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In our August 24 note, we commented that the current stock market felt like the scene in the 2000 movie “The Perfect Storm” in which the fishing boat Andrea Gail, after an intense battle with the storm, finds herself in calmer waters lit by rays of sunshine.

Stocks, of course, continue to tumble. Investors’ plates are overflowing with fears ranging from inflation to trade/military wars to financial collapse to the upcoming midterm elections in the United States.

Since the effective federal hemp-derived THC ban was approved in the latest budget deal, cannabis investors have taken the change as a sign the Trump administration is no longer serious about rescheduling.

This is probably wrong. Cannabis sector CEOs closer to the rescheduling process than most investors think the sector-changing reform is still on track.

You know you need to save for retirement and finally took the plunge and made your IRA contribution… what do you do now?

From Adrian Day’s Global Analyst: “HSBC Holdings plc (HBC) continues to recover from the U.S. subprime mortgage fiasco, with profits doubling in...

If you’ve been listening to our warnings about risk control over the past month, you were probably able to minimize the damage.

Alternative Asset Managers KKR (KKR) & Ares Management (ARES) are doing something interesting. They are making one profound change that you can profit from.

Dividend reinvestment is one of the most powerful weapons in the income investor’s toolbox.

The momentum for emerging market stocks in general, and Chinese stocks in particular, has taken a big turn for the worse.

Short selling stocks is controversial–and not appropriate for all investors–so if you’re considering the practice, here’s everything you need to know.

Here is the August 2020 issue of Cabot Undervalued Stocks Advisor.

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. It’s earnings season, and in this issue we review fresh reports from MKS Instruments (MKSI), Tyson Foods (TSN), Columbia Sportswear (COLM), Amazon.com (AMZN) and Marathon Petroleum (MPC). Marathon also announced a deal to sell their Speedway retail gas station business for $21 billion in an all-cash deal, which we discuss.



As a newsletter looking for undervalued stocks in a market full of enthusiasm for only a select few mega-sized tech companies, we almost feel a moral obligation to highlight contrarian ideas. In this issue, we recommend a stable but meaningfully out-of-favor company that has the potential to provide solid long-term returns. “Out-of-favor” implies that it doesn’t have the immediate profit potential of a “digital economy” stock, but that lack of zest produces the opportunity. With low expectations comes upside surprises. We believe global beverage company Molson Coors (TAP) fits the bill.



You may notice that we are tweaking some of the components of the Cabot Undervalued Stocks Advisor letter. For example, we’re bringing back the portfolio tables to every weekly and monthly issue. A “Hold” rating means that we believe the stock is fine to hold in the portfolio, but that the risk/return trade-off isn’t compelling enough to warrant a “Buy” nor unfavorable enough to warrant a “Sell.” Also, for the monthly issue, we may not always have a “Feature” stock in each portfolio – that doesn’t mean we don’t like any of the names, it probably just means that we featured it recently and want to avoid being repetitive to save you time and effort.



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.

In today’s issue, we’re adding a reliable new stock to the Safe Income Tier. I also review why you might want to own preferred stock in today’s educational section, and provide updates on all our holdings.

As a practitioner in the investing world, I find theoretical debates to be sometimes interesting but usually not highly applicable to my work. This mirrors a favorite saying of mine, attributable to Albert Einstein: “In theory, theory and practice are the same. In practice, they are not.”

Here is your summer issue of Cabot’s 10 Best Marijuana Stocks, with updates on the industry as a whole as well as all the important fundamental developments regarding the stocks in the portfolio.

In general, I remain very bullish on the marijuana sector long-term. I’m impressed by both the creativity demonstrated by the management of these companies, and the appetite for investment in the sector, by both individual investors and private equity. The future is bright.

On a recent trip to the local shopping district near my house, I noticed that a staple of the neighborhood--the local movie rental store--had closed. I suspect the closing has a lot to do with the lack of people renting at locally owned video stores. Now I’m seeing a Netflix subscription in my future. It’s not that I’m against the online movie rental giant, but I liked the character of my local video store. Whatever my feelings about the company, it doesn’t change the fact that Netflix (NFLX) has transformed the movie rental business with its online platform. In fact, it was featured in Cabot Market Letter just a few weeks ago.

Overall, we continue to see many signs that the market is transitioning from a bear phase to a bullish phase—sentiment is horrid, stocks have refused to break down on the worst of news (i.e., Bear Stearns) and the indexes have held above support for many weeks. However, when it comes to buying individual stocks, there are few options—steel and some oil stocks remain in favor, but for every stock that pops its head up, there seems to be another that gets slapped down. Bottom line, it’s still not a time for aggressive buying, but picking up a few shares of potential leaders during pullbacks can still work out. Just don’t go overboard! This week’s Top Ten is commodity-heavy, with a few growth-oriented names sprinkled in. Our favorite of the week is Comstock Resources (CRK), which staged a good-looking breakout last week. We think you can pick up a few shares on weakness.

Stock Name	Price	Buy Range	Loss Limit
CLF (CLF)	0.00	110-125	-
CLR (CLR)	0.00	29-33	-
CRK (CRK)	0.00	35-39	-
ILMN (ILMN)	0.00	68-74	-
MT (MT)	0.00	79-83	-
OI (OI)	0.00	53-56	-
PQ (PQ)	0.00	15-17	-
RIMM (RIMM)	0.00	130-140	-
STLD (STLD)	0.00	31 1/2 - 34 1/2	-
TNE (TNE)	0.00	21-25	-