Maximum Drawdown

Maximum Draw down is simply the largest draw down experienced by an investment strategy during the period of time under study. The world's largest hedge funds are now down 10% or more from peak to trough as measured from last summer...This has many "investors" wondering how can that be? Now redemption's are under way and the deleveraging continues...this will take years...the over head at these trading shops is too high so the industry will shrink. Same with the commercial banks and broker dealers...as risk is re assessed the cost of capital goes up and thus the returns go down...just wait till taxes go higher next year...the returns will get even worse. ROE (Return On Equity) peaked in the summer of 2007. This why the group of all things related to financial services will be flat for years to come...especially as investors are still way over weighted in them...

The crowd is just starting to enter the commodities arena.....the move has a long way to go...

Reflationary pressures are global now and building...the mind set for the true cost of water, electricity, energy and food is about to take a major leap higher. People have to get used to paying more for everything....protected real income and savings after tax becomes paramount in this environment.

As Mr. Putin said to President Bush this weekend, "Lets be friends, guys, and be frank and open." Good advice....

We believe gentleman can always reach agreement.

Mr . Buffet said over the weekend in an interview: "We want to invest in innovators not imitators, the smart way to invest is... get in over time, no one can call a top or bottom, if you can do this and keep your costs (tax, transaction fees) low... you beat the crowd 90% of the time verses transferring your profits to people who buy and sell."

"The obvious is obviously wrong," said Joe Granville.....an old market timer.

Danny Boy seen here has my full attention