January 12, 2009

Happy New Year!  Let’s hope, from an investment prospective it is better than last year.  The DOW opened on 1/2/2008 at 13251 points and closed on 12/31/2008 at 8668 points.  What a huge loss.  To add insult to injury, the bond market (which usually goes up nicely in Bear markets) either tanked or barely (pun intended) went up.  A $50 billion Ponzi scheme collapsed, we saw oil reach $140+ a barrel.  The credit, housing, and auto industries as well as other industries all found themselves in crisis.  The almighty Leman Brothers and Merrill Lynch, along with other highly regarded Wall Street firms are either gone or have been bought.  The Hedge Funds, Long/Short funds all failed with the typical MBA and PhD saying our computer models didn’t plan for this type of event.  There was virtually nowhere to hide.  Looking at 2008 from a historical prospective we have elected the first Black man to be our President, the Iraqi war is coming to a conclusion and the Afghanistan war is heating up, with the Middle East still in turmoil.

As I mentioned in my last quarterly letter, as a firm our biggest position was and is cash.  I wish we had more.  Now comes the hard part of trying to decide what to buy and when.  Everyone now knows what it is like to live through a Bear market, the good news is that it will pass, although I’m not clear on when.  Again, I thank you for being my client and friend, please call with any questions.  On a positive note, I am finding some undervalued stocks (there are not as many as I would like) but more are showing up every day and as I find them we will buy them.  The broad market, believe it or not, is not yet cheap.  I look forward to seeing you soon.  I hope that 2009 will see the end of the recession.

Sincerely,

Willis

Willis Ashby

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