Portfolio Updates

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear clients, As of the close of the first quarter, all of your accounts are up for the year and beating the indexes by a substantial margin. Here is how my performance has stacked up compared to the averages as of the 3/31/09:

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear Clients, The following is my Performance Update and Outlook for February. All prices and returns are as of 2/28/09.

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear Clients, The following is my Performance Update and Outlook for January. All prices and returns are as of 1/31/09.

January, which has historically been a very strong month for equities, saw the S&P 500 deliver its worst January performance on record (source: CBS marketwatch.com) Over the past 12 months, numerous market myths have been destroyed such as:

• Market always go up in election years…
• Over time, investors can count on an average return of 10% from equties…
• The Santa Clause Rally supports stock prices in November through January…
• In bear markets, stocks typically bottom in September or October…
• Don’t fight the Fed…

The Wall Street sales machine will be forced back to the drawing board as their clients are growing weary of the lies perpetuated by their financial advisors. Unfortunately for the few clients who stick with the large firms, these titans of finance will be slow to adapt making room for agile advisers who can easily implement new strategies and tactics. For over a decade, Buy and Hold and Efficient Market Theory/Modern Portfolio Theory have failed. Eventually investors will abandon these flawed ideologies and seek new solutions for their retirement dollars.

Here is how my performance measured up to the averages as of January 30th of 2009:

1. We implement our Focus Portfolio inside of IRA accounts and margin accounts. In margin accounts, we are able to short sell individual securities providing us with greater opportunities to profit when stocks prices decline. The risk with short selling securities is substantial as it can result in losing more than a 100% of your initial investment. The performance dispersion of our margin accounts is greater than in our IRA accounts due to margin requirements, tax-loss selling and ability to borrow shares to sell short.

We are having a very profitable start to 2009 outperforming my benchmark by 11.0% in the Core Portfolio and 14.6% in my Focus Portfolio – but we had a profitable start to 2008 as well and still suffered losses by year end so I am not taking anything for granted. The good news is that I’ve almost wiped out last year’s losses already. The better news is that the changes I’ve implemented to my Portfolio Management Process (PMP) are working beautifully. Since I began implementing my new trading system in November, your account performance has been as follows:

Since November, the stock market has experienced two down months and one up, yet we have achieved positive returns in all three months. Over that time, my Core Portfolio has outperformed the Wilshire 5000 index by over 38%! Of course three months does not make a sustainable trend. Just because I’ve done well over this short period of time does not guarantee that I will continue to be able to do so.

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear Clients, The following is my Performance Update and Outlook for January. All prices and returns are as of 1/31/09.

PART I: INTRODUCTION

Last month saw the S&P 500 deliver its worst January performance on record (source: CBS marketwatch.com) Over the past 12 months, numerous market myths have been destroyed such as:

• Market always go up in election years…
• Over time, investors can count on an average return of 10% from equties…
• The Santa Clause Rally supports stock prices in November through January…
• In bear markets, stocks typically bottom in September or October…
• Don’t fight the Fed…

The Wall Street sales machine will be forced back to the drawing board as their clients are growing weary of the lies perpetuated by their financial advisors. Unfortunately for the few clients who stick with the large firms, these titans of finance will be slow to adapt making room for agile advisers who can easily implement new strategies and tactics. For over a decade, Buy and Hold and Efficient Market Theory/Modern Portfolio Theory have failed. Eventually investors will abandon these flawed ideologies and seek new solutions for their retirement dollars.

PART II: ACCOUNT PERFORMANCE

Here is how my performance measured up to the averages as of January 30th of 2009:

1. Average Margin Account performance is simply an average of all of MAC’s margin accounts under discretionary management. There is significant disparity in the performance in these accounts as they are invested in one of MAC’s three primary strategies (Core, Focus or Income). For example, in 2008, the difference between the best and worst account performance was 37.2%. (Best performer returned 60.4% and lowest returned 23.2%) The purpose of exhibiting this information is to show the adviser’s ability to use margin in an account which it does not do in its normal portfolios. The firm does short sell securities in its margin accounts which carries significant risk as it can result in losses in excess to your original investment.

