It’s one thing to exit the market, quite another to know when to get back in – Robert Freedland (NVS, WNI)

Author: Bob Freedland

Covestor model: Healthcare

Disclosures: Long NVS, WNI, BAX, HMSY, ISRG, MWIV, QSII

August has seen one of the bigger corrections the market has experienced over the last several years. Health care stocks have been taking it on the chin, as much of the decreased spending discussed in the debt ceiling negotiations involves health care.

With the market showing growing weakness in the days before and after the conclusion of the debt ceiling controversy, I began to shrink the size of my individual holdings, selling off shares in Baxter (NYSE: BAX), Catalyst Health Solutions (NASDAQ: CHSI), Cooper (NYSE: COO), HMS Holdings (NASDAQ: HMSY), Intuitive Surgical (NASDAQ: ISRG), MWI Veterinary (NASDAQ: MWIV), Quality Systems (NASDAQ: QSII), Meridian (NASDAQ: VIVO) and adding a new position in Novartis (NYSE: NVS), and Schiff (NYSE: WNI).

While seeking to participate in any rally that should develop, I am also committed to reducing downside risk as much as possible. I’m glad that I raised my cash position slightly ahead of this market downturn. Going forward, I do not know how this will work out, but I anticipate that as any investor soon realizes, it is one thing getting out, even partially, of the market. It is another thing entirely to know when to get back to fully invested. I shall continue to work to identify stocks of greatest promise demonstrating a persistent ability to grow revenue, earnings and free cash flow.

With an aging population and the ever-changing technology of health care, opportunities continue to present themselves and I shall try to identify these stocks. Meanwhile, I’ll ‘batten down the hatches’ and hope to ride out this storm relatively intact.

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