WHAT TO DO NOW: The market’s action of late is encouraging for sure, but there’s still more work to do with our Cabot Tides and growth funds. Today we’re going to sell our small remaining position in DoubleVerify (DV) and hold the cash—with an eye toward redeploying the funds in the near future should the market and individual stocks continue to firm up. Our cash level will now be around 45%.
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The market opened the week on the downside – as of 10 a.m. ET, the S&P 500 is off 0.4% and the Nasdaq is down 0.6%, though the broad market is much weaker, down 1.5% to 2%.
The market’s action of late has been encouraging, with our indicators improving and more individual growth stocks showing signs of life. That said, there’s still work to do—our Cabot Tides remain on the fence, for instance, while growth funds and indexes are still testing upside resistance and interest rates remain in a stubborn uptrend.
Overall, we believe the action backs up the view that the next big move will be up—but we aren’t engaging in a major buying spree until we see the evidence improve a bit more.
In the meantime, our goal is to hold our high-potential stocks, ditch ones that aren’t performing and look to start (and build) positions in names that should be fresh leaders of the next upmove.
With that in mind, we’re going to sell our remaining small stake in DoubleVerify (DV), which hasn’t been able to bounce much even as the market has gotten off its knees. We’re not anticipating a huge new decline from here, but the odds favor there being much better, stronger leading stocks going forward. SELL DV.
That will leave us with around 45% in cash, which will hang on to for the moment—but we could put a bit back to work in the near-term should we see a good setup, and of course do more buying if the market continues to firm up. Today, though, we’ll sell DV and hold the cash.
We’ll have more details on all our stocks in Thursday’s regular update, and will have more special bulletins if we have moves before then. Don’t hesitate to email me directly at mike@cabotwealth.com with any questions.
