MODEL PORTFOLIO
SEEKING ABSOLUTE RETURNS
2nd April 2009
Sound Advice
EquityBell Securities was set up in October 2008 by a collective of seasoned market professionals to provide
outstanding investment advice to clients running non-discretionary portfolios through direct market access
brokers and wealth managers. The credo is absolute returns by giving sound advice in asset classes that are
individually appropriate to the risk appetite and base currency of each particular client.
The EquityBell Securities leveraged model portfolio was started on 27th January 2009 as a paper trade with an
initial value of £100,000.
The portfolio currently has an NAV of £96,948 -3.05% in 66 days* Starting Value £100,000
Leverage 1.68 times
Portfolio NAV £96,948
Loss £3,052 -3.05%
Only our most robust investment ideas will be placed into the portfolio explaining the
rationale, entry price with comments on reasons for holding and explanation of the exit
Loss taken £3,795
and price and net profit and loss.
Current Positions
Open trades
FX
Date Asset size FX price value margin Price value £ P/L
Short USD vs long NOK
now
26/1/2009 MRW Long GBP 258.00 25,026 7,500 267.75 25,972 946 Short US Dollar Index
shares 9,700
Future
CFD’s
26/1/2009 SBRY Short GBP 309.75 -25,012 7,500 320.76 -25,901 -888
Commodities
shares 8,075
CFD’s Short 50 ozs Gold
27/3/2009 USD / Short USD 6.9094 -50,000 2,000 6.5529 50,431 293
NOK $50,000
Fixed Income
27/3/2009 US Short 1 USD 84.85 84,850 2,230 84.98 84,980 -88
Dollar contract none
Index
June 09
Equities
Futures
Food Retail Spread
2/04/2009 Gold as Short 50 US$ 916.25 45,812 1,832 901.7 -45,085 494
a FX ounces Long Morrison CFD 258p
Short Sainsbury CFD
309.75p
THIS IS A MARKETING COMMUNICATION
Intended for information only and should not be construed as an invitation or offer to buy or sell any investment vehicle or
instrument. This note has not been prepared in accordance with legal requirements designed to promote the
independence of investment research; and is not subject to any prohibition on dealing ahead of the dissemination of this
marketing note. EquityBell Securities will provide extra detail on data or graphs used in this note upon requested.

MODEL PORTFOLIO
SEEKING ABSOLUTE RETURNS
2nd April 2009
Sound Advice
Closed trades
Date Asset size FX price £ value margin Exit Exit £ P/L
date price taken
26/1/2009 EURJPY Short EUR 118.606 92,988 2,800 02/02/ 113.35 4,155
FX 100k 2009
26/1/2009 Carrefour Long €50k EUR 26.495 50,341 7,000 04/03/ 24.97 -2,580
shares CFD’s 2009
26/1/2009 LVMH Short EUR 43.42 -50,367 7,000 04/03/ 45.25 -1,890
shares €50k 2009
CFD’s
26/1/2009 June Gilt Short 1 GBP 118.71 118,710 3000 05/03/ 122.00 -3,290
Future 2009
26/2/2009 Gold Long 100 USD 913.5 91,350 1300 16/03/ 926 921
10/3/2009 ozs 2009
25/2/2009 EURUSD Short EUR 1.2786 88,152 1,763 18/03/ 1.3080 -2,113
FX 100k 2009
18/3/2009 UST 1o Long 1 US$ 121.50 121,500 2,700 20/03/ 124.875 2,318
yr June contract / 2009
future GBP
26/1/2009 MRW Long GBP 258.00 50,052 7,500 20/03/ 240 -1746
shares 9,700 2009
CFD’s
26/1/2009 SBRY Short GBP 309.75 -50,024 7,500 20/03/ 307 222
shares 8,075 2009
CFD’s
24/3/2009 Gold Long 50 USD 922 46,100 1,844 01/04/ 928.0 208
ozs 2009
*These are gross figures that do not include commissions and funding charges on some products
FX
We have previously covered how the US and UK are printing money within quantitative easing which should
depreciate the US$ and Sterling.
At the G20 meeting in London, both China and Russia are calling for a new reserve currency. They both appear
keen on expanding on an internationally recognised basket of currencies created by the IMF in 1969 called the
Special Drawing Rights (SDR). SDR comprises the US$, Yen, Euro and Sterling and is only used for
international accounting like setting the maximum goods carried liability of airlines. The Chinese want to establish
a new basket global reserve currency, managed by the IMF that can be used for trade, bonds and borrowing.
This is because there is no other bond market of the same US$2 trillion size as the US market that can
accommodate US$ sellers.
In August 2005, China revealed the Renminbi currency (CNY) is fixed against a basket of world currencies that
comprise the US$, the Euro, the Japanese ¥en, and the South Korean Won, with smaller weightings of UK
Sterling, Thai Baht, Russian Ruble and the Canadian, Australian and Singaporean dollars. The weightings of the
components within the basket are undisclosed, but analysis reveals the Japanese ¥en, Euro and Korean Won
have a greater influence than the US$.
What most commentators appear to have missed is that China’s currency is pegged to a basket that is
remarkably similar to the SDR. The Financial Times reported today “China, which is pushing to end the
dominance of the dollar as a worldwide reserve, has agreed a Rmb70bn ($10.24bn) currency swap with
Argentina that will allow it to receive Renminbi instead of dollars for its exports to the Latin American country”.
Harmony is the key objective G20 meeting in London as no one wishes to undermine the fragile confidence
politicians are trying to foster with the US$821 billion of G20 stimulus which is 1.5% of 2009 GDP.
While it will take many years to set up SDR as a liquid reserve currency alternative, rhetoric at the G20 may
weaken the US$ in the near term.

