****Performance has been updated through 12/08/06 - please read through the following disclaimer and find the updated figures at the end of the post. Before I discuss Hedgefolios performance, I want to cover myself with some cautionary language. So here goes: Nothing in my performance quoting is intended as an advertisement or in any other way meant to encourage anyone to subscribe to Hedgefolios. Regardless, you should be very hesitant to rely on any newsletter’s performance figures unless they are audited or verified by an outside party. To be as transparent as possible and remove any question of Hedgefolios credibility, I am hoping to have audited performance figures by the end of 2006. Until then, you need to be aware that any performance figure on Hedgefolios is NOT in compliance with the CFA’s AIMR Performance Presentation Standards and does not net out any transaction costs such as commissions or management fees. They are not a total return calculation as I do not include dividend yields or any compounding factor. These performance figures cover a hypothetical portfolio of the entire Hedgefolios stock universe with an equal weighting of each security. The calculation is simply the cumulative total of all gains and losses from the signals during the period in question. All this being said and under those parameters, Hedgefolios performance for stocks:

• 2005, the Hedgefolios performance was +19.99% vs. +3.00% for the S&P 500 index
• 2004, the Hedgefolios performance was +31.19% vs. +9.00% for the S&P 500 index

As the year goes forward, I will update this post periodically to let everyone know how Hedgefolios is doing.

UPDATE:

HEDGEfolios stock performance for 2006 year-to-date (through 12/08/06 close) was up 25.69%.

Over the same time period, the S&P 500 index was up 12.94%.