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Ahead of the “big” Federal Reserve announcement on Wednesday, the market surged higher last week.

The ridiculously poor sentiment of the last few weeks leads me to believe the market’s next big move is up.

There was a lot going on in the market this week but news flow from our portfolio holdings was relatively quiet.

The iShares EM Fund (EEM) has rebounded sharply and is well above both its 25- and 50-day moving average. That keeps the Buy signal in the Cabot Emerging Markets Timer shining brightly. We have one rating change tonight.

“Too big to fail” has warped capitalism—privatizing profits, socializing losses, and eroding trust in markets and democracy. But it can be fixed.

The main trend remains up, in both the broad market and the cannabis sector in particular. When these uptrends will end, no one knows, but I guarantee that they will someday.

Long-term, however, I remain very bullish on both the companies and the stocks in the industry and continue to adjust the portfolio’s holdings to optimize growth (with reasonable security.)

It’s the same basic market story as it has been for the last four months. Technology is floundering while other sectors are killing it. But a couple of events occurring this week could potentially change the dynamic.

Cabot Global Energy Investor will pinpoint profitable investments within the energy sector.

The CBD industry is red-hot - and so are CBD stocks! Here are five you should buy now - and one you should avoid at all costs.

A year ago I wrote why you should sell Apple (AAPL) stock. It has fallen quite a bit since, but I still think there’s more downside ahead. Here’s why.

The recent problems at Toyota, combined with the stock’s collapse, have bargain-hunters asking if the stock is a good buy.

Find out the criteria for the S&P 500’s dividend that is most likely to be cut

There are investment options for tax-advantaged yields despite coming changes in dividend tax laws.

There’s no question that last Thursday’s and Friday’s show of support in the major indexes and many stocks (especially growth-oriented stocks) was a positive sign—it tells you big investors are still interested in buying on weakness at or near support levels. (Many stocks found support near their 50-day lines.) That continues to bode well for the intermediate- and longer-term uptrend. That said, there are still question marks in the short-term—there’s been lots of distribution since mid-May, especially in many defensive and interest rate-sensitive areas, and sentiment remains a bit complacent. By all means, you should hold onto your top performers, but for now, we continue to advise caution when it comes to new buying (keep positions small) and holding some cash.

Perhaps the most impressive thing we saw this weekend were our own screens—this week’s list has a ton of great-looking charts despite the market’s recent sloppiness. Our favorite of the week is Parexel (PRXL), which remains in a tight, controlled uptrend and has great growth prospects.

Stock Name	Price	Buy Range	Loss Limit
Salix Pharmaceuticals (SLXP)	0.00	59-61	52-54
Pioneer Natural Resources (PXD)	0.00	139-144	129-131
Parexel Corp. (PRXL)	0.00	44-46	41-42
OmniVision (OVTI)	0.00	18-19	16.5-17
MercadoLibre, Inc. (MELI)	980.83	113-118	103-105
EQT Corporation (EQT)	0.00	78-82	74-75
Electronic Arts (EA)	0.00	21.5-22.5	19.5-20.5
Ctrip.com International Ltd. (CTRP)	34.94	30-32.5	27-28
Conn’s Inc. (CONN)	0.00	51-53	46-47
TD Ameritrade (AMTD)	0.00	22.5-23.5	20.5-21

In our continuing series on deciding how many positions to hold in a stock portfolio, let’s borrow a page from Major League Baseball (MLB). The methods that these teams use managing their players can be applied to investment portfolios.

We’ve written about inflation in the past two letters and promise that we’ll stop with this letter, unless some major news on this front emerges. Yet, what keeps us on the topic is commentary from brokerage firms and media outlets saying that the market is fully discounting the arrival of inflation. If inflation is here to stay, at perhaps a rate greater than, say, 3-4%, then the market is not discounting its arrival.

It’s not news that the stock market has been sloppy lately. After the steady march upward to a doubling of the S&P 500 from the early 2020 low, and a 33% increase from year-end 2019 before the pandemic, one can hardly be disappointed in the market’s performance.

The rich get richer. Now, you can too.

Growing businesses with big ambitions need large amounts of money to grow and expand to the next level. But these enterprises can’t get the necessary capital from stodgy and risk-averse bankers. And they are still too small to access the capital markets by issuing stock or bonds. Thus, they are forced into the domain of wealthy individuals and institutions that have money and are itching to reap high returns.

These venture capitalists provide desperately needed money to up-and-coming businesses that can’t get it anywhere else. Thus, they are in a position to negotiate very favorable terms for themselves.

As financial markets have grown in sophistication, venture capital investing is no longer the exclusive domain of the wealthy. There is a little-known class of security that enables regular investors to mimic the very same moneymaking strategies employed by the rich and famous. These securities are called Business Development Companies (BDCs).

In this issue, I highlight one of the most successful BDCs on the market. It pays dividends every single month, has a long and consistent track of raising payouts, and has delivered fantastic total returns.

The S&P crashed more than 5% on consecutive days last week for the first time since the onset of the pandemic. The index came within a whisker of a bear market, down 20% from the high on a closing basis.

It’s easy to get spooked out of the market these days. Few people believe the market has hit bottom when it does. Unheeded warnings play over in your mind as Judgement Day seems to have arrived. Stocks were overvalued. The trade war will cause a global recession. Excesses of the last several decades are being called. It’s time to get out of the market and save yourself.

Markets are emotionally driven in the short term. Fear and greed tend to be the dominant forces. But over time, emotions take a back seat to money and profits. When the market tanks, our emotions tell us to run for the hills. But history tells us it’s the best time to invest.

There are some truly stellar stocks in the portfolio that have generated returns comparable to the most successful stocks on the market. The problem is that these stocks are rarely cheap. But the recent market has put these phenomenal investments back within reach.

The recent panic has provided a rare entry point. Even if prices fall further before they rise, these stocks can easily make up for lost time when they move higher again. In this issue, I highlight two of the best stocks in the market to own at valuations not seen in years.

It’s a great time for income. The market is at an all-time high. The May through November period is historically a more lackluster period for stocks. Income generation is an ideal way to generate positive returns when stocks aren’t rising. But not if the stocks generating the income get knocked down by rising rates.

There is a great answer: midstream energy stocks. These are companies that transport and store oil and gas for a fee. The subsector is among the highest yielding of all income-generating stocks. And unlike many dividend stocks, they have thrived over the last few years of rising interest rates. For the most part, these stocks are not interest rate sensitive and can endure inflation or recession. They have proven to be the perfect sector to generate a high income in this market environment.

In this issue I highlight a stock that has been the very best income generator in the Cabot Income Advisor portfolio. It has been held profitably in the portfolio on three past occasions. Each time it delivered a positive total return along with several covered calls for huge income. It’s a tested and true income-generating superstar.