John W. Henry & Company, Inc. (“JWH”) has over a quarter century of research, trading experience, and a disciplined systematic investment approach that has enabled its Chairman, John W. Henry to be one of the most successful traders today.

JWH’S fundamental belief that guides its trading centers on the premise that markets will always trend at one time or another and the best way to forecast major trends is by analyzing the price of a commodity, not its fundamentals. This belief is backed by one of the longest and best performance records capturing major moves in commodities and in the process earning $1.6 billion for investors since the firm’s inception of trading client assets in 1982.

Buy and hold works well in stocks if you get in near the lows. But if you get in near the highs at the beginning of secular bear markets it took 15 to 20 years for the market to make new highs. (1906-1921, 1929-1949, 1966-1982). The most recent secular bear market started in 2000. Nine years later most stocks still have not recovered from their drawdown to make new highs.

Compare the drawdowns and recovery periods in stocks and JWH’s current programs.

The period from 2005-2007 was marked by aberrant price action in many asset classes but most notably in real estate. It was a period where investment risk was seemingly being ignored or mis-priced. Evidence could be found in the declining levels of volatility in stocks, bonds and even hedge funds. This market environment was not conducive to the JWH style of trading where price movement and amplitude are often necessary to generate return. It was, in general, JWH’s worst period of performance since inception. However, all the years combined losses were more than made up in only one year, 2008, one of the worst years for investors. In 2008 JWH programs experienced some of their best years, led by the JWH GLOBALANALYTICS program returning 90.7% to investors.

Nature of trend trading: Trend traders generally make most of their profits in a few months of a year or in one year that can make up for several years of lack luster or poor performance. This has historically been the case in the majority of JWH programs. One can easily see this by looking at the JWH disclosure document. For example, let’s look at JWH Global Analytics Program. In its 13 years of performance history it has had only 3 down years with the worst year being down approximately 8% in 2006. That year was followed by an up 19% year in 2007 and up 91% in 2008. There was even a 17% loss in July of 2008. However, it was followed by returns in August, September and October respectively of 11%, 21% and 17% to help finish the year earning 91%. The other 2 down years were approximately -1% in 1999 and -4% in 2001. Both those years were followed by years returning in excess of 22%. If you look at the 5 programs offered in JWH disclosure document you will see similar performance where the good years and a few good months more than made up for lack luster or poor performance. We believe the key to success in an investment with JWH Vision is to look at it as you would a growth stock where you are more interested in the long term benefits it can provide your portfolio rather than simply the short term performance. In all of JWH’s current programs offered in their disclosure document, including their oldest ; Financials Metals Program (which has been trading 25 years), a 50% cut off point was never reached.

Looking ahead, we believe with interest rates near zero and the record trillions of dollars the government is pumping into the economy; it is a strong possibility that inflation will rise and with it long term major moves will occur in the commodities and financial markets. Can you think of a trader with better credentials and a long term track record of capturing major moves in commodities and financials than JWH? JWH however is not dependent on the economic cycle to profit.