What to Do Now: We’re selling the rest of our shares in Planet Fitness (PLNT), raising our cash position to around 38%. We have no other changes tonight, but as always, we’re keeping our eyes open and will have further changes if need be.
The market enjoyed a couple rounds of decent buying during the past week, but today brought a huge round of selling as the headlines blared about the inverted yield curve. At mid-day, the Dow is down 642 points and the Nasdaq was plunging 220 points.
Obviously, our Cabot Tides are still negative given today’s selling, though most major indexes remain above their lows from last Monday. Our overall thinking hasn’t changed from yesterday’s issue—right now, it’s time to play some defense, cutting losses and laggards and holding some cash, though we’re also OK holding profitable names that are hanging in there.
Today’s bulletin is about Planet Fitness (PLNT), which has been trying to hold above support during the past two weeks, but today is slipping below the 70 area. We’re going to take the rest of our profit (we sold half a few weeks back) and hold the cash.
This move will give us around 38% in cash, and we still have tight leashes on a couple other stocks, such as Coupa (COUP, mental stop in the low 120s) and Blackstone (BX, in the 42 to 43 area), so if the correction deepens we’ll likely raise some more cash. But tonight, the sale of PLNT will be our only move.
As for the overall market, the longer-term evidence is still positive
Your next scheduled message is next Thursday (August 22), though we’ll be on the horn if we have any further changes before then.