October 2011 COP Report 11/12/2011

Investment Gang

There are often reasons to say wow about the stock market, however in the last two months we had a big bust in September and a big boom in October and in both cases the boom and bust were neatly aligned with the full months. Since the COP strategy runs on monthly data, this caused the COP ratings to do take a large down turn followed by a large pop up --- wow. As you can see in the COP Model Update through September (Only on web site as “NEW: Research Model Update Report”)the model was doing quite well this year, up 6 to 10% compared to the S&P500 -9.55% at the end of September. However, the huge drop in the market data in September drove the Model’s top asset classes to very conservative asset selection being owned in October. Consequently, I expected the Model to have a big loss when the market boomed up 10% in October. Fortunately the conservative holdings only lost about 2%. So, the Model is still ahead of the S&P by 4 to 7%. Now, the market’s huge 10% rise in October has driven the model selection in to very aggressive holdings, such as Latin America, up 18% in October. So far that’s OK. The Model uses data from other months, however with two months like this you sure can’t tell it.

Best, Mal