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I’m a value investor, which means I’m constantly looking for bargain prices in the stock market. The question is: how can we determine whether a stock is a bargain?

The market was relatively quiet today, with the Dow down 28 points and the Nasdaq down 19 as investors looked for news and rumors about the G20 economic summit this weekend.

The market’s reaction to the Brexit vote has dropped the iShares MSCI Emerging Markets ETF (EEM) by nearly 6%. Today, our only action will be to sell half of our position in Credicorp (BAP), our Peruvian bank stock.

Last week, a shoddy take-down article was written about one of our holdings on Seeking Alpha. It was written by an anonymous author, was poorly constructed and failed to undermine (in my opinion) the most important parts of the long-case for the company.

An update on one of our stocks, and ratings changes on two others.

Dear Cabot Heritage staff, I am writing to thank you for writing such an excellent newsletter (Cabot Market Letter)! I usually don’t write letters like this. What prompted me to write though is the abundance of solicitations I get for other newsletters. The most recent solicitation (to buy small and midcap stocks) had a chart showing their performance versus the S&P and Russell 2000. In their review from 1999 to present they barely edged out those two indexes and in most cases barely beat or lost more than they did. For anyone who has received any of your solicitations that might be sitting on the fence or are reluctant to subscribe, you need to subscribe to the Cabot Market Letter! Your newsletter is by far the best I have ever read. Succinct and to the point with with your buys and sells. I look forward to getting your newsletter every two weeks via e-mail and enjoy the video updates you provide on Fridays. All the best and keep up the great work!
M. Pak, Knoxville, Tennessee

Today, I will continue my chart series, by writing about using bursts of volume to identify areas of support.

The highlight of my week so far just might be waking up this morning and realizing I can count the remaining days in September just using my fingers. That’s not because the weather hasn’t mostly been beautiful in Rhode Island. It has. It’s because, as you know, the market has struggled this month.

As we move into the third quarter, analysts at Goldman Sachs write that their baseline forecast is for the S&P 500 to gain 5% in the second half of the year. In their “vaccine upside” scenario, stocks rise by 14% from here; in the “virus downside” scenario, they drop 30%.

The big news this week was, of course, the swearing in of President Biden and all the associated stories about the transition. Fun fact – portfolio holding Everbridge (EVBG) supplied its Mass Notification system to help keep Washington, D.C. area residents and visitors safe and tuned in during, and leading up to, the Presidential Inauguration.

Welcome to this week’s Cabot Macro Investor update.

I’m joking. We’re still all about small-cap stocks. But now that earnings season is over it’s all about the macro again. So we’ve got to address it.

In the second half of July, I felt like we were due for a pullback.

The last two weeks have been a lot less fun than June and most of July. But big picture, a pullback is not remotely surprising.

Through yesterday’s close, both the large and small-cap indices were down about 2.6% from their recent highs. The Nasdaq was down almost 5%.

What is a little surprising is the rapid change of tone out there. This can be squarely blamed on Fitch’s downgrade of U.S. debt and Moody’s bearish notes on those 10 banks they think don’t look so hot.

We may look to exit a few positions on strength over the coming weeks/months, but those moves will depend on share price momentum and/or earnings results. More companies have announced their earnings release dates, and three companies report next week. We have no ratings changes this week.

Another year is coming to an end. It was a crummy year for the market. The current roughly -20% YTD return for the S&P 500 with two days left marks the worst yearly performance for the market since 2008.


Although it’s been a tough year for stocks, history strongly suggests that 2023 should be a lot better. In the last 42 years, there have only been 7 calendar years of negative market returns and 35 years of positive returns. Of those 7 negative years, 5 were followed by years when the market rebounded at least 20%.

Apple still has such a heavy weighting on the major indexes that it’s masking the real strength of the broad market!

2013 is off to a good start, market-wise. The major indexes have all held the big gains they made on December 31 and January 2 (the latter has been dubbed the fiscal cliff relief rally). In most cases, that puts them right around their multi-year highs reached in September-October. Yet investors...

I don’t need a crystal ball to know that people will want to find out which hot technology stock I am recommending. But first, a glimpse into the future.

Long experience has taught me that the number-one thing subscribers want from Cabot is stock tips. They want the name of the next Apple (AAPL), the next Netflix (NFLX), the next Amazon (AMZN). But what I’ve discovered is that many people, even when presented the right stocks, don’t know how to handle those stocks properly. So today it’s back to basics. Today, I’m presenting five ways to increase your profits and reduce your risk.

The Greentech revolution has arrived on Wall Street, and a smart, low-risk way to play it is through these three clean energy SPACs.