Just after we sent you the last Cabot Market Letter, our Cabot Tides turned negative, and we immediately raised more than 50% cash. We’ve done a little more selling since, and are now sitting on a 64% cash hoard in the Model Portfolio. While we’re happy to be avoiding much of the selloff of the past few days, we’re far from bearish -- in fact, we think the current correction, while sharp and scary, is going to eventually set up some great buying opportunities. Our Two-Second Indicator, for instance, is still positive, and we write about its implications on page 5. Thus, for now, we’re sitting tight in a defensive stance, monitoring our current holdings and, most of all, busy ferreting out those stocks that are holding up well and have great growth stories. On that front, we present our initial Watch List on page 3, as well as a few other new ideas on page 4. All in all, down markets are never as much fun as up markets, but that’s a fact of life in investing. And the good news is that these retreats set up fresh buying opportunities; just remember the upmoves that began after the last correction finished in February! Right here, patience is key, but we’re on the lookout for new leadership.
