Overview:

To say that we are pleased by the performance of our market calls during this first year publishing our commentary in this format would be a mistake.  We are very proud of our performance during the past year, particularly in light of how weak the market has been throughout this period.  Our goal during severe market downturns is preservation of capital, so we can be no less than delighted with what we have been able to achieve.

Sector Focus:

In our commentary, our market calls focus on technology, specifically the NASDAQ, and these calls can be traded with QQQ, a NASDAQ 100 tracking stock.  We also explicitly cover four tech-related industries (Biotech, Computer, Internet, and Semiconductor), as well as 2 non-tech industries (Financials and Oil Services).  The indices representing these sectors, and their corresponding tradable tracking stocks are as follows.

            NASDAQ                                ^IXIC                                      QQQ

            Biotech                                     ^BTK                                      BBH

            Computer                                 ^XCI                                       None

            Financials                                 XLF                                         XLF

            Internet                                     HHH                                        HHH

            Oil Services                              XLE                                         XLE

            Semiconductor                         ^SOXX                                   SMH

Major Calls:

A major call is a signal that is explicit.  However, in the first few months of publishing this commentary, many of the calls were not explicitly stated up front, and must be interpreted.  The statement that there is a buy or sell “coming” would not be interpreted as a call, but a forewarning of a likely call to come.  On the other hand, “we expect to see this sector moving up shortly” always would be.  For a major call, a number of criteria for a buy or sell signal has to be satisfied according to our models, or the technical action of the market must fit a pattern definite enough to give a buy or sell signal without confirmation from our models.  These calls are likely to last from several weeks to several months before getting a reversal.  Major calls make up the majority of our trade volumes and profits.

Minor Calls:

A minor call is one in which not all of the criteria for a buy or sell has been met, but there has been sufficient bullish or bearish pressure built up to turn markets in the other direction, at least briefly.  These calls are usually not explicitly stated as a long-term signal, but implied, such as “market weakness anticipated” or “while some of our criteria have not been met, we expect to see the market moving higher briefly.”  The ensuing market moves from these calls are seldom prolonged, usually lasting from a few days to a few weeks, and gains from these calls are generally limited to less than 5% or 10%.

Price and Timing:

All buy and sell calls are assumed to be in force immediately.  For the purposes of performance tracking, trades are assumed to be made on the trading day following the date of the call, at a price equal to the average of the high and low on that day.  Commissions are assumed to be negligible ($10 commission on a $10,000 trade is 0.1%) and are not calculated in the returns.  We should add that while we do practice trading in both directions in the market, we have not recorded profits from trading the short side of the market here.  Including the outcomes from trading the short side would more than triple the gains in most sectors.

Results:

NASDAQ                    17-Jul-00         3-Aug-01         29.7%              27.6%

Biotech                         31-Jul-00         3-Aug-01         42.1%              40.8%

Computer                     17-Jul-00         3-Aug-01         34.3%              31.8%

Financials                     12-Sep-00        3-Aug-01         16.8%              18.6%

Internet                         11-Jul-00         3-Aug-01         35.8%              32.7%

Oil Services                  24-Jul-00         3-Aug-01         34.3%              32.6%

Semiconductor             17-Jul-00         3-Aug-01        114.7%            104.7%

In order to get a true picture of these returns in light of the difficult market of the last year-and-a-half, we also present the following comparison.  Figures represent the current value of $10,000 traded based on our calls as described above vs. the current value of $10,000 invested on the date of our initial call in a typical “buy-and-hold” strategy.

NASDAQ                    $4,910                        $12,970                   +164%

Biotech                         $6,830                        $14,210                   +108%

Computer                     $5,250                        $13,430                   +156%

Financials                      $9,730                        $11,680                     +20%

Internet                         $3,930                        $13,580                   +246%

Oil Services                $10,480                        $13,430                     +28%

Semiconductor              $5,230                        $21,470                   +311%

While space constraints did not permit us to print every trade here in this format, records of each of our trades can be accessed on our website, at

http://www.kinginvestors.com/indcalls/archives/trades.htm.

As we stated above, the market in the coming years is likely to favor the investor who takes advantage of timing, as well as selection, of his or her investments.  King Investors is here to provide information that can be useful in that regard, both for the aggressive trader, and for the more conservative investor who only wants to know when not to be in the market.  We have enjoyed providing such commentary over the last year and look forward to continuing to do so for many years to come.

          · Executive Summary              · 2000 - 2001:  Look Back               · The Market Moving Forward          

             · On Technical Analysis and Trading         · Market Calls Performance          · Acknowledgements