ESSAYS

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I would like to make some brief comments on the earthquake tragedy in Japan- the volatility in the markets, and especially the uncertainty surrounding the damaged Fukushima reactor.

The Fukushima reactor fires, while extremely serious- mirrors the markets reaction to the BP oil spill. During the spill crisis, the markets recovered when the well was capped and it was clear the environmental damage would not be so severe. In fact, the low of the market last summer coincided with the nadir of BP stock and the extreme stresses during the spill.

Ironically, BP made a big case for nuclear power and now just a few months later oil seems so much safer! Or coal. MWS Capital has holdings in all three crucial power resources—oil, coal, and uranium. Despite Fukushima, all will remain viable long term energy sources.

The markets will be skittish until the nuclear plant comes under control, but despite conflicting news; there has not been any major release of radiation or major reactor meltdown. Nor can the Fukushima damage be compared to Chernobyl, where sadly, there was an unprecedented and nearly instantaneous explosion of an entire reactor core.

I am an optimist, so I am confident the Japanese will get their reactor under control and the fuel rods cooled down. My silver lining is that after years of export based Japanese economic decline, perhaps the earthquake disaster and their undoubtedly successful rebuilding efforts will allow the Japanese to focus on themselves for a change. This may mark a positive turning point where they can pursue a more balanced consumer based economy such as ours.

In the meantime, the market correction has created new opportunities, as our stocks reinvest and pay dividends. Yes the last few years has conditioned some investors to over spin the effect on the market of a Fukushima even as our economy rebounds and stock profits and revenues hit record highs. And thankfully, once again, our US centric investment strategy has paid off by helping us avoid events beyond our control in countries that are so far from us.

Matthew Shapiro, President, MWS Capital                                                             March 17, 2011

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