Hi Jurek,

Good to hear from you.

I'm glad you posted your observations with regard to Resolute Funds. That is because it gives me a chance to make my personal comments.

First of all, I am more than familiar with Tom Stanley and his past investment records. For example, during the time that he ran the Resolute Growth Fund, people could have gone to his first 4 years of performance and said exactly what you have said. But you have to go to his last 6 years.

In a ten year period, $10,000 invested would have become over $250,000. I watched the performance of his fund week by week over much of that 10 years. I also followed Francis Chou's fund which over the past few years has not done as well as it had, but I have talked to Francis personally and at that time, he was focused primarily on his fund whereas now he is Vice-President of an extremely successful financial corporation.

Now lets go back to your observations. And lets break down the performance of the Resolute Performance Fund on a quarterly basis and I will attempt to re-type what is on the Morning Star description of its quarterly performances.

Tom Stanley, from 2005 on, has beat the Canadian Small Medium Cap Equity Index by a large amount, when you look at the graph on the opening page of Morningstar. However, during that time, many funds have been extremely conservative, as usual, and as a result, he is in the bottom quartile percentile of the funds out there. So you are correct on that.

Now lets look at the quarterly performance of his Resolute Performance Fund in terms of % increase or decrease as shown on the Morningstar website for each quarter:

Year Q1 Q2 Q3 Q4

2005 75.8 -6.5

2006 29.6 -11.9 -13.9 45.4

2007 6.7 7.3 -4.9 -12.8

2008 12.6 34.6 -44.7 -49.7

Now, as you can see, the overall performance of his fund has no doubt been affected by his considerable holdings in Connacher and perhaps other similar type resource stocks, and in particular, the last half of 2008 has been dramatic. Also, it was fairly difficult to navigate the resource waters, so to speak, in the latter part of 2007.

Obviously, Tom is not a person to load up on stocks such as Encana, Canadian Natural Resources, Suncor, etc. In fact, he would have none of those. Right from day one, he is swinging for the home run. And as you have probably read, he does his own research and he goes right to the source to determine that his research is valid.

Again, if we look at the first few years of his record breaking fund, the Resolute Growth Fund, the numbers were not that exciting, but eventually they became so, as he brought his fund up to #1. Though I have not talked to Tom Stanley personally, as I have Francis Chou, his reputation in the business is pristine. He certainly does not like to share his ideas with other fund managers, and in part that's what caused him to close his record breaking fund when disclosure was demanded by certain sources.

Another fund that I followed very closely is the Norrep Fund and at times they have done very well.

Now, if we are in the business of comparing funds for past performance, we would certainly choose those fund managers that don't know a lot about individual stocks, but fill their funds with good average solid performers. And you might get a good average fund return.

As an aside, lets look at another person who swings for the home run. His name is Seymour Schulich and so far, he has purchased 24 million shares of Birchcliff Energy Ltd. Seymour, as you probably are aware, is quite well off and he is about my vintage and went to school at McGill University. The difference is that he is giving away money in large quantities (because he has it to give away) and in many universities around Canada you can read the name "Schulich School of Business", for example, or other types of educational/musical endowments.

Anybody looking at Birchcliff's graph would say that Seymour has made a mistake by buying Birchcliff. Well, we shall see. He also is a home run seeking person and that's why he is investing in Birchcliff in a major way. His investments in Birchcliff would be worth well in excess of $100 million.

So there we have it. You see it from a click-the-globe fund Resolute Performance Fund point of view, where I look at it from a different point of view in that I have followed Tom Stanley's Mutual Fund management at times day to day over most of the 10 years that his Resolute Growth Fund did so well.

The Resolute Funds website has all the information that you have brought forward and of course, it does carefully highlight the history of Tom's mutual fund management. Personally, I don't know of anyone that has managed a small cap mutual fund more successfully than Tom Stanley. Also, my feedback is that his integrity is beyond reproach and always has been.

So there you have it. My point of view is understandably different from yours but I thought you needed to know that Tom Stanley is very well known to me, as are a number of others that I'm not going to start to mention at this time.

Again, thank you for your reply to my 3 posts which of course were just cut and paste from The Resolute Fund's website.

Perhaps an important point that I didn't mention is that after Tom has done his research, he generally buys a considerable quantity of a stock and holds it for a long period of time. I think that speaks well for Connacher in that he is continuing to buy and of course, that was the reason for my initial post. As you probably already know, Tom only invests in his own mutual fund.

Best Wishes,

Lynn