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Gold has been on a tear this year, especially over the last month-plus, but the economic backdrop and elevated inflation mean that gold’s run may just be getting started.

As the dividing line between the public and private sectors becomes increasingly blurred, it’s readily apparent that long-term investment decisions must now be evaluated through a new lens. And that means asking a simple question: “Could the financial asset I’m interested in acquiring be potentially influenced through direct federal intervention?”

The much-anticipated market dip finally arrived last week, and so far, when you look at the leadership of this market—the Nasdaq and leading individual stocks—the action has been completely normal, and in fact, seems to be producing some higher-odds entry points as names dip toward support. Once again, though, we need to keep a close eye on the broad market—the intermediate-term trend remains up, but it’s getting close to the edge, with another bad week possibly putting the broad market back in the soup. We’ll leave our Market Monitor at a level 7 today but we’re watching things closely in case weak breadth causes the selling pressures to build.

This week’s list has a growing number of pullback-related setups. Our Top Pick quacks like a new technology leader that’s pulled back reasonably after a strong rally. It’s volatile, so start small and use a loose leash.

After the close Friday, we learned that the Senate banking committee has scheduled a vote on key cannabis sector banking reform on September 27.

Of course, we do not know that the committee will stick to its schedule. But it is likely, so I will assume that will be the case. This timing suggests a possible course of action for cannabis holdings.

This week Chris and Brad talk about the latest Chinese GDP numbers and whether it’s safe to invest in China, Tesla’s earnings release, and what they’re seeing with Regional banks now that they’re reporting. After that, they break down FAANG stocks, their popular ascent as market shorthand, and whether Microsoft is “sexy” enough to sit at the cool kids’ table.

As readers may know, we are generally not the biggest fans of private equity. Our biggest concern is that, while earlier private equity and venture capital funds were remarkably successful in identifying and capturing highly profitable investments for their clients, more recent vintages, going back perhaps 10-20 years, have mostly produced large profits for the fund managers. News that many Johnny-Come-Lately funds will actually lose significant money on the Instacart IPO highlights this problem. High-quality and early movers will likely post enormous profits.

Buying aggressive stocks can help you outperform the market and lead to a richer retirement, but it’s got its risks and you need to know the pros and cons before you dive in.

Beginning on a positive note, I’d like to remind you of the power of compounding returns when you stay in the stock market over time. For example, $100 invested in three-month Treasury bills in 1928 grew to only $2,141 by the end of last year while it became $46,379 invested in medium-grade corporate bonds and a stunning $624,534 if invested in a broad basket of stocks, according to data from New York University finance professor Aswath Damodaran.

China’s continued economic woes took center stage globally this week, as the country’s central bank unexpectedly cut key interest rates in a bid to spur economic growth, manage high debt in the property sector, and lower its 20% youth unemployment rate. An index of Chinese stocks traded in Hong Kong has fallen more than 9% this month.

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

The attention of most investors, commentators and analysts has been on the winners, notably the Magnificent Seven, driving this year’s stock market rally. As contrarians, we are fine with letting a few overpriced trendy stocks capture the spotlight. One place that draws our attention is the other end of the spectrum – those with the worst performance. While most of these stocks fully deserve the market’s dour judgment, some have favorable changes underway. We look into four large and mid-cap stocks that fit this description and one that does not. We also discuss a tactic to help improve one’s success in investing in out-of-favor stocks.

Our feature recommendation this month is Advance Auto Parts (AAP), one of the four major auto parts retailers. The shares have fallen sharply out of favor, but a comprehensive and much-needed overhaul is now starting.

We also include our recent Sell recommendations: Toshiba (TOSYY), Holcim AG (HCMLY), First Horizon (FHN) and ESAB Corporation (ESAB), and our suspension of our rating of shares of Kopin Corporation (KOPN).

Last week had a couple of big news items and, not surprisingly, the market was all over the place, with some strong up action, a wild reversal and then some support after the Fed’s talk. All in all, we consider the shows of support modestly encouraging, along with the fact that sentiment has taken a sharp turn lower as the worries of the world come back into focus. But nothing has really changed with the here and now: The intermediate-term trend of the major indexes and most stocks is pointed down, with few names making any progress. That can obviously change, but for now, we’re still patiently waiting for the buyers to retake control. We’ll leave our Market Monitor at a level 5 tonight.


This week’s list is another mixed set of stocks, though we like the fact that we’re seeing a few more positive earnings moves. Our Top Pick is trying to leave behind a multi-month range after its recent earnings surge.

AI is everywhere these days, including your bank and brokerage accounts. Here are 11 ways you can expect artificial intelligence to impact your finances.

Using ETFs to add a gold inflation hedge to your portfolio is far simpler than investing in physical gold, here are two options I like.

Tesla (TSLA) has had a rough start to the year. Entering Wednesday, TSLA shares were down nearly 42% year to date thanks to a bitter cocktail of sagging revenues, narrowing margins, and increased competition, especially in China. At the start of this week, TSLA shares had dipped to 142, a 52-week low, and were trading at their cheapest valuation on a price-to-earnings basis since last May and on a price-to-book-value basis since 2019.

After struggling all year, is Tesla (TSLA) stock oversold? Based on the reaction to the latest earnings report, the market sure seems to think so.

Shipping stocks are benefiting from higher rates due to a resurgence in military activity in the Middle East, and these two stocks deserve a closer look.

The market has hung in there during the past couple of weeks, which is good to see, but there hasn’t been enough strength — from the major indexes or from growth stocks — to tell us the buyers have retaken control. At the same time, nothing has changed with the big picture, either, which leaves us with the same thoughts we had two weeks ago: Right now, it’s best to be cautious as the correction plays out and as earnings season goes along, but you want to be prepared to move when the tide turns back up.

For our part, we’re holding a good chunk of cash and standing pat tonight, but we have an expanded watch list as we monitor earnings season for signs of future leadership.