Performace Update 06Q3

The portfolio is up 8.55% for the three-month period, beating S&P 500 (+5.23%) and Nasdaq (+3.96%). The gain also more than made up for the big loss suffered in May. The quarter was a good but not great one:

• The positive: I was almost error-free while beating the market.
• However, the volatility-adjusted performance actually under-perfomed the market. The reasons for the under-performance are
  
1. the high volatility during the previous quarters which was used for the adjustment calculation, and
   
2. the relative poor performance of small-cap stocks which I own. The Russell 2000 index, which includes mostly small cap stocks, only increased 0.1% during the 3 months. It was the large cap stocks that has been doing great lately, which propelled the Dow Jones Industrial Average to near its all-time high.
   

For the year, the portfolio is up 42.1% to date, handsomely beating the S&P500 index, which is up 8.3% YTD, and the Nasdaq, which is up 2.4% .

The table below shows more comparisons between my portfolio performance with those of different indices in US and China (ex. dividend for indices), with the two best and worst performers for each time period highlighted.

	Last 3-months	Last 12-months	Since 12/2001
Dow Jones	4.7%	10.4%	16.5%
S&P 500	5.2%	8.7%	16.4%
Nasdaq	4.0%	5.0%	15.8%
Russell 2000	0.1%	7.6%	48.5%
My Portfolio	8.6%	42.6%	556.0%
Hong Kong	7.8%	13.7%	53.9%
Shanghai	4.8%	51.6%	6.5%

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Next Update: in 3 months.