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If you watched my Stock Market Crash Course video on Friday, you know that we’re in for more volatility this summer. Volatile markets are stressful for many investors, who don’t like seeing their stocks bob up and down indecisively. Not to mention that a lack of direction in the...

Stocks struggled back from early losses yesterday after blue chips posted their biggest two-day gains in more than two years.

Explorer stocks had a good week with most up nicely and Infineon (IFFNY) up about 18%.

Perhaps the best indicator of where the U.S. and global economy is going are commodity prices. For example, copper prices are gaining ground though they are still far from highs reached earlier this year.

Centrus Energy (LEU) was steady this week as Congress seeks another $1.5 billion in a government funding bill to boost domestic supply of uranium to offset lost Russian fuel.

Ford (F) shares rose 7% this week as its October U.S. sales declined by 10% but electric vehicle (EV) sales rose nearly 120% year over year. It now claims to be the #2 EV seller in America behind Tesla.

November through most of January was relatively smooth, but we’ve seen more cracks over the past month—especially this week, as growth stocks have come under severe pressure. To be fair, our trend following indicators are still positive, so we’re not selling wholesale, but we’re not letting stocks get away from us on the downside, either.

Earlier this week, we cut bait on CrowdStrike, and tonight, we’re letting to of NovoCure, taking small profits in each. Our cash position will now be around 40%, and as always, we’ll remain flexible going forward, prepared to either put money to work (if this is another short-term shakeout) or raise more cash (if a “real” correction unfolds.)

The long-awaited correction has begun, and it’s been a doozy, driving the major indexes and many stocks dramatically lower; our Cabot Tides turned negative on Monday, and despite coming into the week with 17% in cash, we’ve been paring back quickly, selling all of Inphi and taking partial profits in both Vertex and Sea Ltd, leaving us with 36% in cash. And going forward, we have a few names on tight leashes should the selling continue.

That said, it’s not all doom and gloom; our Cabot Trend Lines are still positive, and many leading stocks, while dented, are hanging in there (including some we own). The odds favor this correction needing more time to finish up, but the odds also favor the overall bull market still being intact.



In tonight’s issue, we dive into all of our stocks, highlight a few we’re watching, and talk about one sector that, despite this week’s maelstrom, seems to be in position to thrive during the market’s next sustained upmove.

Note: Due to the celebration of Independence Day next week, the next issue will be delivered Tuesday, July 5.
The market rallied strongly last week, erasing some of the carnage of the previous two weeks, but the main trend is still down and thus caution is still advised.


This week’s stock is a growth company that serves the solar power industry, and the stock looks attractive now because it’s basically been treading water for 17 months.


As for the current portfolio, which is 25% in cash, there’s one Sell.


Details in the issue

We remain in a confirmed bear market, so caution is still appropriate.
But there’s always something interesting to consider buying, and this week’s recommendation is a young stock with a good story, which involves helping the oil and gas industries use water more efficiently.


As for the current portfolio, which is 25% in cash, there’s one Sell.


Details in the issue.

In tonight’s issue, we go over all our recent moves, dive into the recent action in one of our stocks and review one of our proprietary indicators that, along with some precedent analysis, adds further evidence to the market’s bullish outlook.

It’s been over a month since the major indexes hit their peaks, and while there’s been no major move to the downside yet, the odds of one grow with time, particularly considering that we’re still in October (often a difficult month). Thus, I have no trouble recommending a slightly more cautious attitude at the moment.

But there’s always something attractive to buy, and this week it’s another stock in the vast and complex semiconductor industry. This will be our fourth in the industry.



As for selling, I’m working to hold a bit of cash until the climate improves, and the easy choice to sell today is our biggest loser, Global-E Online (GLBE).



Details inside.

Stocks continue to hold the line, even as the dual tidal waves of America’s involvement in the Iran-Israel conflict and the fast-approaching tariff deadlines threaten to submerge everything. Until that happens, though, we should invest in the market in front of us, not the one we think could materialize. And so today, that means going back to the growth well and adding a medium-sized software offering from Cabot Early Opportunities Chief Analyst Tyler Laundon to the portfolio.

Details inside.

Between the expansion of the war in the Middle East, a U.S. dockworker strike that could slow the supply chain again, and the uncertainty of a too-close-to-call presidential election next month, there are a lot of headwinds out there serving to counterbalance the good vibes created by last month’s Fed rate cut. Add in the fact that we’re in the traditional “spooky season” of October – the month in which the market has bottomed in each of the last four years – and it’s a good time to add some security to your portfolio.

So today we do just that … by adding a well-known home security company to our Buy Low Opportunities Portfolio. It’s been in business for a century and a half but has only been a public company for the past seven years. And with profits accelerating, the stock has become cheap.

Details inside.

Stocks took a bit of a breather this week after weeks of positive gains fueled by tariff deals and pauses, sinking inflation and a very strong Q1 earnings season. Which way the market goes from here may depend on the headlines, but also on whether the bulls have the appetite for another big push to new highs. One area of the market we know is working? Precious metals. Gold has attracted most of the attention. But silver is starting to play catch-up. So today, we add a high-upside silver play via Cabot Explorer Chief Analyst Carl Delfeld.

Details inside.

We may hate to talk (or even think) about it, but we all understand the importance of proper estate planning. And if you’ve spent a lifetime accumulating assets to pass down to those you love, the next best thing you can do is to make sure you’ve taken the right steps to avoid leaving your heirs with a headache on top of their inheritance. This month, let’s explore the steps you can take right now to help make sure your wishes are honored and that your family doesn’t spend months or even years duking it out in court.

It was a better year for value stocks, as the Vanguard Value Index Fund (VTV) is up 14.6% year to date with just a few days still to go in 2024. Barring a complete implosion this week, it will be the best year for the VTV since 2021 and the third best in the last decade. That’s good … but the last decade is quite the grim comparison.

Remote work has disrupted the employment landscape and appears to be here to stay; it’s also reshaped real estate as more and more workers are now untethered from the office. This month, let’s dive into how to take advantage of better affordability by relocating, moving for your lifestyle and not your employer, and what states will actually pay you to relocate.

A few weeks ago, we introduced the Gartner Hype Cycle, which traces the path that all tech companies follow in what essentially is an immutable law of tech investing. Currently, tech stocks have passed the Peak of Inflated Expectations and are sliding down to the Trough of Disillusionment. A few will ascend back to prosperity along the “Slope of Enlightenment” if they maintain both their relevance and their competitive edge. But most will lose one or both of these traits and thus continue downward in what could be labeled the “Decline into Oblivion.”

The upward trajectory for growth stocks that was smooth sailing in November has turned far bumpier in December.

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

Earnings season is in full gear, and we review the several companies that have reported as well as provide some expectations for those yet to report. General Motors (GM) releases its earnings on Wednesday, August 4, after our publishing deadline – this is a highly anticipated report.



Perhaps the biggest difference between value investing and growth and momentum investing is what to do when a stock price falls. Many investors using growth and momentum strategies have a discipline of selling if a stock price falls 15-20%. This may make excellent sense for these strategies but is the exact opposite of what one using a value strategy should do. With value strategies, one generally should buy when their stocks go down in price. We touch upon this more in today’s note.



I’d like to invite you to our 9th Annual Cabot Investor Conference, held online again this year, on August 17-19, that’s Tuesday – Thursday. You can see presentations by all of our analysts, which will include updates on their areas of expertise and discussions of their best picks.



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.