Letterto Investors
For January 2011

www.islainvest.com [email protected] (305) 522-1333             

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Dear Investors,

Here's something most people don't know about the lovelylittle fishing village of Islamorada:

You cannot buy socks here.

Nobody sells them.

I find this odd. Sure, it's an island, but we're notthat isolated. We get mail. They showedAvatar here. And, shoot, the drugstore carries eightdifferent kinds of Zhu Zhu pets.

But due to some sort of apparent anomaly in the laws ofsupply chain management across tropical latitudes, inIslamorada you can find hundreds of brand new miniature roboticAsian toy hamsters, but no socks.

Where is 60 Minutes on this?

In any case, it sounds like it has been a tough winter upnorth so far - even for people who aren't Bears fans, I mean. Tothose of you blanketed by snow yet again this week, you shouldknow that we in the Keys can empathize:

It's 62 degrees here. But due to that chronic sock shortage,it really feels like 61. Brrrr.

Ah, I kid. My apologies, yankee friends. I can't help it. Ijust take a certain guilty pleasure this time of year in watchingvideos like this one and smiling a little bit.

More importantly, though - you are in luck. Because all ofthe above was really just a long-winded way to say:

The annual meeting is almost here. Quit cursing the snowplow guy and come on down. And don't forget to pack yoursocks.

Details:

The second annual Islamorada Investment Managementinvestor meeting will be held in the Bougainvillea Ballroom at Cheeca Lodge on Saturday,February 19th, from 3:00 to 5:00 pm.

I'll review the past year, give an overview of valueinvesting, and then look a little closer at some of thecompanies we all own. At this point, I'm thinking we'll discussGE, compare Google (which we own) to Apple (which we don't) andthen walk through the investment case for Capital Bank, whichmay be of particular interest to TIB Financial investors.

In other words, we're gonna geek out.

If you have not already, please RSVP now at 305-522-1333 or  [email protected].

We had 42 people at last year's meeting, and I certainlylearned my lesson about the open bar thing. I also suspect thecrowd will be a little bigger this year. So, the meeting will bea bit simpler. And by simpler I mean “potluck.” Ifeveryone could just bring a dish of their own…

Kidding again. The meeting this year may be relativelyfood-free, but the new Cheeca is gorgeous and the food onsiteis great, so I'd encourage those of you who might be soinclined to grab a bite right there before or after themeeting. I am also still working on one little flourish I hopeto pull off at the conclusion of our meeting, but you'll haveto stay tuned for now on that.

In any case, all are welcome. You don't need to be a currentinvestor to attend, but please RSVP immediately if you'd liketo come. And bring a friend if you'd like. Just know that thefirst row is reserved for my mother and any billionaires whowould like to attend.

Also, the night before the annual meeting - on Friday,February 18th - we'll be having an informal get-togetheroutside at the tiki bar at the fabulous Marker 88 restaurant. So,if you're coming in from out of town, or if you're a localinvestor and just want some amazing apps, please come on by.Stay tuned to theblog for more details there.

A few more quick notes:

1 - Tarpon has been performing quite well since my lastletter to you. Since November 20th through last Friday January28th, the portfolio is up 15.6% compared to a rise in theS&P 500 of 6.4%. So, year three is off to a good start.

2 - The Gecko Folio just officially ended its second year,during which it increased by 24.8% - and still yields over 7%.Since inception, Gecko has increased 114% compared to a rise of62% in the benchmark index. I really should talk more aboutGecko - and intend to at the annual meeting.

3 - Given the meeting, my next letter to you all willcome out at the end of March.

And lastly, two links you might find entertaining. Hereis a brief intro video about IIM that was shot in December,and here is thesecond link, to a speech I gave down in Key West last week.You, too, may be surprised how long the average stock is heldon Wall Street these days.

That's all for now. I hope to see many of you soon righthere in Islamorada. Stay tuned to the blog in the coming weeksfor more about the meeting and suggestions of things to dowhile you're in town, too. As usual, please contact me if youhave any questions.

And did I make a plug to RSVP yet?

Stay warm up north!

- Cale

TheTarpon Folio is an innovative, investor-friendly alternative tothe traditional actively managed mutual fund. It's built on amodel we call a Spoke Fund®. 

It is more transparent, takes more concentrated positionsand is significantly less expensive than the vast majority ofmutual funds. The portfolio is managed for long-term growthusing value investing principles. 

Fees are 1.25% of assets annually, assessed on a quarterlybasis. Turnover, taxes and trading are minimized in the fund,and investors can customize their accounts in several key ways,including tax preference. Each Tarpon Folio account is alsoprotected by three types of insurance for a maximum of up to$9.0 million

For more information, visit ourwebsite.  

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