The market had been trying to build a bottom in recent weeks, but the action since last Monday has been damaging--most indexes are at or near new correction lows, and this week, even the few dozen growth stocks that had been holding up well were hit hard. In short, the trend remains down, and now there are fewer places to hide. We’re glad to have held at least 50% cash since early May, when our Cabot Tides turned negative. And during the past couple of days, we’ve raised even more cash, taking a loss in Coinstar but also taking some profit off the table in Baidu. See pages 2 and 3 for details. While defense is the name of the game for now, that doesn’t mean we’re sticking our heads in the sand. On page 5 of tonight’s Letter, we’re delving into a (very) broad industry theme and a bunch of stocks and subsectors that are growing at terrific rates. We think you’ll like it. We also think you’ll like our collection of ideas on page 4 as well. We wouldn’t be buying much, if any, of these stocks, but they’re worth following to see how well they handle themselves as this correction unfolds. All told, there’s plenty to read up on in this issue, so open it up and get all our latest thoughts and advice.
