Through the first three months of 2009 we beat the stock market by 12%. We outperformed with big positions in healthcare, education and food — along with a good portion of cash. The market has turned up, but I remain cautious.
The market dipped below 6500 in March — and at the time many thought the Dow could go to 4000. We needed to be conservative to prepare for a worst-case scenario. On March 9th, the day after the lowest close in more than ten years, the Dow climbed almost 379 points in what could have been a trap.
The rally wasn’t confirmed until two days later. But by that time the Dow was already at 7170 — 11% off its lows. Now the market is up 23% from the bottom. I don’t want to buy high and get trapped. We currently hold more than 25% in cash, and I am waiting patiently for a pullback.
