Orange sheets - Money is doing better

Investment Manager's Letter September 2008

This month instead of the usual commentary I am sending something that I am sure you will like better. The orange sheets in your packet show the performance of your portfolio from September 1, to September 19, the double digit gains in this three week period have brought our portfolios back close to their all time highs at the end of 2007. I am sending these orange sheets because of the near panic conditions on Wall Street, and because I, as investment manager, suspect that your money is probably doing better than you expect. Maybe these orange sheets will offer some comfort. It is gratifying to me that we have been able to out-perform the S&P by at least 25% in the last twelve and a half months. Credit for this record of course goes to Berkshire Hathaway. Incidentally, Berkshire Hathaway is one of the stocks on the SEC’s "cannot short" list. It benefited from short covering on Friday, and will probably correct next week.

Looking forward, my investment manager's crystal ball is very foggy, but it says that the odds are that the current credit crunch will not end any time soon. As you will have noticed we had been buying through July and August, but started raise cash on Friday. You can expect our focus to be much more short term than normal as long current market conditions persist.

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