Thomas Thurlow got scared last week, so he moved his

(THRGX)

Thurlow Growth fund entirely into cash. Even though the Palo Alto, Calif.-based fund company isn't shy about taking on huge cash positions, Thurlow says this is the first time he's yanked all of the fund's money out of the market.

"The

Nasdaq

appeared to be in much more of a bearish tone," says the manager of the $10 million fund. "But I don't believe that the time is right for puts and shorts because there is so much news that jerks the market around. It's not clearly downward enough to make some drastic moves."

So Thurlow abandoned his once-loved Internet stocks. Since last week, he's reinvested part of that cash in financial service stocks while he waits for Net stocks to revive.

Still, those moves haven't been enough to forestall the fund's deep decline. Through Aug. 10, Thurlow Growth is down 30.5% for the year, landing it in the bottom of the large-cap growth heap. In fact, in the last month alone, the fund has shed almost 19%.

"I just know that if I hadn't taken that move into cash, it would be a lot worse than it is," Thurlow says.

Previous market-timing moves last spring had disastrous results. (See our

June 6 story.) He built an 80% cash position in April in the midst of the Nasdaq swoon, then went back into stocks on April 25 in time to catch another 10% drop in the index the next month. He went back into cash in May and missed most of a tech recovery.

Thurlow says he's still bullish on Internet plays in the long term, just as he was in 1999 when the fund rocketed to a 213% return and landed in the top percentile among large-cap growth funds. And he even thinks the fund will end the year in the black as he anticipates a late-year tech rally. "I'd rather keep my powder dry," he says.