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As expected, the Federal Reserve cut interest rates by a quarter point yesterday. This was largely already baked into the market. Looking ahead, Fed Chairman Jerome Powell had an impactful comment: “What do you do if you are driving in the fog? You slow down.”

This comment is consistent with our strategy of alternating aggressive and conservative stocks, taking partial profits to build cash, and seeking international diversification.

It might not be too early to bargain hunt very selectively. Companies that are likely to continue to grow earnings and the dividend are likely to recover. There is one such opportunity in the cannabis sector.


The sector has been decimated in this market. The ETFMG Alternative Harvest ETF (MJ), the largest cannabis ETF, has fallen almost 50%, and 70% from the 2021 high. The selloff has taken the most reliable money maker in the sector down with it, despite continuing success and earnings growth.


In this issue, I highlight this reliable and high-growth stock. It pays a better than 5% yield and the payout is likely to grow, as earnings are expected to grow 37% this year.

It’s a raging bear market in technology.
But technology has been by far the best performing sector for well over a decade for good reasons. We are in fact in a technological revolution. Technological advances are accelerating. It feeds on itself and is transforming the world. Technology is where there is massive growth and excitement for the future.


Sure, the market might get cranky in the near term. Inflation and higher rates might be all the rage right now. But technology isn’t going away. It’s likely to grow even bigger in the future. The time to buy such stocks is when they are cheap and out of favor.


In this issue, I highlight three existing portfolio positions in the technology sector ready for purchase. All of these stocks sell at compelling valuations with strong growth likely ahead. They are victims of indiscriminate selling in the sector. At some point, hopefully sooner, investors will realize the value that has been created by this year’s market turmoil.

Current Market Outlook


The breakdown of the Greek debt negotiations hit the markets this morning before some support appeared (partially on news that Greek talks were back on). Our main advice right now: Keep your eyes on the action of the market, not on the headlines. So far, the major indexes remain in a sideways range, while a few stocks are still in choppy uptrends. Thus, despite the news, not much has changed, and so we’re keeping our Market Monitor in neutral territory and sticking with the game plan of holding some cash and being choosy on the buy side, while honoring stops and booking partial profits on the way up.

This week’s list has some names that haven’t appeared in months (if ever) as some new leadership attempts to firm up. Our Top Pick, though, is a familiar name—Gilead Sciences (GILD) is cheap, flush with cash and just emerging after a long rest.

Stock Name	Price	Buy Range	Loss Limit
Charles Schwab (SCHW)	0.00	32-33	30-30.5
Signature Bank (SBNY)	0.00	140-145	133-135
Netflix, Inc. (NFLX)	423.92	635-660	570-580
Men’s Wearhouse (MW)	0.00	60-62	56-57
Mobileye N.V. (MBLY)	0.00	47.5-50.5	44.5-45
JD.com (JD)	39.58	35.5-37.5	33.5-34
The IMAX Corporation (IMAX)	0.00	41-43	37-38
Illumina Inc. (ILMN)	289.74	209-216	198-199
Gilead Sciences (GILD)	75.10	115-119	106-107
FireEye (FEYE)	0.00	50-52.5	45-46

The population is aging. And it’s aging at warp speed. People 50 years of age and older now comprise a third of the U.S. population. The fastest growing segment of the population is 65 and older as an average of 10,000 baby boomers are turning 65 every single day. And it’s not just this country – aging is a global phenomenon.

We don’t know how sticky inflation will be or what the Fed will do. We don’t know if there will be a recession this year or next year or what the recovery will look like, or who will be the next president. But we do know that the population is shifting and companies on the receiving end of the torrent of dollars that will flow as a result should benefit mightily.

In this issue, I highlight another new stock to buy. This stock is cheap with strong momentum and properties that should help it perform well in any kind of market. It’s a healthcare stock ahead of a huge megatrend, the aging population.

Investing with the tailwind of a megatrend makes it so much easier to make a successful investment. It makes mediocre stocks great and good stocks one of your best investments ever.

As Bitcoin and Ethereum prices continue to skyrocket, it’s clear cryptocurrency is here to stay. How to play it? Try these 3 crypto ETFs.

Many experts are recommending a stock in the electronic payment industry.

The S&P 500 is the go-to gauge for U.S. stock market performance, but should it be? I think the Dow tells the real story.

It’s been a very interesting week, with a lot of news and movement, though not a ton of progress in either direction. Coming into today, the Nasdaq was up about a half percent on the week, but that was the only thing in the black—every other major index was off 1% to 2% or more, even including the equal-weight Nasdaq 100, which was down 1% coming into Friday, and the equal-weight S&P 500, which was off 2%.

