A wave of selling took a bite out of growth stocks today, including every stock in the Cabot China and Emerging Market Investor’s portfolio. There is plenty of uncertainty in the U.S. political landscape to explain a selloff of growth stocks and a rotation into financials and beaten down sectors like retail and transportation. While iShares MSCI Emerging Markets ETF (EEM), which is the basis for the Cabot Emerging Markets Timer, is still above its 25-day moving average, EEM has been under pressure since November 22.
I am taking two actions in response to today’s weakness.
First, I will move our half position in Sociedad Quimica y Minera (SQM) to a Sell rating. We still have a profit in the stock, but it has been in a downtrend all month, and finished near the bottom of its trading range for the day. We will sell and hold the cash for now. SELL.
The second action is to sell Jupai (JP), which I have been treating with perhaps too much patience in light of its youth and its enormous potential. A strategy that might have worked in a more benign market environment definitely didn’t work with JP. We will sell our half position and hold the cash. SELL.
There are no other changes today. The scheduled Cabot Emerging Markets Investor issue will come out tomorrow, and I may have more actions to take then.