2011 Final Numbers and Performance

2011 was a good year for WSR. We finished the year (12/28/2011) with a +166% return. Although we sat out most of the year, the times we did participate were during hyper-volatility. It seems that we really enjoy market uncertainty and turmoil. We thrive on it. It may seem odd to some (if not many) that we consider +166% return to be only a "good" year. The truth is, we were not very happy with our performance. We thought we could have had a 500% or more during the June, July August, and September months. Market turmoil like that doesn't happen very often and you have to be prepared to make a fortune during those times. It is a rare occurrence when the large institutions are confused and vulnerable as they were during those months. It is during those times that the quick and the nimble can take advantage of the "collective mediocrity" that is so prevalent in our investment system. We say this; not to be arrogant, but to draw attention to the lack of individual research. Most money managers today are coming from the same school of thought ( thus the extreme market correlations) and this makes for easy "kills" on the "herd". We have learned 10 years worth of knowledge that was squeezed into a 4 month cycle. We did this by networking with many of the programmers and and Algo traders that control 70% of the volume. We had the opportunity to play "live" in one of the most violent market environments of the last two decades (at least) and not only survived, but prospered. It was amazing! I could go on and on; however, I suggest you just read our report to be sent out Jan 3, 2012.

I hope all our clients and readers enjoy the holidays with their loved ones and the more important things in life. We will see you in 2012!

Market Update: Boring!

As we discussed a couple months ago, the markets are churning. Our decision to remain on the sidelines becuase you wouldn't miss much was good advice. We considered the post Thanksgiving Day bull bet; however, decided to enjoy family and friends instead. The markets have been churning in a tight range with no real direction. The daily movements are only for the gamblers and insiders at this point. The markets are looking for a catalyst.

Update: The technicals do not bode well. There is a 40%-50% chance of forming another double-top. Retail interest and confidence in the markets continues to wane. Our observation of the trading floor is that nothing is happening. The traders look bored. The financial media continues to churn out old news and soveriegn grandstanding. Quite frankly, there is no news or it is being recycled. Volatility is aproaching 6 months low and the trade junkies are closing out their positions for the year.

Strategy: Wait and Watch. Pick low points. Resist the urge to action because you are bored. The trades will present themselves as they drift lower to attract action. Our guess is that 2012 will begin with a volatility wave.

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