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ThredUp (TDUP), Sportradar (SRAD) and Alamos Gold (AGI) Report

Today brings the third installment about my recent 17-day 4,218-mile road trip to and through the American Midwest and back—which I’m presenting not chronologically but thematically. Today’s theme is art, not least because my wife is an artist, and the one concrete reason for this trip was an opening reception at the “Minnesota Center for Book Arts” in which she had work.

The Federal Reserve, America’s central bank, raised its benchmark rate a half percentage point yesterday as assets that investors perceive as safer were among those to rally. While macro issues such as inflation and interest rates are certainly important, in the end it will be company performance relative to expectations that will be decisive.

Even if inflation may be peaking at levels last seen four decades ago, the key question is whether these levels are transitory or sticky and likely to come back to earth slower than many imagine.

Explorer positions had an up week as the S&P 500 has begun a turnaround from bear market territory and is now down “only” about 13% for the year. This means it is up around 6% since hitting its recent low on May 19 as the Fed has softened its tone and China tries to get growth going.

Electric vehicle sales are set to more than triple to just over 20 million in 2025, according to BloombergNEF. This is up from a previous estimate of 15 million.

Some of you might have been a bit alarmed at the message attached to last week’s issue that the next issue will be out January 7, 2021. But today we have an update and rest assured, I’ll be following the Explorer portfolio next week and will send an alert if anything unusual happens. I will also have another update and some portfolio changes the following week.

The best way to make big money in growth stocks is to invest in fast-growing companies in fast-growing industries, and ride the major trends for as long as they remain up. In 2007, the biggest trend - still ongoing - was the rise in solar power stocks. And next year? Here are my five best guesses for the trends that will reward investors in 2008.

Explorer stocks held their ground this week as we move two positions to a hold. Don’t be too discouraged. S&P 500 stocks struggled in the first half of this year, roughly equal to that of 1970. That year the S&P 500 fell 21% in the first half and then gained 27% in the second half. Let’s hope 2022 follows a similar pattern.

This rise of the U.S. dollar against the yen, euro and pound as well as most other currencies in the world is a mixed blessing for investors. You can take your capital gains and head to Europe or Japan for a trip and imported goods will be cheaper. On the other hand, American companies and stocks will be hurt by their exports being more expensive to overseas buyers and their overseas earnings will be worth less in U.S. dollars when brought back to America.

Markets continue to at best tread water. Yesterday, markets performed better as the Nasdaq Composite ended a seven-session streak of declines.

Kraken Robotics (KRKNF) shares were up 20% in their first week as an Explorer recommendation as the company signed a follow-on contract to supply additional KATFISH™ for the NATO Navy’s new mine hunting vessels.

I’m in Amish country this week so the Cabot Explorer issue will be briefer than usual today. Markets are facing a 5% dilemma. The benchmark Treasury yield closed just above 4.9%, a fresh 16-year high.

Third-quarter GDP estimated growth may be above 5%, signaling that inflationary expectations are still strong.

The market will likely turn broadly positive when expectations are that interest rate hikes are over – and lower rates may be around the corner.

Note: This is our final issue of Cabot Stock of the Week this year. Next week we get a little “vacation.”

But rest assured we’ll be keeping an eye on the market, where market trends remain very positive as we head toward the end of the year.



Today’s recommendation is a low-risk water company in a foreign country, so it may be the perfect diversification move if you’ve got a lot of U.S. growth stocks.



But to fit it into the portfolio, we’ve got to sell something, and the victim this week is Eli Lilly (LLY), which has brought us a decent profit in a fairly short time.



Full details in the issue.

Cannabis stocks are generally flat since I sent you the March 27 issue of Cabot Cannabis Investor.

Given the potential magnitude of near-term catalysts, I suggest continuing to hold exposure to the group, and accumulating on weakness. If you have zero exposure, consider buying some now. If you have full exposure, consider adding on any substantial weakness of 2%-4% or more in this highly volatile group.

The good news today is that the broad market is looking healthier than it has in many months, thanks to a resurgence by growth stocks.
The bad news is that we still can’t say that cannabis stocks are truly in an uptrend yet—but they might be!

It’s certainly been an interesting holiday-shortened week, with the market continuing its recent plunge into Thursday, when Russia’s invasion of Ukraine caused a maelstrom at the open, with the major indexes diving to new correction lows—before they staged a rare, dramatic rally to close higher. This morning it looks like the market is going to open modestly lower.

Today’s note includes ratings changes, the podcast and the Catalyst Report. We publish the Catalyst Report on the Friday after each monthly issue of the Cabot Turnaround Letter.

“Bear markets are for building” is a popular phrase among crypto enthusiasts, which, coupled with a pending upgrade, makes now the perfect time to accumulate ETH.

Many new crypto projects will turn out to be nothing but “vaporware,” but this Layer Two cryptocurrency holds promise in Q4 and beyond.

After four weeks of straight-up action, the major indexes and most leading (and potential leading) stocks are basically holding firm, with the S&P 500 and Nasdaq relatively flat on the week.