April 23, 2009
Special Update for NDX’s Abednego and Shadrach Program Participants
Many of our customers have expressed concern over our lack of trading activity in the last few months, so perhaps now is a good time for me to provide a short commentary on what is happening in our primary market.
First of all, last year was an excellent year for NDX’s hog programs. It is not unusual in the lean hog market to experience a brief period of flat trading conditions after a long period of good trading opportunities.
Our programs are based upon models that have functioned well for more than 20 years. These models provide us with price and time entry points on certain seasonal spreads and outright positions. Right now, the lean hog market has diverged so far from historical norms that prudence and good money management practices dictate that the time is not quite right for our
normal seasonal trades.
For example, cash versus June contract prices at this time of the year is normally about $11 over. It is currently $16 over. In my view, the best explanation for this is that macroeconomic factors are having a tremendous impact on our market. I expect the impact of these factors to lessen over time and we will again return to historically normal relationships. However, in the short term, I refuse to risk our investors’ precious capital in a market that is so far out of line with
normal conditions.
From a long term perspective, I believe our programs’ future has never been brighter. Rest assured that we will continue to execute our programs with a long term perspective and with your best interests in mind. Thank you again for your continued trust and confidence in us, and have a great day. Past performance is not necessarily indicative of future results.
Best regards,
Phillip D. Herbert
Chief Executive Officer
NDX Capital Management LLC
