For 2012 I managed to beat the S & P 500 on a cash basis but slightly under perform it including dividends.  For 2012 the S & P 500 returned 13.41% on a cash basis and 16% over all.  To say that 16% total return in the S & P 500 is good is an understatement - 16% is stellar given the uncertainties that remain in the economy and world generally.  Of course, when the dollar’s value is being undermined by all the printing…

On my front, I was able to close the year @ 14.4% net (so minus commissions, etc.).  Here’s the equity curve:

The good news is I ended on a high-note without any significant draw downs in the second half of the year.  And just to keep us all on the same page here, this was accomplished purely from being short and most often over-night so the return correlation is very low to the over-all market.

For the year, according to this nice write-up by ZeroHedge, “88% Of Hedge Funds and 65% Of Mutual Funds Underperform Market In 2012”.  So, to say it wasn’t easy to hang with the benchmark index in 2012 is also an understatement.

2013 is looking like more of the same, but one of these days things will change.  This sort of reminds me of 2005 to early 2008. Everyone knew real estate was screwed but everything kept going up anyway. This can go on a long time, but lets not kid ourselves here, nothing has really been solved. The Fed has just shifted the debt problem from the banks to the tax payers. When this breaks, and it will at some point, it will be just like 2008 where the shit hits the fan and everyone seems all surprised (e.g. Bear Stearns went from ~$80 / share at the beginning of 2008 to being basically bankrupt and purchased by JPM for $2 / share by March - and that was down from ~$160 / share in March of 2007!).

In my experience the market does very little discounting, but it does know how to sell once the forced selling starts.  I’m buying long-dated calls on inverse gov bond ETFs.  I suggest you figure out how to make some money off of the gov debt bubble as well.  Good luck.

Another cool science vid…

A physics teacher with an important message (from the NYTimes)…

Haha, great remake!

Next Christmas I want this coffee table and a giant vat of liquid nitrogen to keep refreezing the puck!

It is Christmas Eve so I thought I’d post a few trees today.

First up, the Rockefeller Center Christmas Tree from my trip to NYC a few weeks back:

Then this smaller, but very nice, tree in the AA Terminal at LAX last week:

And finally, an interesting ‘tree’ from Nanex, the high-frequency trading analysis guys (yes, geeky!).  Here’s their description, “Image created from plotting 2,140 canceled orders in a 10 second period in the symbol DTYL. The chart looked like a fallen Christmas tree, so we rotated and animated it. Happy Holidays from Nanex.”

Link to their page HERE.

First up this cool overview on companies and investing by Bill Ackman who runs the Pershing Square hedge fund.  Especially good for teens who might be interested in business and investing, but useful for everyone to watch IMHO:

And, for dessert, the funny and very well done NASA ‘Johnson Style’:

I don’t know what’s going on, but here’s another Scottish singer / song writer - Alex Cornish.  A friend turned me on to this guy and he’s quite good.  This song is a bit on the mellow side, and I couldn’t find a studio version of it, but the version below is quite good.  Alex needs more air time for sure.  Enjoy.

Really great little RSA-type drawing animation on 6 ways to influence people’s decisions.  Worth the ~12 minutes, especially with a cup of coffee / tea before you get rolling Monday morning.

I had no idea the Foo Fighters had done this tune with Norah Jones.  I have a soft spot for the Foo Fighters because a bit of Nirvana lives on in the band in the form of Dave Grohl (the drummer from Nirvana & founder of the Foo Fighters).  This is a great, mellow tune, unfortunately there doesn’t appear to be an official video for it which is ashamed.  Below, after the song, is a cool clip on the collaboration.  Enjoy.