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Investing in nuclear energy could help beat Putin abroad, climate change globally, and the markets at home. Here’s how we start.

Cannabis-friendly states are showing strong sales growth while legalization progresses and states tamp down on the illicit markets.

2024 was another great year for the markets, but it also left us with some lasting lessons we can use going forward. So, here are the four “Dos” and “Don’ts” I’m taking away from 2024.

It’s been a relatively quiet week if you follow the major indexes, with the big-cap measures flat and some of the broader indexes down less than 1%. And that keeps the top-down evidence broadly neutral: Most indexes are trending sideways, with some (big-cap indexes, even a growth measure or two) near the top of their ranges while others are stuck in the mud. Meanwhile, things like Treasury rates, our Aggression Index and other factors remain on the intermediate-term fence.

The market’s sharp downmove has continued this week, with all of the major indexes sporting sharp losses in the 3% to 4.5% range and growth-heavy measures down another 6%. We are seeing a small bounce this morning following the jobs report (mostly in line) and some positive quarterly reports, but nothing that changes the overall picture.

The worries in the Middle East have continued to move markets in the last week, and despite some worrisome moments as well as signs of hope, the markets are little changed since we last wrote. The S&P 500 fell 0.2%, the Dow was virtually unchanged and the Nasdaq eked out a small gain.

Housekeeping: As a reminder, with the market closed on Monday, your next issue of Top Ten will come Tuesday evening, February 18. Have a great long weekend.

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It’s been a solid week for the big-cap indexes and many growth measures, most of which are up a couple of percent or a bit more, though the broad market indexes have been mostly quiet, up or down a smidge.

We’re looking at economic data that could push interest rates upward (rising food price inflation and business expansion) and we’re also looking at economic data that could push rates downward (GDP potentially falling due to China tariffs, and slowing employment numbers).

This week marked the first anniversary of our blog, The Iconoclast Investor, and I want to thank all of our loyal readers for making it such a great first year! I love having an interactive outlet for Cabot’s investing advice and really enjoy reading your responses to our posts. We’ve grown a lot in the last year and plan to keep growing in the future. Since Cabot launched the blog last July, we’ve guided you through the bear market and into a new bull market with our detailed stock chart analyses (the blog has visual aids) and ongoing commentary on the state of the market. You’ve responded by writing some very insightful comments and starting a lot of great discussions.

A difficult stretch causes us to sell two underperformers this week but we move forward today with a high-quality Japanese company at the heart of an unstoppable trend and a high-quality stock on sale.

This month we are going with a small industrial company that is showing how consistent focus on operational improvement can pay dividends.

Once thought of as a highly cyclical company with management that tended to drop the ball, execution has improved dramatically. In 2022 revenue was up 14% and EPS was up 41%.

With exposure to megatrends like infrastructure and global electrification, I see more upside ahead.

Enjoy!

The big macro news of the week wasn’t specific to small caps, but it sure helped in stopping a sliding small-cap index at its 25-day moving average line yesterday.

I’m referring to the CPI print for November, which was released at 8:30 AM ET yesterday and gave most of the major market indices a boost, with the exception of the Dow.

Stocks are on track to post gains for July as Explorer recommendations have a good week with new pick Centrus Energy (LEU) up 20% followed by Cloudflare (NET), up 15%. Now, we head to Germany for today’s pick.

This was a tough week and major indexes slid between 4% and 5% in August, their worst monthly performances since June. Nuclear energy play Centrus Energy (LEU) was a standout Explorer stock, up 56% over the last month. Today, we go to Canada for an interesting and speculative maritime robotics play.

Explorer stocks held up pretty well during this turbulent week as almost all were steady or up, with Chile’s SQM up five points. Stocks stabilized yesterday after a sharp pullback on Tuesday. While prices of gasoline are down, prices of most of other things like food, rent, and medical care are still rising. This week we dive into semiconductor stocks with a return to Taiwan for a new recommendation.

As we wrote in last week’s issue, we started to see some extremes out there when it comes to selling pressure, with a few different breadth-related measures nearly reaching levels seen at prior major lows of the past decade. And the major indexes did mostly hold their Monday lows for the rest of the week, even flashing an encouraging turnaround on Friday with a couple of minor positive divergences, before today’s pop higher. The question is how far this nascent bounce can go--so far the Nasdaq has bounced about 1,000 points after declining 3,100, and up action has been limited to just a day or so before the sellers are back at it. That can always change, of course—in fact, we think the odds are decent that it will—but our point is that the onus remains on the buyers to continue to step up to form a workable low the market can build from. In the meantime, we’re sticking with the same cautious stance, holding plenty of cash and keeping new positions small.



This week’s list is actually fairly mixed between sectors, with some commodities, some biotechs and some earnings winners. Given the environment, our Top Pick is Corning (GLW), which isn’t their fastest horse, but it has a solid business and a very good chart, having just enjoyed a nice buying cluster after earnings.

The bull market keeps rolling along, though both the Fed and a busy, star-studded earnings slate could provide a couple speed bumps this week. Still, I wouldn’t bet against this market right now, at least not in the intermediate or long term, so today we’re adding another high-upside pick. It’s a mid-cap software stock that’s trading well below its post-IPO highs, but that has built up a full head of steam the last two-plus months. It’s a new addition from Cabot Early Opportunities Chief Analyst Tyler Laundon.

Details inside.

The newly named Nikola stock is gaining momentum from its new electric-charged Nikola Badger truck. Can it challenge Tesla?

The end of a year is a great opportunity to make a New Year’s Resolution to be a better investor. The question is: what should you resolve? The experience of people who vow to lose weight or stop smoking or learn Chinese should give you a little guidance here. Huge resolutions often lead to huge failures.