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Well, I’d call November a pretty good month! The Dow Jones Industrial Average soared by around 2,000 points since our last issue. Wall Street seems positively optimistic that the Fed will begin to lower interest rates mid-year, according to a recent CNBC survey. Also, the risk of a recession continues to decline, with Goldman Sachs saying the probability is now around 15%.

Both of those instances may create a very good market in 2024.

There are three big developments in the cannabis space to report.

* A buyout of one of our portfolio names, which nets us 105% gains in four months.

* A confirmation that the Biden administration is serious about some major cannabis reform, which would be a huge catalyst for the group.

* A buyable selloff. Cannabis stocks sold off sharply Tuesday probably based on false fears that rescheduling won’t happen. I think that’s wrong, and the weakness is a buy.

Small caps are having a very nice week as a lot of rate-sensitive areas of the market zoom higher following the Fed’s meeting and Jerome Powell’s press conference yesterday.

I’ve been saying I think small caps are very attractive lately, so the directional move here isn’t a surprise, though the pace of this week’s gains is rather eye opening. The S&P 600 Small Cap index is up about 7% over the last two days through midday Thursday!

The rally that began in November is slowing down, but not dying.

Things are still good. Inflation is falling, the Fed is probably done hiking rates, longer-term rates have peaked, and the economy is still strong. But it’s that time of year. The holidays have a way of taking investor focus away from the market. Stocks tend to do whatever they were doing when investors stopped paying attention, which in this case is edging higher ever so slowly.

The big events this week were the November inflation report and the Fed’s meeting, and both (especially the latter) were very pleasing to the market—the fact that the Fed is forecasting three rate cuts next year tells us at the very least that the rate hike cycle is almost surely over, which helped stocks and bonds rally nicely. As of this morning, big-cap indexes are up about 2.5% on the week, while small- and mid-cap indexes are up more than 5%.

The Fed’s actions (holding rates steady) and words (seeing three rate cuts next year) has supercharged the broad market this week, keeping our market timing indicators positive while most leaders are in fine shape. We will say that, with the good news out, sentiment has picked up, so we’re still content to move gradually and pick our spots with new buying. Tonight, we’re filling out our position in one name while starting a half-sized stake in a new leader, leaving us with around one-quarter in cash.

Despite some early-in-the-week wobbles, the bulls were able to rally into the close of the week and again tack on gains. For the week the S&P 500 gained 0.8%, the Dow was unchanged, and the Nasdaq rose by 0.7%.

Over the long run, it pays to be bullish, and with a disciplined trading strategy, you can beat the market... just like we have for the last few years.

A heavily redacted Freedom of Information Act (FOIA) request lays the groundwork for cannabis rescheduling, here are five big takeaways from reading between the lines.

After an upbeat earnings season for tech, signs of sector rotation are rising, which bodes well for the prospects of industrials like these three railroad stocks.

Cabot offers a wide range of options services for investors of all stripes. If I were just getting started trading options, here’s where I’d start.

The market has certainly had an interesting couple of weeks as volatility has picked up—the Nasdaq and especially leading stocks saw a big drop early last week, a sharp recovery through last Friday, followed two days of fairly heavy selling—and then we had Nvidia’s (NVDA) report Wednesday evening, which caused another rush of buying yesterday. Our thoughts:

“As Goes January, So Goes the Year,” or so the saying goes. But what does January’s action tell us about the year ahead?

The market is hitting new highs, thanks to Nvidia (NVDA). And while blowout earnings from the artificial intelligence leader were good for the many AI-related plays we have in the Stock of the Week portfolio, we have more than our share of non-AI stocks that are thriving as well (see American Eagle Outfitters (AEO) and Aviva (AVVIY)). Today, however, we add a hiding-in-plain-sight all-star, a company so mainstream and obvious that it may already be in your portfolio … or it’s possible you sold out of it along with many other institutional investors during a brutal stretch in 2022. Now, it’s fully back – and yet the shares still trade well below their 2021 peak. It’s a new recommendation from Tyler Laundon in his Cabot Early Opportunities advisory.

Details inside.

After years of underperformance, many investors are ready to write value investing off as dead, but here are six reasons you shouldn’t be so certain about that.

At 6:30 AM ET this morning Docebo (DCBO) dropped its Q4 earnings press release. The company operates a learning platform for both internal and external learners and, yes, AI is mentioned in the first sentence of the press release!

It may not be capturing headlines, but better productivity is having a major impact on bottom lines, may help us avoid a recession, and is a key driver of recent stock market gains.

Despite some heavy selling pressures early last week, the market rallied to close the week following Nvidia’s (NVDA) blowout earnings report that highlighted the growth potential of AI. By week’s end the S&P 500 had gained 1.2%, while the Dow rose marginally and the Nasdaq fell slightly.

It’s amazing how much some of our stocks have moved over the last week while the average gain of our portfolio is almost EXACTLY the same as that of the S&P 600 Small Cap Index.

Measuring Wednesday to Thursday early morning, shares of Remitly (RELY) are up 18%, Docebo (DCBO) is up 17% and Enovix (ENVX) is down 12%. Taking a simple average of our positions’ change over the last five sessions, though, the average change is 0.7%. That compares to a 0.8% gain in the S&P 600!