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The American economy is in a period of great transition, but just like the frog in the pot of water that’s being slowly heated, many people don’t appreciate the magnitude of the coming changes yet. There are tremendous investment opportunities out there for investors who are willing to embrace the future. This week, General Motors (NYSE: GM) stock hit a 25-year low. In the same week, Clean Harbors (Nasdaq: CLHB), hit an all-time high.

Trends are up, but overextended, suggesting that a normal correction is likely. Our Hi-Lo Alert, which measures the number of Dow stocks above their medium-term moving averages, is at its highest point since May, just two weeks before the market got very rocky and embarked on the course that took it down to the August low.

Eventually, when real estate prices fall low enough, the patient value-oriented souls who’ve been waiting for bargains will come out of the woodwork and start buying. They’ll buy individual houses, apartment buildings, entire condominium projects and more. Downtrends will end. The recession will end. And the U.S. of A. will return to its pattern of slow growth. But should you wait until then before you invest? No, as I explain in the next section.

Market volatility has picked up. Stocks are popping and dropping all over the place. In other words, welcome to the thick of earnings season.

I correspond with investors who know all of the sound rules of growth stock investing but do not follow them.

The market is down on the day, though individual stocks aren’t doing too badly. As of 2 pm EST, the Dow is off 280 points while the Nasdaq is off 165 points.

A lot has been written in previous Cabot Wealth Advisories about how to pick a growth stock. The advice from my fellow Cabot colleagues is sound and, when followed, will lead to exceptional returns. The editors of the growth-oriented Cabot letters know their stuff, and can produce performance numbers that prove it. But I like value stocks, and I believe that value stocks should be included in your portfolio. In my opinion, your portfolio should contain half value stocks and half growth stocks and should not contain 100% value or 100% growth stocks. Value investing, perhaps more than any other type of investing, is more concerned with the fundamentals of a company’s business rather than its stock price or market factors affecting its price.

If you’re seeking rapid growth, you might want to look at a company in the health industry that I featured it in Cabot Stock of the Month Report: Warner Chilcott (WCRX).

Sysco (SYY) is the leading distributor of food to restaurants, hospitals, hotels and schools.

When I consider the icons who made contributions to the science of investing, many names come to mind.

Here are updates on five companies I’ve recommended in Investment of the Week since October: Carnival, CBS Corp., E*Trade Financial, FedEx, Legg Mason and Universal Electronics.

I spent most of last weekend planning an upcoming trip to Europe (Prague, Munich and Amsterdam). I reserved a rental car, found a couple places to stay... and looked into getting a new credit card. I already have credit and debit cards that don’t charge foreign transaction fees, which is important...

Even though stocks have been wobbly today the last week has been very constructive for our portfolio. As of mid-day today, our portfolio is up an average of 4% from last Thursday’s close, and only two positions are down (neither by more than 2%).

Markets are showing great resiliency as the S&P 500 nears a record and stocks have risen all but one day in August. Optimism about an eventual stimulus bill and the prospect of declining Covid-19 cases and a vaccine are still supporting the economy and markets.

The Cabot Global Stocks Explorer portfolio had another good week, with four stocks all making major moves.

With most of our companies having now reported we are turning our attention back to the longer-term future. For the most part, earnings from our companies were good and we’ve only made a few incremental ratings changes here and there.

Tim Lutts fully expects the stock market to hit new highs in January.

Both large and small growth stocks continue to advance off their October lows despite all the political turmoil from the impeachment hearings.

Portfolio Changes: Infineon Technologies (IFNNY): FROM BUY A HALF TO HOLD


Centrus Energy (LEU) shares were up a point this week but the Zacks Consensus Estimate for its current-year earnings has been revised 21% downward over the last 60 days. This is still a buy for aggressive investors as interest in expanding nuclear power gains momentum.

The S&P 600 Small Cap Index hit a 2022 closing low of 1,064 on September 26. On November 11 it moved back above its 200-day moving average line and closed at 1,232. That was a 16% move off the low.

The index then moved sideways for a few weeks before dropping back below both its 50- and 200-day moving average lines in mid-December. At that point, the index found support at 1,135, roughly 7% above the November lows.