The market has begun a correction, and whether it ends in two days or two months is anyone’s guess. Technically, our market timing indicators are still positive (the Cabot Tides is on the fence), but the action of leading stocks, which have come under pressure during the past two weeks, has had us raising cash. The Model Portfolio, in fact, now has a 40% cash position after selling off three stocks in the past couple of weeks (details inside). However, we’re far from bearish here; the major bull market uptrend is still intact, and while some more pain is possible (even likely) in the near-term, we’re already busy looking for great growth companies whose stocks are resisting the market’s downward pull. We write about a few of them on page 4. Finally, on page 5, we write about some of the basic tenets of our system; we know that the basics can sometimes get lost when the market is volatile and the news is loud. But we feel reviewing some core principles will be a big help to your investing. Thus, tonight’s Letter is full of advice, new stock ideas, market timing, education ... you name it, we covered it. So open up for all of our latest thoughts.