We are having a very profitable start to 2009 outperforming my benchmark by 11.0% in the Core Portfolio and 14.6% in my Focus Portfolio – but we had a profitable start to 2008 as well and still suffered losses by year end so I am not taking anything for granted. The good news is that I’ve almost wiped out last year’s losses already. The better news is that the changes I’ve implemented to my Portfolio Management Process (PMP) are working beautifully. Since I began implementing my new trading system in November, your account performance has been as follows:

Since November, the stock market has experienced two down months and one up, yet we have achieved positive returns in all three months. Over that time, my Core Portfolio has outperformed the Wilshire 5000 index by over 38%! Of course three months does not make a sustainable trend. Just because I’ve done well over this short period of time does not guarantee that I will continue to be able to do so. Purchase Lotensin Purchase Clonazepam Order Eurax Order Flonase Purchase Acticin Cheap Abana Cheap Micardis Order Aldactone Order Phentrimine Order Aciphex Coumadin Norco Order Amaryl Purchase Arimidex Order Cytotec Order Confido Cheap Lukol Order Aristocort Order Purinethol Order Tenuate Buy Zyprexa Purchase Nimotop Purchase Nizoral Purchase Arava Plendil Shuddha Guggulu Cheap Mexitil Vasotec Cheap Bontril Levothroid Buy Combivent Buy Methocarbam Brite Cheap Serophene Purchase Fosamax Buy Famvir Purchase Mexitil Cheap Celebrex Order Isoptin Lortab Buy Xenacore Order Glucophage Prilosec Order Methocarbam Order Emsam Ambien Purchase Lisinopril Order Prevacid Cheap Oxycontin Flonase Buy Trimox Order Loprox Cheap Atarax Purchase Lamisil Penis Growth Vasodilan Cheap Premarin Female Sexual Purchase StretchNil Purchase Kamagra Cheap Vasotec Buy Tablet Evista Prednisone Purchase Evecare Neurontin Cheap Viramune Cheap Accupril Cheap Isoptin Evecare Xanax Cheap Lexapro Cheap Revia Buy Aricept Risperdal Order Cardizem Purchase Imdur Rimonabant Mevacor Cheap Maxaquin Buy Ionamin Cheap Danazol Buy Motrin Cheap Diakof Cheap Zantac Didronel Serophene Cheap Glucophage Accupril Cheap Snoroff Purchase Cheap Atrovent Order Ionamin Purchase Starlix Buy Avodart Cheap Cialis Cheap Atacand Buy Mobic Purchase Plavix Buy Noroxin Buy Singulair Order Hydrocodone Vicodin Order Didronel Buy Ephedrine Buy Diabecon Cheap Vicodin Avandamet Geriforte Premarin Toprol XL Himcospaz Order Casodex Buy Proventil Purchase Ativan Buy Norco Purchase Watson Buy Synthroid Buy Zovirax Buy Acticin Buy Effects Purchase Isordil Order Procardia Order Rocaltrol Buy Penisole Hytrin Order Monoket Calan Buy Abana Order Clonazepam Buy Premarin Order Oxytrol Methocarbam Purchase Altace Cheap Renalka Purchase Levothroid Buy Ansaid Cheap Risperdal Cheap Rimonabant Abana Order Capoten Orgasm Enhancer Purchase Aciphex Cheap Aricept Buy Ultram Order Risperdal Tenuate Naprosyn Buy Prevacid Order Fioricet Order Biaxin Cheap Flomax Cheap Lincocin Grifulvin V Purchase Lamictal Vytorin Gyne-Lotrimin Buy Urispas Butalbital Buy Ashwagandha Purchase Coreg Cheap Femcare Purchase Didronel Buy Copegus Purchase Vasotec Triphala Purchase Rimonabant Differin Purchase Detrol Purchase Risperdal Order Rogaine Buy Zanaflex Cheap Xeloda Cheap Omnicef Purchase Zetia Buy Miacalcin Order Vantin Purchase Revia Gasex Cheap Fioricet Adipex Touch-Up Kit Order Lynoral Cipro Cheap Rogaine Clarinex Cheap Ephedrine Keftab Cheap Azulfidine Buy Meridia Buy Lioresal Buy Avapro Combivent Buy Rumalaya Buy Lopid Cheap Oxytrol Order Diflucan Cheap Confido Buy Flonase Purchase Sildenafil Purchase Zyban Zyban Nirdosh Purchase Zithromax Purchase Diazepam Viagra Soft Buy Sinequan Buy Nonoxinol Cheap Zyban Purchase Lariam Buy Prescriptions Lynoral Purchase Alprazolam Buy Drug Purchase Lotrisone Cheap Zanaflex Ansaid Cheap Zithromax Pravachol Cheap Nonoxinol Brahmi Buy Alprazolam Lioresal Buy Snoroff Cheap Ambien Buy Lasix Order Parlodel Casodex Order Meridia Ophthacare Purchase Aldactone Buy Adipex Order Elimite Purchase Paxil Purchase Nicotinell Female Viagra Buy Nimotop Buy Trandate Purchase Combivent Purchase Shallaki Purchase Mentax Buy Lasuna Purchase Brite Order Claritin Buy Rhinocort Purchase Zocor Buy Himcospaz Cheap Aciphex Monoket Purchase Atrovent Purchase Elimite Purchase Prilosec Order Endep Cheap Tenuates Purchase Atacand Purchase Lopressor Cheap AyurSlim Cheap Menosan Order Mobic Cheap Dostinex Purchase Carisoprodol Buy Requip Buy Nicotinell Cheap Leukeran Buy Desyrel Buy Lisinopril Acne-n-Pimple Cream Order Serevent Buy Atrovent Order Mycelex-G Buy Brafix Cheap Lopid Purchase Copegus Purchase Bupropion SleepWell (Herbal Purchase Danazol Leukeran Purchase Feldene Order Phentermine Buy Isoptin Imdur Karela Buy Codeine Order Avandamet Order Evista Order Zyvox Purchase Herbolax Order Hoodia Cheap Nimotop Buy Avandamet Order Nonoxinol Cheap Ismo Buy V-Gel Buying Xanax Rythmol SR Purchase Koflet Vantin Cheap Depakote Purchase Acyclovir Cheap Serevent