MODEL PORTFOLIO
SEEKING ABSOLUTE RETURNS
2nd April 2009
Sound Advice
The US Treasury announced on 17th
March 2009 that US National Debt is
$11 trillion, which is US$36,000 for
every citizen or US$71,000 for every
tax paying worker. It now requires
US$6 of debt to produce US$1 of GDP
and debt is growing and GDP is
shrinking. The reserve currency status
of the US$ is the main anchor of
support. If an alternative to the US$ is
being created like the SDR and
countries are bypassing the US$ with
their own swap agreements like China
and Argentina, how long can faith be
sustained in the Greenback.
Source: Saxo Bank
USDNOK Chart
We have shorted the US$50,000 against buying the NOK at 6.6094 with a stop loss at 6.93 and a target around
5.92.
June US Dollar Index Futures (DXM9) price chart Source: Saxo Bank
We have also shorted 1 contract of the
June 2009 US Dollar Index futures at
84.85 with a stop loss of 86.85 and a
longer term target of 81.
Commodities Gold Chart Source: Saxo Bank
Gold is still seeing considerable scrap
selling from Asian individuals (particularly
China) as individuals need cash in the face
of job losses and sharply contracting
economies. Gold may also come under
pressure from the G20 SDR creation
rhetoric which is touted as a viable
alternative to owning Gold.
Yesterday we sold and took profit on the 50
ounces of Gold at US$928.0 which was
previously bought at US$922. Today we
have sold 50 ounces short @ US$916.50
looking for a much lower target (maybe
US$835) sometime in the future.

MODEL PORTFOLIO
SEEKING ABSOLUTE RETURNS
2nd April 2009
Sound Advice
Fixed Income
Data Source: Yahoo Finance
Central Banks around the world are 10 yr US Treasury Note yield currently very low @ 2.74%
providing liquidity by bringing short term 16
rates down close to zero. The US and UK
quantitative easing programs are buying 14
longer dated government bonds to provide 12
liquidity further out on the yield curve. At
10
some time this year, longer term interest
rates (over 10 years) should start to rise. 8
6
When 10 year US Treasury rates come
down to 2.5% (from the current 2.74%), we 4
will look to sell short the 10 year UST June 2
future or buy the CFD of the UltraShort 20+
years US Treasury Bond ProShares ETF 0
1963
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2009
(code TBT), expecting rates to rise.
Equities
The S&P500 index has rallied 26% to 845 from the 6th March low of 666.79 mainly on short covering.
Commentators are saying many investors want to buy on any pullback as they believe the economy will improve
over the next couple of years and want to grab a bargain now. We are highly aware that the primary trend of
equity markets is lower. The current fiscal stimulus packages are designed to halt deflation and inspire inflation
as politicians and central bankers throw money at the economy until they perceive the “green shoots of recovery”.
On the next page is a chart of equity index performance each day past the ultimate peak of the market during a
financial crisis caused by overburdening debt. We can directly compare how Wall Street 1929, Japan 1989,
NASDAQ 2000 and the S&P500 2007 pan out over the subsequent days as Governments struggle to reflate
economies.
This would indicate that we have
NASDAQ Comp from Mar 2000 Dow Jones Ind from Sep 1929
not seen the worst yet and the
current reflation rally may run out Nikkei 225 from Dec 1989 S&P 500 from Oct 2007
of steam soon. Sell in May and 100.00%
S&P 500 - YOU ARE HERE
go away springs to mind
The primary trend is lower. However, markets
90.00%
rarely go down in a straight line and we should
As markets nearly always expect a short covering rally/consolidation soon.
80.00%
overshoot during times of turmoil, Later we are likely to resume a grinding slide with
possible technical targets of 400 for the S&P 500 and
the current S&P 500 “counter 70.00%
2,000 for the FTSE 100 on sharply lower earnings
trend” rally is likely to continue
through the 930 resistance line to 60.00%
approach 1,000 during the
50.00%
spring, despite gloomy
economics. 40.00%
Given that we consider this 30.00%
counter trend rally as a risky,
short term momentum trade, the 20.00%
scale and duration of this rally is
10.00%
an unknown risk. We will look to
establish a longer term short
0.00%
position in equity indices 10 146 275 406 540 667 798 931 1060 1192 1336 1465
sometime in the next four weeks.
Data Source: Yahoo Finance

MODEL PORTFOLIO
SEEKING ABSOLUTE RETURNS
2nd April 2009
Sound Advice
Food Retail Spread
Morrison Supermarkets 267.75p on a 15.42 PE and a 2.28% div yield, 2009 est EPS 17.40p
Sainsbury 320.75p on a 16.81 PE and a 4.00% div yield, 2009 est EPS 19.10p
The spread between Morrisons and Sainsbury is 53p.
We continue to hold the position.
Conclusion
The current “perception of coming inflation” momentum (not value) rally in equities should continue to the end of
April and reach the resistance levels set in January (S&P 500 at 870 and then 930). After that we expect equity
indices to resume the primary downtrend through to October / November 2009. We like Gold for the longer term,
but remain short during the current selling pressure. We are looking for a retreat on the 10 year US Treasury
yield down to 2.5% for a reversal and longer term advance in rates. Longer term we look for quantitative easing
to weaken the US$.
EquityBell Securities
Dowgate Hill House, 14-16 Dowgate Hill, London, EC4R 2SU Tel: +44 (0) 20 3189 2108 www.equitybell.com
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attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy.
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