2006 Results for The Small Tech Prospector

Since March 16, 2006 (thru 12/29/06), based on notional, average invested funds of approximately $100,000, our open and closed Track Record net profits were $10,933 for a 10.93% gain while The Nanotechnology.com Small Technology Index (for chart) was up a mere 1.09% in the same timeframe!

This also exceeds the performance of the S&P 500 which was up 8.08% from 3/16 thru year end.

More incredibly, our performance was accomplished while the PowerShares Lux Nanotech ETF was DOWN 3.15% and the Merrill Lynch Nanotech Index was DOWN 10.68%!!

Nanotechnology.com’s Index was CLEARLY the most difficult for a professional trader to beat (as I expected it would be, and pointed out in the Index description you can view at Nanotechnology.com).

Our out-performance “destroyed” the other Indices. (as well as any other investment newsletter that we know of claiming any special nanotech know-how)

If you operated at full margin, you would have received a roughly 26.7% annualized rate of return!

7 Reasons Why Our Return is EVEN Better Than it Looks!

1. Risk-Adjusted returns are more important than just knowing the profit numbers and percentages. On a risk-adjusted basis, I believe our returns were/are exceptional.
2. We had NO POSITIONS in the market from time to time. For those days the risk to our capital was ZERO. Everyday with zero risk is “better” than a day with ANY risk, much less with “market risk”.
3. We had total positions totaling less than our $100,000 notional invested funds on MANY days. On those days our risk was lower than having $100,000 invested in any nanotech index.
4. Stop Loss Orders occasionally reduce profits (as when one is “stopped out” and the stock then soars to a profit or then declines sharply as with a short sale), BUT they ALWAYS help LIMIT RISK. An investment in “the overall market” or simply taking a continuous, passive position in a nanotech index does NOT have this protection. We ALWAYS had stop loss orders for our Track Record Trades at ALL TIMES.
5. Short Positions were a significant part of our approach and gave us HEDGE features, which all professional investors and economists agree lowers aggregate risk as compared to a long-only strategy.
6. TINY, especially, (a publicly-traded venture capital fund, that is a BDC – “Business Development Corporation”) and ARWR (a publicly-traded intellectual property “bank”) are sometimes confused (quite incorrectly) by the investing public to be proxies for “nanotech mutual funds” were DOWN 10.77% and 11.69% respectively for the timeframe.
7. Most of our non-Track Record recommendations made profits or saved money (often lots of money) for our subscribers – and we don’t even count them!