Condition Bear Market
S&P Target 940
Hedge XLE 9.96% Closed
Hedge XLF -3.45%

Position Date Return Days Call
BKI 5/31/2011 4.32% 127 Hold
CFI 6/22/2011 -3.76% 105 Hold
SE 6/27/2011 -5.56% 100 Hold
AWR 7/5/2011 -3.64% 45 Closed
CLH 7/6/2011 -7.34% 91 Hold
GCI 7/14/2011 -23.14% 83 Hold
AGO 8/5/2011 -11.86% 61 Hold
DISH 8/10/2011 12.63% 56 Hold
GTAT 9/8/2011 -32.48% 27 Hold
CSGS 10/3/2011 2.39% 2 Buy

Mousetrap Return -6.84%
S&P Return -8.97%
Hedged Return -0.34%

Mousetrap Annualized -35.86%
S&P Annualized -47.01%
Hedge Annualized -1.77%

Annualized Advantage 11.15%
Hedged Advantage 45.25%

Because the Mousetrap is hedged, 9 positions (i.e. 90% long and 90% short) is fully loaded. When the bear market finally bottoms out I’ll be able to lift the hedge and add the 10th long position.

Until then, I’ll rotate when necessary. CFI is the closest to being terminated in the near future.

The idea from here is to simply wait until one position reaches a sell point and then rotate into a new position on a straight swap. But now, no further actions are called for until then.

My condolences to the family and friends of Steve Jobs. In all of the math and fury we sometimes forget that there are real people behind these stocks – who often change our lives for the better in ways that cannot be calculated on a spreadsheet.

Tim