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The last two months have felt historically volatile.

Since Donald Trump took office for a second time and immediately started handing out tariffs like they were surprise take-home prizes at an Oprah taping (“YOU get a tariff, and YOU get a tariff!”), the market has been unsettled. And indeed, from mid-February through mid-March, things weren’t simply unsettled – they were bad. Both the S&P 500 and the Nasdaq entered correction territory – the fifth-fastest correction in the last 75 years, in the case of the S&P. Fears of higher inflation and possibly recession have come rushing back to the surface, consumer confidence is at a 12-year low, and interest rate angst is back in full force.

And yet, actual volatility – as measured by the VIX, a.k.a. the “investor fear gauge” – has been … fairly muted?

Momentum has broadened out to start 2026, with several previously under‑the‑radar groups (like industrials) showing powerful relative strength, even as last year’s market leaders take a breather.

This month’s issue leans into these emerging trends. I feature companies tied to infrastructure, building systems, aerospace engines, and industrial filtration. I’ve also included a fast‑moving biotech company with multiple near‑term catalysts.

Enjoy!

WHAT TO DO NOW: The market is again mixed today, with the major indexes holding their own—but the under-the-surface action remains very hit-and-miss among growth stocks. Today’s bulletin concerns Palantir (PLTR), which has been churning for many weeks and is now starting to slip. It’s not a death knell, but we’re going to trim here, selling one-third of our remaining shares in the stock.

Just when it looked like happy days were here again, volatility has reared its ugly head.

Granted, this week’s volatility spike was muted by historical standards, but relative to the ultra-low volatility of the last few weeks, it was enough to give pause for the bulls.

With plenty of potential potholes threatening the stock market, some defensive stocks make sense. Here’s one defensive small-cap growth stock to consider.

Artificial intelligence is the biggest thing in the market these days. But AI doesn’t work without energy.

The world doesn’t run on technology. It runs on energy. Energy is the respiratory system of the modern world that can’t function without it. Technology doesn’t work without electricity powering its systems.

Sure, clean energy is the future, but not yet. In fact, the U.S. and the rest of the world still rely on fossil fuels (oil, natural gas, coal) for more than 80% of energy needs and will likely continue to do so for decades to come. But fossil fuel consumption is changing. A new king is emerging – natural gas.

Natural gas is by far the fastest-growing fossil fuel. It is the number one fuel source by far to generate electricity in the U.S. and much of the rest of the world. There are also powerful trends adding to the already growing demand.

U.S. electricity demand is growing at breakneck speed because of data centers, electric vehicles, and increased onshoring of manufacturing. U.S. natural gas exports, in the form of natural gas liquids (NGLs), are soaring. This country is already the largest exporter, and the growth is staggering. U.S. NGL liquid exports over this past year have grown a whopping 67% over the prior year.

Natural gas was already the fastest-growing fossil fuel. The addition of soaring electricity demand and exploding U.S. exports accelerates that growth. The fuel is shaping up to be a dominant theme in 2026. In this issue, I highlight the country’s largest producer of natural gas.

Short-term, the market remains under pressure, and this corrective phase could easily go longer (I don’t sense enough pain yet), but long-term, the market’s main trend remains up, so I continue to recommend that you be heavily invested in a diversified portfolio of stocks that are performing well.

Today’s recommendation is a recent IPO, but it’s not Uber or Pinterest or any of the big popular names. I think you’ll like it, but be careful; volatility is to be expected.

As for the portfolio’s current holdings, several are hitting new highs—and none are performing so badly that they deserve to be sold. So this week we’ll stand pat. Details in the issue.

The market’s rally has run into trouble, with our Cabot Tides and Two-Second Indicator effectively back on the fence. When it comes to growth stocks, most are acting more resiliently than the broad market, but even there it’s hit and miss, with lots of air pockets though many names that are acting well, too. Because of the divergent action, we’ve had a flurry of moves since the last issue, paring back or selling three names, but putting money to work in two names (including a new addition last week). All told, we’ll still have about 27% in cash and have a few stocks that look great, but are also keeping a close eye on a couple that remain iffy.

In tonight’s issue, we go over all our thoughts on the market and our various moves, as well as write about the solar sector that may be getting going after a long slumber, as well as small caps in general, which could finally get going ... if interest rates behave themselves.

The overall market remains in an uptrend, but we’re seeing more and more unusual action among individual growth names, and thus are making moves mostly on a stock-by-stock basis.

Last week I ran a quiz here, which was designed to give me a better picture of exactly who you are.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the April 2023 issue.

This issue focuses exclusively on the banking industry. Given the recent turmoil and the second- and third-largest bank failures in U.S. history, we examine the question on the minds of value and contrarian investors: is it time to jump back into bank stocks?

Our feature recommendation this month is First Horizon Corp (FHN), a relatively plain mid-sized regional bank that provides an appealing way to exploit the bank sell-off: merger arbitrage. Due to regulatory delays, the bank’s shares trade at a 33% discount to the $25/share all-cash offer from TD Bank Group, a large and well-capitalized Canadian bank. We believe that the deal will close at the $25 price, providing an attractive return, even as the shares’ discounted valuation offers considerable downside protection.

Last week’s Cabot Investors Conference featured some of the best market insight from our top advisors. Here are my top five takeaways from the two-day event.

A revolution is afoot in the automotive industry, and this little-known, promising stock is the best way to profit from it.

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



One of our more productive methods for finding attractive turnaround stocks is to see what other like-minded investors are holding. We culled the list of hundreds of positions held by our evolving list of 50 or so preferred managers, as reported in the quarterly 13F filings, and discuss three of the most promising.



We also combed through the roster of stocks trading at low prices – another great source for turnaround stock ideas – and review four that have particular appeal.



Our feature recommendation this month is Warner Brothers Discovery (WBD). While most investors view this company as a “play” on streaming, we view it as an undervalued turnaround of the poorly managed WarnerMedia assets that it recently acquired from AT&T.

We note our recent ratings change of Lamb Weston Holdings (LW) from Buy to Sell.

U.S. stocks remain paralyzed by tariff fears, but not energy stocks. They’re the best-performing S&P 500 sector by far this year, more than doubling the return of any other sector. And yet, they remain the most undervalued sector by virtually every measure. So this month, we add a large-cap energy stock to the Cabot Value Investor portfolio that has a yearslong history of not only outperforming the market, but blowing it out of the water. But after a slow start to the year, it’s trading at a rare discount. We think it has immediate upside – and a high dividend yield should hold us over until it gets there.

Details inside.

What a difference two months make!

On April 8, the Nasdaq had plummeted to bear market territory after touching all-time highs just six weeks earlier, and the S&P 500 was on the cusp of joining it. Small caps were faring even worse. Volatility had spiked to multi-year highs. And everyone was certain a recession or high inflation – or both – were imminent.

The reason was tariffs. “Liberation Day,” a week earlier, on which President Donald Trump had imposed sky-high tariffs on more than 100 U.S. trading partners from all over the world, had sent stocks plummeting as economists clutched their pearls and warned of imminent collapse.

The S&P 600 Small Cap Index bounced off rock-solid support at the 820 level late last week, and over the last few sessions has migrated back to its 50-day moving average line at around 837.

The market has snapped back in a surprisingly strong fashion, but breadth has narrowed, so I’m still suspicious of this rebound. However, there are still plenty of great charts as well as stories to go along with them, and today’s recommendation is one of them. In fact, you may even be a user of the company’s products!

As for the current portfolio, there are no changes today.

Details in the issue.