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This week was all about the Fed. But those of us watching small caps noticed some major news too – the S&P 600 has broken out to its highest level in just over a year.

The catalyst was the Fed’s fully expected 25 bps cut yesterday. It was less of a hawkish cut than expected and included a commitment to buy $40 billion in short-term Treasuries to ease money-market strains that emerged after halting balance-sheet runoff.

Prior to that announcement, the index was toying with a breakout, but afterward it shot up and closed 2.4% higher on the day.

A couple of weeks ago we discussed the likelihood that the “all things AI” momentum trade would sooner or later lose luster. I called into question the tenacity of some of 2025’s top-performing tech stocks while also speculating that some of this year’s wayside laggards would launch a return to prominence in the coming months.

As you’ve probably surmised by now, I’m not the world’s biggest fan of buying stocks that are coming off fresh 52-week lows, preferring instead those that have carved out a decent bottoming pattern—both in terms of price and sentiment. Nor, for that matter, do I tend to favor buying stocks that are so far out of favor with investors that continued selling pressure is still an ever-present possibility.

But sometimes a stock becomes so cheap, so out of favor and so “wound up” with short interest and capitulation that the temptation to do some bottom fishing is simply too great to pass up. This is especially the case when the turnaround story is so compelling that it practically writes itself. Such is the case with this month’s featured recommendation, Helen of Troy (HELE).

The S&P 500 is essentially unchanged since Thanksgiving 2014! While there have been short periods of volatility (in just the last two weeks, it’s been down 5% then up 5%!), the S&P 500 can’t seem to break through the 2,000–2,100 range. With the market stuck in this range, and banks and bonds offering virtually zero yield, how can investors get ahead? One strategy that has been working well for investors is to buy the best dividend-paying stocks and apply an options strategy called a buy-write (also known as a covered call).

Some of the strongest performers in the small-cap health care space are small-cap medical device stocks. And these three are soaring after earnings.

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

We briefly comment on how the response by hedge funds to the Reddit trades may have led to last week’s sell-off and this week’s rebound in the stock market. Is there a bubble? Yes, and our note touches upon how all four ingredients of a bubble, outlined in a recent book on bubbles, are in place.



Earnings season is upon us. We review the reports from Dow (DOW) and JetBlue (JBLU), and look forward to six more reports in the coming week.



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.

There’s no doubting the dominance achieved by mega-tech companies like Facebook, Amazon, Netflix, Google and the other members of the “FANGMAN” club (Microsoft, Apple and Nvidia). Over the past decade or two, these have created entirely new industries, grown to unprecedented size and rewarded shareholders with vast profits. And, like all of the technology companies that preceded them, they have reached their peak potential.

Election season is now in full swing. In less than seven weeks, or only 49 days, the country will select its next president, representatives from all 435 House congressional districts, 35 senators and 12 state governors.

Stop-losses, or more fully, stop-loss orders, are trading orders that are placed to execute a sale automatically if a stock falls below a specified trigger price. The idea is that these orders can prevent a small loss from becoming a large loss. It can also be used to lock in profits.

Last week, we wrote about how lower quality, in both home appliances and tangible money, debases value and is a form of inflation. Today’s note includes some of our current views on inflation and capital markets, and what investors can do to help mitigate inflation’s effects on their portfolios. The goal, of course, is to protect the long-term purchasing power of investment assets.

Just reading those words, “climate change,” is almost certain to light up emotions. Regardless of one’s opinions on the degree of urgency and which of a very wide range of proposed policies and actions should be taken, how could words about the end of the world as we know it not ignite emotions?

Mike Tyson inadvertently offers sage advice for investors. We add a new Buy, two stocks are approaching our price targets so we put them under review, and one stock surges following a shareholder-friendly payout announcement.

Some time ago, there was a television show with the above title that pulled viewers back into the 1970s. It used that earlier era to create a somewhat unique vibe that inadvertently highlighted how much has changed in our world over the decades.

A few weeks ago, at the annual Morningstar Investment Conference in Chicago, two investing icons debated the merits of value versus growth. On the value side was Rob Arnott, founder and head of Research Affiliates, with Cathie Wood, founder and head of ARK Investment Management, on the growth side.

The market seems to have settled into complacency. We’re in a period after first-quarter earnings reports and government statistics indicate a surging economy, yet investors rightfully wonder if or when the Fed will raise interest rates and are starting to consider what happens after the post-pandemic boom.

Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the November 2023 issue.

We discuss recent earnings from our companies and move shares of Sensata Technologies (ST) from Buy to Hold given the company’s lower overall quality compared to our initial understanding.

We also include some thoughts on the current stock market and how rising interest rates and other factors have led investors to unload shares of most companies and riskier companies in particular.

Thank you for subscribing to the Cabot Value Investor. We hope you enjoy reading the February 2024 issue.

Spin-offs should be in every value investor’s toolkit. In this issue, we are adding a spin-off, Worthington Enterprises (WOR), to our Buy recommendations roster.

We comment on recent earnings from Comcast (CMCSA) and provide updates on our other recommended stocks.

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.

This week’s note includes our comments on Goodyear Tire (GT), Warner Bros Discovery (WBD) and Berkshire Hathaway (BRK/B), which reported late last week. It also includes comments on the 12 companies that reported earnings this week: Bayer AG (BAYRY), Brookfield Reinsurance Ltd (BNRE), Dril-Quip (DRQ), Elanco Animal Health (ELAN), Goodyear Tire & Rubber Company (GT), TreeHouse Foods (THS), Six Flags Entertainment (SIX), Viatris (VTRS), Toshiba (TOSYY), Volkswagen AG (VWAGY), Warner Bros Discovery (WBD) and Western Digital (WDC).

Current Market Outlook


After trading in a tight range for nearly two months, the major indexes were clobbered last Friday; most fell below their 50-day lines and a couple hit their lowest levels since Brexit. The action should certainly be respected—we’re knocking our Market Monitor down a couple of notches—but it’s important to look at all the evidence. While the intermediate-term trends are mostly sideways at this point, the longer-term trend is still up, the broad market isn’t falling apart as it would at major tops, and many individual stocks are pulling back normally so far. Overall, you should take things on a stock-by-stock basis, selling stocks that crack but giving others a chance to hold support and resume their advance. Overall, we remain optimistic, but picking your spots is important, and the next few days should be telling.



This week’s list includes many resilient stocks from a variety of sectors, which is a positive sign. Our Top Pick is Las Vegas Sands (LVS), a big-cap turnaround stock that has just lifted off following a huge bottoming effort.

Stock Name	Price	Buy Range	Loss Limit
Urban Outfitters (URBN)	0.00	35-36.5	32-33
Twilio (TWLO)	183.39	54-57	47.5-49
Tempur Sealy (TPX)	85.53	78-80	70-71
PDC Energy (PDCE)	0.00	64-66	59-60
MercadoLibre, Inc. (MELI)	980.83	174-178	160-161
Las Vegas Sands Corp. (LVS)	0.00	55-57	50-51
GrubHub (GRUB)	140.03	38.5-40.5	35-36
Callon Petroleum (CPE)	0.00	14-15	12.5-13
Burlington Stores (BURL)	193.95	80-82.5	74-75
Alibaba (BABA)	254.81	95-100	89-90