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Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the February 2022 issue.



The market seems to be ignoring small- cap stocks. We highlight four high-quality small- cap companies with beaten down share prices. And, amidst the rubble of initial public offerings, we found three worthwhile companies whose shares trade below their IPO price. We also briefly comment on the market’s recent sell-down, and provide an update on the performance of our group of recommended stocks, which have held their value so far this year.



Our featured recommendation this month is Polaris (PII), the leading North American manufacturer of powersports equipment including off-road vehicles, snowmobiles, motorcycles and boats. Investors are overly -discounting near-term issues, leaving the shares significantly undervalued.



We note our recent price target increase for Baker Hughes Company (BKR), from 26 to 31.

The success of headliners Walmart and Target in the last week has helped drive consumer staples stocks as a group up nearly 5% in August. No other S&P 500 sector has performed better this month. And yet, consumer staples are “only” up 14% year to date, trailing the gains in the S&P 500 (17.3%).

Thus, the sector as a whole is still undervalued. That spells opportunity.

Inflation is dead.

OK, it’s not “dead.” But at 2.9% in July, as reported Wednesday morning, it has now (narrowly) reentered the Federal Reserve’s magical 2% realm for the first time in nearly three and a half years – since March 2021. For all the inflation angst during those past three and a half years, the market has fared pretty well overall – the S&P 500 is up 30% since the first CPI print north of 3% was reported in mid-May of 2021. On a per-year basis, that only slightly trails the average annual return in the large-cap index of 9.9% since its inception in 1928.

This is the 13^th bull market in the S&P 500 since 1950. If it ended today, it would tie for the shortest – just over 21 months – with the last bull market, the post-Covid-crash rally that began in March 2020 and tidily peaked at the end of 2021. The average bull market, according to statistics from Ryan Detrick of Carson Investment Research, lasts 65 months.

Does that mean this one can’t up and fizzle right now, taken down by a “carry trade” in Japanese equities, one bad U.S. jobs report, and a whole lot of political (presidential election) and social (war in the Middle East possibly spreading) uncertainty? Of course not. We know a bull market can last only 21 months because we just saw it happen.

The expiration of our December covered calls is today, and I’m happy to report that four positions (GM, PINS, YETI, CGC) are closing for max profits

Investors appear concerned that ExxonMobil Corp. (XOM, NYSE) might have paid too much for XTO, while some have expressed concerns that the new assets increase the profile of natural gas in Super Oil’s production mix. The market has vastly overreacted to both concerns, furnishing savvy investors with an excellent opportunity...

Nine weeks ago, as the marijuana sector was completing what looked like a climax top, I took the risky step of taking partial profits in ten of our stocks, moving to a 45% cash position.

Wondering how to get started with mutual funds? There’s something you need to know first (that we’re sure your broker won’t like).

Marijuana stocks are looking a bit overcooked after a major rally. But my favorite marijuana stock today is actually undervalued despite the big run-up.

Investing in your own country has long been the comfortable way to buy stocks. But the world is changing, and you need global stocks in your portfolio.

The emerging markets healthcare boom is in full bloom. And there are two mainstream ways to invest in this burgeoning trend.

Warren Buffett just gave an interview saying people should buy stocks now. It should serve as a flashing green light for any long-term investor.

No one likes paying taxes. To give you a better perspective on what your taxes mean, here are 20 quotes about how they contribute for the good - or bad.

If you want to spread out your dividend payments, an ex-dividend date calendar is a handy way to keep track of all your payments.

Bitcoin and other forms of blockchain have gone mainstream. And these four cryptocurrency ETFs will help you profit from the wave.

I want to pay off my mortgage early, but there are pros and cons to doing so. And if you’re an options trader, there’s a better alternative.

All of us should be saving for retirement. But if you want to protect your money from inflation, you should be investing for retirement.

Two options trading strategies can help any investor create yield that far exceeds traditional avenues: Covered Calls and Writing Puts.

Want a hedge against volatility and ongoing inflation? Try these two timber investments, which capitalize on an evergreen industry.

If you look closely enough, there are signs that a bear market might not be far off. If the bull market collapses, you’ll want to own this low-risk stock.