WHAT TO DO NOW: After selling Blackstone (BX), in a morning bulletin, we’re also going to sell our half position in Teladoc (TDOC), which is falling apart today. The result will be a cash position of around 54% in the Model Portfolio.
As the futures indicated, the market is down sharply this morning, though the major indexes have bounced from their lows. As of 10:45 am, the Dow is sinking 454 points while the Nasdaq is down 118 points. We’ll see what happens the rest of the day, but it does look like our Cabot Tides will return to negative territory at the close.
As we wrote this morning, when you combine the new round of selling in the general market with the numerous potholes seen among individual stocks, we think it’s best to remain cautious—holding plenty of cash and keeping new buying on the small side.
This morning’s note was to sell our position in Blackstone (BX), whose uptrend has cracked. And now we’re going to sell our half position in Teladoc (TDOC), which has been hit by the one-two punch of bad news on the competition front (if you want to call it that with Amazon) and the overall market environment.
This sale will raise our cash position into the mid 50% range (give or take), and we continue to have stops in place for our other holdings.
That said, it’s not all doom and gloom out there. Many stocks we’re following (including a couple we own) are holding up pretty well. And as we wrote this morning, we’re keeping an open mind about what comes next—it wouldn’t surprise us if this is the third leg down this year (May, August and now), which could bring an October bottom and a sustained advance. But just going with what we see, we remain focused on babysitting our current holdings and protecting capital until the buyers show up.
We’ll be sending a fuller update as usual tomorrow (Thursday), October 3. Don’t hesitate to email (mike@cabotwealth.com) with any questions.