Nordisk (NVO) got a lift from the World Health organization this past week – but the big news is that Alibaba (BABA) surprised markets by announcing on Tuesday a plan to split the $220 billion goliath into six standalone units.

As more hedge funds gravitate to exchange traded funds over individual stocks, here are the six best ETFs today as measured by relative performance.

Our readers are in our thoughts every day as we work to make our advisories readable and useful.

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the March 2021 issue.

As value investors, we follow the goings-on at Berkshire Hathaway, and comment briefly on its earnings and Warren Buffett’s annual shareholder letter, released this past Saturday. Your chief analyst owns some Berkshire shares (the lower-priced Class B shares), but isn’t a full-fledged Berkshire “groupie.”



We also discuss our new Buy recommendation – British insurance company Aviva, Plc (AVVIY). This company is emerging from a period of global sprawl and weak leadership, led by a new and impressive CEO.



Currently-recommended Dow (DOW) is a strong beneficiary of the global economic re-opening, with higher earnings likely ahead, so we are raising our price target to reflect this still-undervalued stock’s potential.



Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.



I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.



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It’s about at this point in a bear phase where investors start to throw up their hands. But it’s important to stay in touch: While the past two weeks brought most stocks lower, the selling was focused on areas that hadn’t yet gotten hit, while some of the “leaders” of this bear phase are actually trying to hold up. If you want to play a bounce, we actually think some of those areas could prove fruitful, though of course we’d keep things small and stay in an overall defensive stance.



This week’s list reflects all of this, with names from a handful of areas that have been forming higher lows in recent weeks (or months) and even showed some solid support (or even upside volume) of late. Our Top Pick is a Chinese EV player that’s showing excellent power and sports fantastic growth.

For the past two months, the market has been positive by most top-down indicators, but it’s gotten a lot trickier as time has gone on, with many growth areas cracking intermediate-term support, with repeated bouts of rotation and with upward progress slowing down. The good news is that even after today’s broad selling, the intermediate-term trend remains pointed up and many Top Ten stocks are holding their own, but just going with what we’ve seen, it’s getting tougher to make (and keep) much money. Right here, we’ll keep our Market Monitor at a level 7, but we think holding some cash and taking some profits on the way up remains a good strategy.

Despite the rotation, we did see some earnings winners last week among growth stocks, and this week’s list has a few alongside names from other areas of the market. Our Top Pick is a smaller name that broke out powerfully last month and has a solid story—shares are a bit thinly traded, so start small and aim for dips.

There was definitely some churning in the leading areas of the market from early February into last week’s Fed meeting, but there wasn’t much abnormal action, and the past few days have seen the buyers back at it, helping many leading stocks of all stripes pop. Now, we don’t consider the action as a brand-new buy signal, but the major evidence of the market (trends are up for most indexes and sectors) never wavered, so we’re holding most of our winners and looking to increase exposure in names that are enjoying big-volume accumulation. We’ll nudge our Market Monitor up at level 8.

This week’s list is a bit of a hodgepodge, with different types of names from varying sectors. For our Top Pick, we’ll go with a name from a strong sector that has seen its business turn up in a major way while the stock’s recent action looks like a major change in investor perception.

No question this is a challenging market but Explorer stocks held their ground. Cloudflare (NET) had a good week up five points, and Ford (F) remains my favorite pick on risk/reward basis. This week we move to a surprising trend that will benefit America, the climate, and your portfolio.

The market has deteriorated over the past couple weeks. The S&P 500 fell into a bear market on June 13th. The combination of continuing high inflation and a more aggressive than previously expected Fed has led to widespread expectations of recession over the next year.

Recessions are bad for stocks for obvious reasons. But there is something worse than recession, looming recession. Stocks generally recover during a recession. Because the market anticipates, it tends to rebound before the economy. The worst environment for stocks tends to be prior to recession, upon expectation, to part of the way through it.