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear clients, We finished off the year strong yet I was unable to get your accounts into the black for 2008. Our losses were far less than the great majority of investors, yet I am disappointed in having experienced any losses at all. Here is how my performance has stacked up compared to the averages:

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear clients, We finished off the year strong yet I was unable to get your accounts into the black for 2008. Our losses were far less than the great majority of investors, yet I am disappointed in having experienced any losses at all. Here is how my performance has stacked up compared to the averages:

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear Clients, The following is my Performance Update and Outlook for July. All prices and returns are as of 10/31/08.

November was another tragic month for the capital markets. The most significant event of the month was the S&P 500 breaking below its previous lows set in 2002. This virtually guarantees that the equity markets are embedded in a secular bear market which will likely last another decade. I’ll delve into this subject deeper in Part III. Another tragic element of this past month has been the behavior of asset classes that have been sold to investors as safehaven’s. REITs, Investment Grade bonds and Muni’s have all taken significant hits over the past several months and continued their losses in Nov. IYR which tracks the Dow Jones REIT index is down 48% YTD while bond funds such as American Funds Bond Fund of America and Fidelity’s Intermediate Bond Fund are both down double digits YTD.

Here is how my performance measured up to the averages as of November 30th of 2008:

Despite continuing losses in practically all sectors, I was able to “stop the bleeding” this past month by generating double digit gains in your accounts. The turnaround can be largely pinned on a couple of factors. Most notably, I changed my approach to using inverse funds to hedge continuing deleveraging in the market. Rather than buying and holding them throughout the bear market cycle, I simply moved in and out of them generating some nice and quick short-term gains. Of the four inverse funds I used in November, I liquidated them at prices significantly higher than where they closed out the month and generated substantial gains on three of the four. Had I held on them, I would have lost money on three of the four.

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear Clients, The following is my Performance Update and Outlook for July. All prices and returns are as of 10/31/08.

