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The gold-silver ratio is an intimate relationship. It indicates how many ounces of silver are needed to buy one ounce of gold. In the last century, this ratio reached its lowest point at just under 15:1 at the end of 1979 and peaked at over 110:1 during the COVID crisis.

This year, we passed the 100:1 mark for only the fourth time in a hundred years – a strong signal that silver may be underpriced.

So today, we add an aggressive silver play to the Explorer portfolio as a bet that it will close the gap on gold.

Explorer stocks are either steady or performing well with Dutch Bros (BROS) shares up 18.4% during the last two weeks and Luckin Coffee (LKNCY) shares jumping 9.4% this week after a strong first quarter with 41% year-over-year revenue growth.

In addition, Singapore’s Sea Limited (SE) shares are up 18.6% during the last two weeks, and Spain’s Banco Santander (SAN) shares have surged 73% so far in 2025. China’s BYD (BYDDY) shares are up 53% in 2025. New silver and gold play Coeur Mining (CDE) shares were up 13.5% in their first two weeks in the portfolio.

The market decline of the past month has turned Cabot’s long-term trend-following indicator negative (after 30 months on the positive side), so it’s time to recognize that the tide is now going out. Defense is now a major part of the game.

The past month has been the best of the year for our marijuana stocks, and while there’s a chance the sector could top out now (there’s so much good news out there), I learned long ago that it doesn’t pay to fight the trend.

The fact is, this sector strength could easily run to the end of the year as investors rush into this high-growth sector. So, we’ll now become fully invested, adding one new stock at the same time.



Full details in the issue.

We’ve studied the characteristics of bull and bear markets going back decades, and we know that bear phases often end with big selloffs caused by scary, headline-grabbing news. The Bear Stearns debacle certainly qualifies, and this financial panic could result in a sustainable low. So if you have a huge cash position (60% or more of your account), buying a few shares here or there could work out well. Just be sure to stick with what’s working–namely oil and natural gas stocks, as well as some steel names that are acting better–and remember to cut all losses short. Overall, you should stay in a mainly defensive posture until we see real signs of improvement. Our favorite stock this week is Steel Dynamics (STLD). The company raised its earnings guidance last week and the sector as a whole seems to be gaining sponsorship. We think you can buy a little on weakness.

Stock Name	Price	Buy Range	Loss Limit
DVN (DVN)	0.00	97 1/2 - 101 1/2	-
EAC (EAC)	0.00	35 1/2 - 38 1/2	-
HLF (HLF)	0.00	43-46	-
NFLX (NFLX)	0.00	31-33	-
NUE (NUE)	0.00	66-70	-
SLW (SLW)	0.00	17 1/2 - 18 1/2	-
STLD (STLD)	0.00	62-65	-
SWC (SWC)	0.00	15 1/2 - 18	-
SWN (SWN)	0.00	62-66	-
WDC (WDC)	0.00	29-31	-

Please note that next Thursday is July 4^th and therefore there will not be a Cabot Explorer issue though I will send out an alert if there is any significant news on our stocks.

For Explorer stocks this week, Neo Performance (NOPMF) shares were up 12%, and Super Micro (SMCI) gave back half of last week’s 20% gain.

The dollar rose to its highest level since last year as the Federal Reserve breaks with other central banks by keeping interest rates elevated, giving global investors an incentive to move cash to the U.S. to capture higher bond yields.

As I mentioned recently, I’m now in Europe looking for intelligence and ideas.

This week I’m in Madrid and visited the stock exchange (bourse) and met with some local brokers to try to get a feel for the market and region. Like brokers always are, they were bullish on stocks and especially gold. One stock we discussed which I have followed from time to time is Banco Santander (SAN). It is in a nice uptrend and still well below book value, but I need to do some research and reach out to some friends who previously worked for Santander to get their views before considering a recommendation.

Instead, today I have a new gold stock recommendation.

In today’s note, we discuss pertinent developments and ratings changes for some of the stocks in the portfolio, including Alcoa (AA), Atlassian (TEAM), GE Aerospace (GE), SLB Ltd. (SLB), Starbucks (SBUX), Super Hi International Holding (HDL) and Teladoc Health (TDOC).

The overriding question coming into last week was whether, after the V-bottom and strong rally for much of August, the market could keep going or would it fall back into a longer bottom-building process. After last week, it’s looking like stocks need more time to set up, as big investors returned from the long weekend and sold stocks basically every day. Of course, today saw a bounce, and a strong-volume rally with fresh breakouts among potential leaders would be very bullish -- but until we see that, we have to assume the market correction that began in mid July is still ongoing. Long story short, we continue to play things relatively cautiously, sticking with small positions and a chunk of cash on the sideline as we wait for more stocks to emerge on the upside. We’ll leave our Market Monitor at a level 6.