For the first time in months, stocks actually have a bit of momentum. Is it sustainable? Or another false start? Too early to tell. But it’s a good time to keep adding beaten-down names that are finally showing signs of life. This week’s new recommendation fits the bill, and has been a big winner for Carl Delfeld since he added it to his Cabot Explorer portfolio earlier this month.

Details inside.

It’s been a rough year for stocks. And things may get worse before they get better. Meanwhile, money markets pay barely anything, and you never know when the market will turn.
Dividends are a great answer for a market like this.


They provide an income and lower volatility in turbulent markets and make it easier to stay invested ahead of the next bull market. Dividends account for most of the market returns during flat and down markets and excel during times of inflation.


In this issue, I highlight a company in one of the most defensive and recession-resistant industries on the market that currently pays a massive 8% yield. The stock is already cheap and likely near the trough of its own bear market with far more upside than downside over time to complement the high dividend.

The banking situation has changed the Fed. The damage done by previous rate hikes is making the Central Bank far less hawkish. The risk is shifting from the Inflation/Fed cycle to recession. The end of this cycle may have been expedited. And stocks could rally out of this bear market sooner than thought.

Of course, the banking issues might not be over yet. And the timing and severity of a possible recession is still unknown. Things may get worse in the market before they get better. For now, defensive stocks that can maintain earnings growth in a worsening economy or recession are better places to be.

Stocks are turning distinctly more bearish in the near term as slower growth in China hits a market that was already teetering in anticipation of a more aggressive Fed.
But the selloff in the indexes doesn’t reflect all stocks. Some stocks have more downside left. Others will likely hold their own even if the market keeps falling. And still other stocks have already been oversold. These stocks should have less downside from here than the overall market, and recover much more quickly when the selling abates.


In this issue, I identify two oversold stocks in the portfolio. These are stocks that have already been crushed and sell at vastly reduced prices despite continuing strong earnings growth. While these stocks may fall further in the weeks ahead if the market gets uglier, I believe they both sell at deep discounts compared to where their prices are likely to be later in the year.

Stocks have exceeded expectations so far this year. The S&P has rallied 20% from the October bottom and is up over 9% YTD. But there is a plethora of issues in the way of a further rally.

Even if we get past this debt ceiling issue without consequence, there’s inflation and the Fed. There’s also an increasing possibility of a recession later this year or early next year. The market rarely performs well ahead of a recession. A bear market rally should be about out of gas. And it’s difficult to see how stocks can soar into the next bull market until there is more clarity on these issues.

It still makes sense at this point to only buy the defensive stocks that are below the targeted price as well as sell covered calls for income when a stock gets near the top of the recent range.

In this issue, I highlight a covered call in a solid defensive stock that has recently rallied near the high point of the recent range. It’s a terrific way to get a high level of current income at a time when the market isn’t giving much else.

This year stunk. Next year should be better. Remember that if the market falls to a new low early next year.

There are some very good reasons to believe the market will turn around in 2023. Stocks trend higher over time. The average bear market lasts around 15 months. This one is almost a year old. Of the seven negative-returning calendar years for the market since 1980, five were followed by years of returns of over 20%.

The recent market rally has leveled off and is wavering. The next few days may determine whether the market rally continues, or the indexes retreat once again.

The latest upturn has been stoked by optimism over retreating inflation and a softer, gentler Fed. The Central Bank is widely expected to raise the Fed Funds rate at a slower 0.50% pace, versus the last four hikes of 0.75%, at the December meeting in two weeks. But Chairman Powell is giving a speech today. Any indication of a higher-than-expected hike will undo the major reason for the recent rally.

Explorer stocks were mixed this week as Asian stocks struggled amidst increased U.S.-China economic tensions and concern over Chinese economic growth.

Commodities are back but something to keep in mind was mentioned to me by a friend in the energy business: “America is running out of shale oil.” This has big implications for world oil markets and America’s energy mix since if we are running out of the shale oil that can be extracted at about $60/barrel, higher oil and energy prices are around the corner.

The market is making some noise so far this year. And in a good way. The S&P 500 is 7.7% higher and the Nasdaq is up 14.7% YTD. Is this real, or just another head fake?


The rally is being prompted by increasing optimism of a soft landing, where inflation falls without the economy falling into recession. Previously pessimistic pundits are now embracing the possibility. And there is some evidence to back up the soft-landing scenario.