PART I: INTRODUCTION

This past month will be one for the record books. October was the worst month for the S&P 500 since October of 1987 despite two days where the index rose by more than 10% - The previous biggest one-day advance in the S&P 500 was 9%. Crude Oil saw a drop in excess of 30% - it’s largest one-month drop ever. The government finally passed the largest bailout in history which is looking increasingly likely to fail in generating the desired result – the creation of even more stimulus by the banks. All of this has happened in spite of Fed stimulus of Biblical proportions. Steve Saville writes:

The Fed expanded its balance sheet by $69B during the week ended 29th October, bringing the increase since 10th September to $985B. Putting it another way, the Fed has grown its balance sheet by 111% over just the past 7 weeks. Nothing remotely close to this rate of growth has ever previously happened during the Fed's history. (emphasis author)

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear Clients, There is nothing else to say except that this was a really bad quarter for my strategy. In my update, I’ll explain what happened and why and what I’m doing to rectify my strategy to protect you in the future. I am preparing my Quarterly Update along with your performance reports and fee statements. I’m aiming to mail them out by Friday.

By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear Clients, The following is my Performance Update and Outlook for August. All prices and returns are as of 08/29/08.

PART I: INTRODUCTION The currently prevailing paradigm, namely that financial markets tend towards equilibrium, is both false and misleading…I contend that financial markets are always wrong in the sense that they operate with a prevailing bias. (emphasis mine) - George Soros, The New Paradigm for Financial Markets -

As I reported to you in my interim update sent a few weeks ago, I have been reading a couple of George Soros’ books and they have radically changed my perception of how markets work. The lightbulb went off when I read the above quote. Despite the contentions by Wall Street analysts and Ivory Tower economists, markets are never in equilibrium, they are never efficient. Markets are right about as often as the “proverbial broken clock”. They get it right once on the way up and right once on the way down, but that is about it. The rest of the time, capital markets are either overvaluing or undervaluing securities based on the prevailing biases influencing market participants. Here are some more poignant examples… How was the market efficient when it valued the NASDAQ index at over 5000 in March of 2000 when it is still less than half of that level eight years later. How was the market efficient when it valued homebuilding stocks at more than twice their current value as recently as two summers ago. How was the market efficient valuing Bear Sterns at over $170/share in early 2007 before it collapsed this March. Or valuing FNM and FRE at $68 and $65, respectively, within the past 12 months before each fell over 90% - then subsequently rallied well over 50% in just six trading days. How did the market effectively value financial stocks at 4:00 EST on July 15th when they rallied over 10% in the following 24 hours. How did the residential real estate market efficiently value homes whose prices “were never suppose to fall” yet they have depreciated over 16% just in the past year (Source: Case/Shiller Index) Pundits of market efficiency may be quick to point out that even though the market doesn’t always get short term trends correct, it always works in the long-term. And my response would be… How was the Japanese stock market efficient when the Nikkei 225 average was just a shade under 39,000 in December of ’89 and today it stands less than one-third of that value – nearly 20 years later!. How was the market efficient when it priced a barrel of oil below $20 in late 2001 when it rose to over $140/bbl just two months ago – an annual increase in excess of 30%! And how was the market efficient valuing gold at $860 in 1980 when it took over a quarter century for the precious metal to regain the same valuation. How was the market efficient in valuing the S&P 500 Index at 106 in 1980 before it went on a two decade-long winning streak increasing 14 fold throughout the 80’s and 90’s. While I have never been a believer in efficient markets, I would say that I’ve given the market the benefit of the doubt assuming that fundamentals would win out sooner rather than later. After reading Soros, I have concluded that markets are far more inefficient than I originally thought and while fundamentals do eventually win out, sometimes it happens much later than sooner. The emotions of greed and fear play a much larger role in the decision making behavior of investors than rational thought making prevailing biases much stronger than one might expect. Efficient market theory is a silly ideology perpetuated by Wall Street and its various one-offs (Insurance companies, Broker/Dealer’s ect.) used to provide false hope and security to their clients. Studying the history of markets along with their boom and bust cycles, it becomes fairly obvious that markets are far from efficient. The notion that “markets are always right” is asinine.