This week’s list has a lot of familiar names that are (or are close to) offering decent entry points. Our Top Pick is a consistent grower with a big story that’s trying to emerge from a three-plus-month rest.

Wells Fargo & Company (WFC) reported second-quarter results this morning, and we comment on the report.

Shares of ESAB Corp (ESAB) have crossed our $68 price target so we are now formally reviewing the rating and price target.

The market’s uptrend is under a bit of pressure and the Fed’s dovish stand on interest rates is a sign of weakness that is unlikely to impress Wall Street. Nevertheless, Sea Limited (SE) has regained its momentum and NovoCure (NVCR) is up 35% over the past two weeks. And our emerging markets timer (EEM) is positive. This week we go to Australia for a new fintech idea that has been on a tear, but fortunately has pulled back for a decent entry point.

It’s been a crazy year, with bank failures, bailouts and a historic election behind us, 2008 will definitely be one to remember. In honor of the New Year, I’ve been looking back at 2008--all its ups and downs--and came up with a few investing New Year’s resolutions based on what’s happened. The most important thing to remember is to learn from your mistakes, but don’t dwell on them. They teach important lessons, but the most important thing is to move forward with those teachings in mind. Best of luck to you in 2009!

Current Market Outlook


Last week’s issue was titled “Next Few Days Should be Key,” and we think they were—in a bullish way. The market’s strong snapback to new highs (in the indexes and many leaders) made the prior dip look like a shakeout, which generally bodes well. That said, the action didn’t erase all the yellow flags out there, either, as sentiment is bubbly, many stocks are extended in time and price and, most important, tons of names are set to report earnings in the days ahead, which will be key for the intermediate term. Don’t get us wrong, we’re encouraged, but we still think it’s best to pick your spots on the buy side and trail your stops (and book some partial profits here and there) as opportunities arise. We’ll move our Market Monitor back up a notch and see how things go from here.

This week’s list is brimming with strong names, including more than a few that reacted well to earnings last week. For our Top Pick, we’ll go with Dynatrace (DT), which has just gotten going from a multi-month structure and looks ready for a sustained advance.

Stock Name	Price	Buy Range	Loss Limit
Align Technology (ALGN)	602	585-605	525-540
Bill.com Holdings (BILL)	179	170-177	150-154
Canada Goose Holdings (GOOS)	42	40-42.5	35.5-37
Dynatrace (DT)	56	53-56	47.5-49
PayPal (PYPL)	282	267-277	240-246
Pinduoduo (PDD)	188	178-186	160-164
SM Energy (SM)	12	10-11	8-8.8
Snap Inc. (SNAP)	64	60.5-63.5	53-54.5
Tapestry, Inc. (TPR)	39	35-37	31.5-33
Zendesk (ZEN)	156	150-155	138-141

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The short answer is yes, it’s possible … if you can get banks to sell you their transaction data, host your platform and accept the revenue share agreements you propose for all the deals that consumers accept while logged in.
This month’s Cabot Small-Cap Confidential stock has created such a platform, and it’s taking off.
The story, and potential, of what happens when digital marketing and fintech walk down the aisle together is inside.

The market is getting a little frothy.

The S&P 500 is up 5.5% in the five weeks since election day, though that’s a historically normal bump following an election. The bull/bear ratio topped 3.9 last week – just shy of the 4.0 “danger zone” that often precedes pullbacks, though it’s not the first time it’s been this high in recent months. And Bitcoin, an asset that thrives in bull markets and typically tops right before a major pullback, just crossed the $100,000 threshold for the first time and has more than doubled in the last three months.

Volatility is back, with the VIX spiking above 20 for the first time since early August and above 21 for the first time since June.

Tariffs are the reason. Specifically, escalating tariff rhetoric between the U.S. and China, which spooked the market into its worst one-day selloff since April last Friday, and has prompted wild intraday swings every trading session since. So far, the damage to the major indexes has been fairly limited (the S&P 500 is less than 2% off its highs, as of this writing), but under the surface, a few yellow flags have emerged, including the number of 52-week lows among NYSE-listed stocks topping the magic number of 40 (it’s up to 63) that typically precludes a more pronounced market pullback. We’ll see how much the just-underway third-quarter earnings season can act as a yin to tariffs’ yang and hopefully provide a relatively high floor for stocks in the coming weeks. As I wrote in this space last week, that may depend on whether companies can cross the relatively high bar of 8% earnings estimates.

Three earning updates - Two Holds and a Sell.

Small caps bounced off their 50-day line last week and are nearing all-time highs. It’s anybody’s guess what will happen in the days ahead as many people will have stepped away from the market, so don’t be surprised if there is some odd trading in some of our stocks. There’s usually some inefficient trading, especially with the microcap stocks, during these periods.