By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements .

Dear Clients,

I am preparing my Quarterly Update along with your performance reports and fee statements. I’m aiming to mail them out by Friday, but there are some analyst reports coming out at the end of the week that I’m waiting for so I might not get them out until Monday. In the interim, I wanted to report on your account performance so far this year:

Here is how my performance measured up to the averages on a YTD basis:

The quarter provided a lot of excitement in the market that resulted in losses in most portfolios. The S&P 500 had its worst quarter since Q3 of ’02 – near the bottom of the worst bear market in 70 years. Given that Q1 is typically a strong quarter for equities coupled with the monumental easing by the Fed, this is not a positive omen for the market.

The market has seemed to grab some traction as the government has provided a backstop to the financial sector on March 16th compliments of the US taxpayer. Since all the fun began last August, the fed has pledged over $1,300 for every man, woman and child in America. Fortunately, while our government has been increasing the liability side of your personal balance sheet, I’ve been increasing the asset side.

My performance for the last quarter has been pretty remarkable even though I gave a nice chunk back in March. I explained it to one client that “we went in at half with a 30 point lead but only won by 20”. (He appreciated the sports analogy which McCracken’s are famous for.) So far this year, my Core and Focused Strategy have beaten the S&P 500 by over 24%. In a $1M account, that equates to a $240,000 advantage.

Equities were severely oversold and commodities were equally overbought so a move back to the mean was expected (not necessarily welcome, but expected). The good news is that the long-term fundamental outlook for my strategy improved significantly this past quarter. But the technical short-term outlook is less favorable and I expect that many of our best performing positions might continue to correct. For that reason, I’ve reallocated a fairly significant percentage of your account to lock in profits while trying to find some risk-friendly returns over the next few months. I’ll cover all of this in detail in my report.

As always, please do not hesitate to call me if you have any questions or concerns regarding your account.

All the best,

Matt