I have not done a pledge update in ages, which quite a few readers have emailed me I should be doing more often to keep reinforcing the reason for the blog. They make a good point, so I am trying to train myself to be a bit more self promotional.

The #1 question I am asked each week is when do you start. My answer is always the same - it is not up to me, it is up to potential investors. When I see enough capital ready to go that won't cause me to lose $150K a year running the fund, I'll go. We actually were getting mountains of pledges this time last year before the market imploded in September & October 2008; which I believe drove out many retail investors from the market. I suppose for mutual fund purposes, as much as I scoff at green shoots I should be rooting for a market that only goes up 30% a year, to inspire confidence in those who have been burnt repeatedly by the stock market this decade. But since we are ambivalent on market direction in our strategy I tend to not care too much about which way the market goes. But obviously up, up, up is better for the masses.

Anyhow, the days of getting $600-$700K a month in pledges seem to be gone but I assume anyone who has pledged in 2009 has some tough skin after what you've experienced the past few years. For newer readers, we started a new pledge sheet this January [Jan 6, 2009: New Pledge Sheet - Obama Era 2.0] since the crash within the crash (Sep/Oct 08) changed the landscape, and I assumed some of my older pledges were not going to be valid. Of course than we had another crash mid January to early March. ;) Nothing easy. But I am confidant we'll get there.

I will work on updating this sheet on a more regular basis and being more promotional if you will about it, with reminders more often than say once every 6 months. Let me copy the same caveats for pledges as I listed in January here:

  1. Assume a pledge amount that is firm based on a fund opening in 6 months
  2. Assume at any point in 2009 the market may be down 30% from here
  3. Make your pledge based on liquid assets that are not currently in some high octane mutual fund that loses 40% when the market falls 30%, nor gains 50% when the market gains 40%. That money is not something that can be counted on with the volatility in this market.

Same format as before: first name, last initial, pledged amount, and state you live in. To be clear, you are not sending me money that I'm going to hold until launch when you 'pledge' - you are simply making a verbal commitment: when you are up and running, I have $X amount ready to invest. You can attach a comment to this post or as most people do, send me an email (my address is found on the upper right of the blog) with the above information. I'd prefer an email if possible.

Here are the pertinent posts if you have not read through them

  1. The overall goal and why I'm aiming for $7 approx million [Jan 7: Reader Pledges Toward Mutual Fund Launch]
  2. Frequently Asked Questions [May 26: Frequently Asked Questions] Very important to read
  3. Why I need your state [May 23: Investment Pledges by State] Keep in mind a state's eligibility can be turned on overnight once we're up and running

Let me also throw in the Bernie Madoff sidebar

Q: How do I know you won't run off with my money?

A: Well, that would defeat the purpose of this endeavor and pretty much waste the last few years of my life, but over and above that I won't ever see your money. I will be paying a 3rd party source to handle just about everything outside of making buy and sell decisions. So as with any fund, you're going to be sending money, receiving paperwork, etc from someone I outsource to. No different than many smaller independent funds.


Updated list below of pledges - some people said I'd pledge but did not give an amount and others did not give a state; those are at the top. If you tried to pledge and don't see it on the list below - please email me, I might of missed it in the avalanche of emails. If you wish to change your amount, please email me as well.

