WHAT TO DO NOW: The market is acting powerfully since Tuesday’s election, and we’re seeing some outsized moves on earnings this week. We’ll have our full update of Growth Investor tonight, but this bulletin concerns AppLovin (APP), which is skyrocketing this morning after earnings, and of course, this comes after a big run. We’re going to lean against the wind here and take some partial profits, selling one-third of our position and holding the rest. Again, more color tonight.
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The market is up again today, though it’s more disjointed than yesterday—as of 10 am, the S&P 500 is up 0.5% while the Nasdaq is up 1%.
Happily, many of our stocks have done well this week along with the market, which has spiked in the near term following the election. Of course, we still have today’s Federal Reserve decision (most likely a quarter-point cut) to get through, but so far, so good.
Today’s bulletin is about AppLovin (APP), which reported a great quarter last night that sent the stock up huge after hours—and so far today it’s continued to rally, with the stock up a total of 50% from last night’s close! Long term, we think the stock can move higher because of the fundamentals (massive cash flow and earnings crushed estimates) and chart (obviously strong, but it’s “only” eight weeks from its breakout area). If you happen to own a small position, we’d probably just hang on and ride the ups and downs that are sure to come.
That said, right now, we have a huge position in our Model Portfolio (north of 20% of the account) and the stock is clearly extended, so we’re going to take advantage of today’s huge move and take some partial profits—we’ll sell one-third of what we have into this move and hold the rest. Even after the sell, we’ll still have a pretty big position in the stock. SELL ONE THIRD OF APP, HOLD THE REST
We’ll have more details in tonight’s update. Don’t hesitate to email me directly (mike@cabotwealth.com) if you have any questions.
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