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Ideally, you want to invest in industries where the dominant factors are positive, where booming demand for products and services means revenue growth is rapid and profit margins are high. Trouble is, in the current market climate, the best growth stocks, which have enjoyed great advances earlier this year, are in retreat. Buying them is a high-risk proposition. But there is one exception, and it’s interesting enough to discuss here.

Markets are a bit jittery despite strong earnings and expected strength as America opens up its post-pandemic economy. China is already at a 5% growth path while India, Japan, and other important economies struggle to get the pandemic under control.

I bank at one of the larger banking institutions in this country and have kept my account there for a number of years. My loyalty has been tested lately, though, on more than one occasion. My problems, though, are minor compared to bank customers who have over-borrowed and cannot keep up with the required payments on their credit cards, loans, or mortgages. And therein lies the crux of the entire problem. For the past 25 years, consumers have been borrowing too much so they can enjoy the good life. State and local governments have been borrowing too much so they can provide more and more services. And now the U.S. Government is running huge deficits to help prop up a troubled banking system and a sinking economy.

For great growth, you’ve got to invest in today’s revolutionary stocks that have the potential to become tomorrow’s blue chips.

Current Market Outlook


Sellers finally landed a few punches last week, with many tech-related growth stocks finding resistance and the big-cap indexes losing a little ground. Given the big run of late, lots of speculation and signs of greed, we have our antennae up for abnormal weakness—but so far, there hasn’t been much (if any), with the pullbacks in the indexes and individual stocks appearing normal and other timing indicators (number of new lows, etc.) looking fine. In fact, some solid entry points could appear with a bit more weakness! We are seeing continuing rotation into more cyclical areas and out of some growth names, but the trends of just about all indexes and leaders are up, so we remain mostly bullish.

This week’s list has stocks from many different nooks and crannies of the market. Our Top Pick is Guardant Health (GH), from the strong medical area, as it’s come under major accumulation this year. It’s a bit extended so start small and/or aim for dips.

Stock Name	Price	Buy Range	Loss Limit
Cimarex Energy (XEC)	49.1	44.5-47.5	39.5-41.5
Enterprise Products Partners L.P. (EPD)	23.3	22-23.5	19.5-20.5
Farfetch (FTCH)	58.8	56-58.5	51-52.5
Guardant Health (GH)	160.0	152-162	132-137
Halozyme Therapeutics (HALO)	48.3	45-48	40-41.5
Shake Shack (SHAK)	111.7	106-110	91-94
Sonos (SONO)	27.0	25-26.5	22-23
TG Therapeutics, Inc. (TGTX)	50.2	46.5-49.5	41-42.5
The Timken Company (TKR)	85.0	81-85	74-76
Upwork (UPWK)	40.7	37.5-40	33.5-35

ESG investing is a way to invest without sacrificing certain morals or ethics. But can you make money investing that way?

The message I have for you today is this: Make sure you have a system—or a well-thought-out plan—and follow it, no matter how unusual/scary/crazy the world gets. Cabot Growth Investor has a great system (plug alert!), but I don’t pretend to have the Bible when it comes to investing. What’s most important is that you stay grounded and follow sound principles that work year after year. Don’t overreact to the latest blip up or down in the market.

You should have an advisory that will get you out of the market and into cash when the tides turn against you.

Cabot Top Ten Trader, our weekly advisory, details the strongest stocks of the previous week.

Today, I’m going to serve up a company that has appeared in both Cabot Top Ten Trader and Cabot China & Emerging Markets Report.

Right now, I think there are some very convincing signs that Chinese stocks, which have been about as popular as used gym socks for a number of years, are about to turn around in a massive way. One Chinese social media giant in particular seems to be gaining momentum.

All of the stories on financial greed teach the same lesson: if it seems too good to be true, it probably is.

Want to feel better about yourself as an individual investor? Consider these classic investing mistakes - some of which weren’t actually “mistakes.”

As a growth investor, my investment horizon is considerably shorter. The portfolio I manage (for the Cabot China & Emerging Markets Report) can turn over as much as 300% a year, so I need to…

I have gone from great success to less success and back to great success (relatively speaking--I’m not able to compare myself to Warren Buffett--yet). The up, down, up cycle of life can be compared to many of the stocks that pop up as undervalued opportunities in my research analyses. I concentrate on companies with temporary setbacks, where management is taking action to correct the problem and get the company back on track.

Last week, I wrote about the misallocation of federal stimulus funds in Massachusetts and I received a lot of really great comments from readers. I’m re-printing some of the best today. Enjoy!

One thing that’s always attracted me to the stock market is that it has a long and storied history. One of the most discussed themes in market history has to do with October--specifically, that October is a month that the market crashes.

As most of you know, I use charts on a daily basis, but I hesitate to call myself a technician. But there is a tenet of technical analysis that is worth remembering: The longer the base the longer the race.

All things considered, the past week has been tame. The S&P 600 Small Cap Index retreated 1.4% to get back to its 50-day moving average, while the S&P 500 Index traded sideways.