Search

The main trend remains up, in both the broad market and the cannabis sector in particular, but in the intermediate-term, we are now in a correction, and thus a little more caution is advised.

In fact, in today’s issue, I’m raising cash by selling portions of the portfolio’s two biggest investments, and then buying some more of one of the portfolio’s “safest” investments, if anything in this industry can be called safe.

Today’s Revolutionary Stock is Stratasys (SSYS), one of the two leaders of the 3-D printing business.

Today’s Cabot Small-Cap Confidential addition isn’t a cloud-based software provider. But it is a perfect example of what I’ve been talking about – a company in an established industry that’s shaking things up largely because cloud-based technologies are at the center of its DNA. The company’s platform is helping it grow roughly 10 times faster than its industry average, while delivering profits.
It’s an exciting story that I’ve been looking forward to sharing with you. Enjoy!

While the market officially remains in a downtrend, various indicators in recent weeks, combined with terrible news and sentiment, tell us the market bottom may have passed. But until we see real strength, continued caution is advised.
Today’s recommendation may be too aggressive for some readers (it’s a semiconductor company, and we all know they can be volatile) but it has a good story and chart and I think it’s worth the risk.


As for the portfolio, there are no sales, just one downgrade to Hold.


Details in the issue.

It’s been a highly unusual market environment, with the overall market grinding slightly higher, but with growth stocks generally under pressure as more leaders crack or test key support. We continue to think great things will happen when looking out a few months, but we also have to deal with the here and now and have been shedding names as they act abnormally, giving us a cash position north of 50%. We’d prefer to have that lower, but are holding it tonight, waiting for at least some support to show up before putting some of it back to work.

Different investment styles have different objectives and require different rules. Value investing looks for undervalued stocks.

The iShares EM Fund (EEM) has been through a bad week, pulling it decisively below its 25- and 50-day moving averages. It’s a clear red light, and we’re taking action to reduce our exposure while we await both quarterly earnings reports from our holdings and a return of the buyers to emerging market stocks.

Remain bullish, but keep your antennae up. We’ve seen repeated bouts of selling in leading growth stock so far this month, but a few yellow flags have appeared. We’re holding our 16% cash position and placing two positions on Hold tonight.

The market seems to have found its footing this week as the economy reopens amidst some supply shortages and inflationary pressures. Electric vehicle stocks are coming back as Ford announced a big push into EVs and its new F-150 Lightning received 70,000 deposits in just 10 days.

This week there were no earnings reports or ratings changes.

The market remains challenging and divergent, and few growth stocks look ready to start a sustained upmove just yet. But the evidence has slowly improved since the start of the month, including the fact that our Cabot Tides (which have admittedly been on-again, off-again of late) have returned to a bullish stance. We don’t think it’s time for a major buying spree, but we are putting some of our large cash hoard to work by filling out one of our positions and starting a small stake in a new, resilient growth name. Last but not least — all of us here at Cabot wish you and yours a happy, healthy and prosperous New Year.

This week we will add an American energy company engaged in hydrocarbon exploration and pipeline transport, EQT Corp. (EQT).