The market remains in an uptrend, but red flags continue to pop up—sentiment is very giddy and complacent by many measures, while our Two-Second Indicator is telling us the broad market is weakening. On the plus side, growth stocks have perked up a bit. Thus, we remain in a bull market, but it’s also clear risk is elevated. That’s the main reason we’ve held on to our strong performers ... but also held onto a decent chunk of cash (35% or so) to provide cushion should the sellers take control. Today, we do have one change: swapping out Salesforce.com with HomeAway, which we feel could be a new leader.
