Dropping ModelN (MODN)
There aren’t a lot of bright spots out there in today’s market but one datapoint I thought worth sharing is this: Heading into today the average return of our positions was 15% better than that of the S&P 500 Index over a comparable time frame.
That’s computed by taking the simple average of each of our stocks since I recommended them and comparing that simple average to the return you’d have achieved if you had purchased the S&P 500 instead of each stock.
That may be of little comfort after this historically awful day in the market. But it should help investors realize that averaging into high-growth early-stage stocks does work, even if markets go crazy every now and then.
Clearly, we have some stocks making wild moves, some of which seem completely detached from the reality of what’s going on in the world, however concerning it may be.
I’ll be following up with comments on many of our stocks this week. But for today, we’re going to take one action. It’s time to step aside from ModelN (MODN), a stock that was added in November and which was also featured in Cabot Small-Cap Confidential. In that advisory, which has far fewer positions than Cabot Early Opportunities, I have suggested investors sell half of their position. However, in this advisory, given how many stocks we have, I’m suggesting you sell your entire position.