B Shah

??? (no amount)
Bob B50,000AR
Ed S5,000AZ
Alan N15,000AZ
Armour B50,000AZ
Art H50,000CA
Benjamin W5,000CA
Dave K100,000CA
Greg B15,000CA
Kurt C10,000CA
Ron W10,000CA
Tom L25,000CA
Ted C5,000CA
Brian L50,000CA
Rich P30,000CA
Shannon V5,000CA
Sunil K10,000CA
Anatoly S10,000CA
Wesley W20,000CA
Burt B10,000CA
John L5,000CA
Alven Y5,000CA
Piyush M5,000CA
Paresh P5,000CA
Dinesh K5,000CA
Naresh P5,000CA
Jay S*5,000CA
Mark B*25,000D.C.
Vic C10,000FL
Wes T10,000FL
Ron*100,000FL (sailing)
Olivier N5,000FL
Bob H3,500FL
Chris I20,000FL
Sandy S50,000GA
Mark L2,500IA
Ian J5,000ID
Jay S10,000IL
Jake R50,000KS
Bill H5,000MA
Ralph B25,000MI
Scott L7,500MN
Tom S20,000MN
Marshall H5,000MO
Wolfgang S7,500MO
George L10,000NC
Brian C5,000NC
Colleen P5,000NC
Adam B5,000NJ
David B50,000NJ
Frank G500,000NJ
Henric B25,000NJ
Ryan T7,500NJ
Gary M10,000NY
Rob T10,000NY
Igor O*375,000NY
Jason N30,000NY
Tim C20,000NY
Atul R5,000NY
Rob #26,000NY
Adam M10,000OH
Justin K10,000OH
Dilip K5,000OK
Bill G10,000PA
Jatinder M10,000PA
Bruce R100,000PA
Robert T75,000RI
Heidi H25,000RI
Doris S*100,000SC

Dave S20,000TN
Joe P10,000TX
Doug M40,000TX
Jason D5,000TX
Zhong L10,000VA
Kevin L*125,000VT
Linda A15,000WA
Scott R60,000WA
Mike H2,500WA
Eric S40,000WA
Brian J5,000WI
Stan T10,000Z-Canada
Anurag V20,000Z-Germany
Ken50,000Z-Hong Kong
Tomaz K20,000Z-Slovenia
Ward P2,500Z-Sweden

Total $ 3,187,000

Goal $ 7,000,000

% of Goal45.5%

To Go $ 3,813,000

Performance Metrics Since August 2007

2009 YTD results here

I was working in another platform that did not allow individual shorting in 2007 and 2008 so I was handicapped in my strategy but you can see my first year results (Aug 2007 to July 2008) here. Short story: we beat the market by about 24% through July 2008 even with major handicaps to our strategy - i.e. only being able to employ HALF of it. Long time readers will know I called out many individual shorts that ended up falling 50-100% (Freddie Mac, Washington Mutual, Las Vegas casinos, restaurants, retailers, emerging markets, commercial real estate) yet we benefited not one bit from it - so I believe my 2007 and 2008 performance as solid as it was, is massively understated. In fact we tried to use Ultrashorts (since those were allowed in our old platform) as a hedge and even as the sectors fell 50%, we lost money on the Ultrashort ETFs - talk about insult to injury.

I compared myself to my peer groups in the mutual fund world during summer 2008 at various 1 month intervals, we generally were always in the top 10 (not top 10 percentile, but literally top 10 of all equity funds) and had some time as #1. Last time we looked was August 2008.

We left that old platform (Marketocracy.com) due to the reasons above, plus technical difficulties constantly encountered there fall 2008. So there is a window in my performance while I searched for something new I could use - we found Investopedia.com in January 2009. That 3 month window was marked by sharp losses in October and then gains in November and December 2008 by the market - I was only posting trades on the website at the time but have no track record for those 3 months.

So unfortunately I don't have a 2+ year track record all in 1 place, nor employing my strategy fully during those 2+ years... only since Jan 2009 can I say it's been what I wanted to do, but this gives you a 40,000 point of view of what we've been up to. My estimate is even with the handicaps of not being able to short for the first 16 months, I'd still have the top ranked record among all equity funds since August 2007, and by a long shot. Of course this is only a simulator and actual results in real world would cause more drag to performance, and last but not least I have to give the tagline - past performance is no guarantee of future results. But that's my resume.


To finish, while economic calls have no bearing on investment results, most of my big picture economic calls from 2007 - early 2009 are all listed for historical reference on my Economic Forecast / Track Record tab at the top of the page. I am also confidant that those calls were more accurate than 99.8% of the investment pundits who are celebrated on a daily basis.

The idea of the blog when I started it was to show my track record both on economic calls and investment results in a transparent basis, and hopefully excel. With that track record out in the open, I'd be exposed as a sham or not very quickly. Thus far I am content with what I have shown and the results achieved and if anyone has the time to read the 4500+ posts thus far - they can see for themselves. ;)

/End of Sales Job