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The market remains in good health and trending higher, spurred on by some very impressive second quarter reports.

This week’s recommendation is a high-risk stock with high potential in the energy industry, and I’m trying to get in near a short-term low here.



As for the current portfolio, many of our stocks are hitting new highs today and there’s only one change—a downgrade of Columbia Sportswear (COLM) to hold.



Full details in the issue.

While everyone is focused on the near-term risks and inconveniences of this pandemic, lasting changes are being forged. Major events have a way of reshaping the American psyche and changing behavior. This pandemic ordeal is forever altering aspects of our culture, creating an a unique opportunity for investors.
In this month’s issue I highlight a stock that directly benefits from the fact that people will continue to do more things from home than they did before the pandemic. It sells popular packaged food brands. Business is booming and should stay good for a long time.


A former slow-growth stock is being transformed into a fast-growing, high-yielding investment that is ideal to hold through the crisis and beyond. Investors are just beginning to realize the opportunity. But you can still get in cheap.

Current Market Outlook


As we’ve been writing for many weeks, most of the primary evidence (trends of the major indexes, action of leading stocks) remains in the plus column, as do some key secondary pieces of evidence (blastoff indicators, number of new lows, etc.), so we’re sticking with a bullish stance. But the near-term should be interesting—the continuing dichotomy in the market means most indexes aren’t far from their 50-day lines, and we’ve started to see more up-down-up-down action, which, after a big, prolonged (13-plus weeks) upmove, tells you that the bulls and bears are beginning to fight it out. None of this is a reason to anticipate something sinister—again, most of the evidence is still positive—but it’s prudent to pick your spots on the buy side and have some stops in place in case the sellers make a stand and/or another bout of rotation takes hold (we started to see that today). We’re nudging our Market Monitor down to a level 7.

This week’s list has something for everyone, with stocks of all stripes making the cut. Our Top Pick is Etsy (ETSY), which has come alive after a year-long rest. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Crispr Therapeutics (CRSP)	84.11	71.5-75	62-64
Etsy (ETSY)	112.97	97.5-102	84-86
Farfetch (FTCH)	26.23	16-17.5	14.5-15.5
GenMark Diagnostics (GNMK)	15.47	12.3-13	10.6-11
HubSpot (HUBS)	582.89	207-212	187-190
Inphi (IPHI)	120.16	107-111	98-100
Invitae (NVTA)	32.06	26-27.5	22.5-23.5
Meritage Homes (MTH)	102.20	71.5-74	63.5-65
Plug Power (PLUG)	8.35	7.2-7.6	5.9-6.2
STAAR Surgical (STAA)	57.94	56-59	49-51

The market remains in good health and trending higher, though the rotation out of the leading Nasdaq glamour stocks may have further to go—or may be just a false alarm.



In any case, it’s the stocks YOU own that matter, and if you’ve been choosing from our portfolio, you’ve been doing pretty well!



Today’s recommendation is a well-known and well-run company in the apparel business that should benefit from the trend toward more casual clothing. And according to our Cabot expert, it’s undervalued!



As for the current portfolio, there are two changes, a sell recommendation for Beyond Meat (BYND), which has lost momentum and a move to hold for Big Lots (BIG).



Full details in the issue.

After 16 relatively smooth weeks, the sellers have finally put up a fight this week, dragging most growth stocks down after big runs. We trimmed a bit earlier this week, selling one name and taking partial profits in another, leaving us with 20% in cash. But most of the evidence remains positive, and while we remain flexible, we’re comfortable giving most of our winners a chance to digest their recent moves.

This week’s issue writes about why a market pullback would make sense around here, but also talks about the most bullish factor we see (lots of early-stage leaders out there). And, as always, we give you all our latest ideas and thoughts on the market and our stocks, including key levels we’re watching.

Extreme sector rotation has been the story of the last week as red-hot growth sectors came under some pressure, while out of favor value stocks finally found some buying. This is a fine situation for our diversified portfolio as we are selling expensive calls that help offset any short-term stock/sector weakness. This brings me to our pick of the week, which is in a red-hot sector and recently reported very strong earnings.

Any doubts surrounding the work-from-home secular theme were dispelled by the pandemic, as remote platforms are now more prevalent than ever, and it should stay that way—recent surveys point out that up to three quarters of companies anticipate remote work being part of their long-term strategy, and Harvard just today said it’s going fully online in the fall.

The Nasdaq and growth stocks have a lost a little steam since early July, with fewer stocks moving up and the indexes doing more chopping than trending. That’s a good reason to take your foot off the accelerator, but most of the big-picture evidence remains positive, so we’re holding our strong, profitable stocks and remaining mostly bullish.

In tonight’s issue, we review some of that bullish longer-term evidence, talk a bit about gold stocks and, as always, go over our latest thoughts on the stocks we own and are watching.

Three of today’s featured companies seem most obviously ready to begin or continue run-ups in the coming days. The fourth featured company is sitting at the bottom of a steady trading range, offering attractive opportunities for growth investors, dividend investors and traders.

U.S. stock markets are rising again. At some point in the coming months, the sober reality of the country’s economic situation will impact the stock market, but for now, there’s money to be made. Energy stocks and stocks within the investment, life insurance and annuity industry look especially bullish right now.

Our emerging markets signal (EEM) is decisively positive after relative outperformance by emerging market stocks over the last couple of weeks. The Fed signals that rates will likely stay near zero through 2022 and the Fed chairman promised to “run stimulus programs forcefully, proactively and aggressively for years, if necessary.”

Although jobs numbers surprised on the upside, it looks like the market is shrugging off that GDP will gap down about 6% in 2020 and the federal budget deficit reached $400 billion for one month – May!



Today, we have a new recommendation that is at the heart of technology and hedges the growing tension and risk in Asia.

Current Market Outlook


Last Thursday’s massive selloff was a shot across the market’s bow, and today saw the broad market take another punch to the gut. That said, the evidence remains mostly bullish at this point—the trends of the major indexes are up, nearly all institutional-quality leading growth stocks are still acting fine and many secondary indicators (such as the number of stocks hitting new lows, which remains microscopic) are also pointing higher. Of course, 2020 has been all about staying flexible, and right now isn’t a time for complacency; it’s always possible the 11-week advance is going to lead to a sharper correction or consolidation. Thus, you should be open to any possibility, but right now, the evidence remains bullish, so we advise remaining heavily invested.

This week’s list has a bunch of growth-oriented titles that are showing attractive setups. Our Top Pick is Lululemon (LULU), which could pull in further after earnings, but our guess is that this dip will give way to higher prices in the weeks ahead.

Stock Name	Price	Buy Range	Loss Limit
Argenx SE (ARGX)	222.54	208-215	187-191
Bandwidth Inc. (BAND)	129.19	117-121	102-105
Coupa Software (COUP)	262.20	225-231	198-201
CrowdStrike (CRWD)	105.02	93-97	84-86
DraftKings Inc. (DKNG)	38.26	37-41	30-33
Fiverr (FVRR)	71.41	60-64	51.5-53.5
Lululemon Athletica (LULU)	304.69	291-301	264-269
Novavax, Inc. (NVAX)	65.95	47-50.5	39-41
Peloton (PTON)	53.03	47-50	40-41.5
Redfin (RDFN)	40.40	30.5-32.5	25.5-27

As we near the end of 2020, I’m thankful that 2020 was so very good to the leading marijuana stocks, and that we managed, overall, to ride the trend quite profitably.

As I write, the uptrend is intact and we remain fully invested, but as the calendar turns to 2021, there’s a chance that the trend (and the trend of the broad market as well) might turn down.



Thus I’m on alert.



But I learned long ago not to argue with the trend of the market, so until the trend changes, I recommend staying heavily invested.



Full details in the issue.

This week, Cabot Profit Booster features a top new-economy recommendation in the fast-growing social media space whose stock is just short of its all-time high.