Lightened CanRoys While Loading Up On Shipping

We purchased Frontline Limited at $43.51/share on Friday. Depressed tanker shipping rates brought the price/share down roughly 20%. The rates may stay depressed as more ships are scheduled to come online. The dividend may also come down a bit more from the 14% paid in 2007. In spite of these two factors the prospects are good as long as there is global GDP growth.

We sold Canetic Resources (CNE), a Canadian Royalty Trust acquired on 11/2/2006 immediately after uncertainties regarding Canadian tax law changes effective 2011 brought the price/share down ~30%. Recently, speculation that the trust might get acquired at a premium has prepped the price up a little bit. We still hold slightly more than 12% of our total portfolio value in two other such trusts – Harvest Energy (HTE) and Advantage Energy Fund (AAV).

The list of stock/options sold during the year and the gain/losses are listed below:

Stock	Buy Date	Buy Price	Sell Date	Sell Price	% Gain (Loss)	% Portfolio Return*
Harrah’s (HET)	10/2/2006	75.61	8/7/2007	83.68	10.66	0.62
St. Joe (JOE)	8/7/2007	39.4	8/8/2007	41.8	6.23	0.47
Google (GOOG)	3/14/2007	441	8/10/2007	515.99	16.86	1.14
LOCM (LOCM)	8/10/2007	5.47	9/17/2007	6.094	11.31	0.71
PetroChina (PTR)	9/12/2006	106	10/1/2007	188.5	78.14	2.85
PetroChina (PTR)	9/12/2006	106	10/3/2007	178.05	68.39	2.22
ValueClick (VCLK)	9/12/2007	19.4	10/12/2007	28.28	45.79	3.4
Canetic Resources (CNE)	11/2/2006	13.95	10/26/2007	15.88	13.78	1.07
Suntech March 45 Call	-	-	10/15/2007	5.00	-	-
TSM April 12.5 Call	-	-	10/18/2007	0.35	-	-
Realized Gain/(Loss) YTD	-	-	-	-	-	12.48

• % Gain/Loss Relative to Portfolio Value at Beginning of Year + Deposits
• The table assumes realization of profits associated with selling options only after the option is exercised or expiry.

Here is our updated Stock Portfolio:

Stock	Buy Date	Buy Price	Current Price	Unrealized % Return	Current % Of Portfolio	Current Yield
Philip Morris (MO)	1/4/2005	46.54	72.97	49.46	8.71	4.29
Kraft Foods (KFT)	1/4/2005	21.11	33.3	62.45	2.74	3.15
Plum Creek Timber (PCL)	5/12/2005	35.5	43.38	24.27	7.77	3.74
Pfizer (PFE)	2/6/2006	25.15	24.31	1.69	5.80	4.63
ICICI Bank (IBN)	5/18/2006	27.57	64.64	94.03	11.57	0.92
Taiwan Semi (TSM)	7/27/2006	8.71	10.74345	23.35	6.41	3.4
Harvest Energy (HTE)	11/2/2006	23.46	28.25	15.07	7.16	17.48
Advantage Energy Fund (AAV)	11/2/2006	11.22	12.85	8.34	4.98	15.03
SunTech Power (STP)	3/14/2007	36.73	45	11.56	5.37	0
Central Europe & Russia Fund (CEE)	6/28/2007	51.5	62.56	12.77	5.60	9.6
Patni Computers (PTI)	8/10/2007	20.85	22.67	11.71	6.76	0.64
Bank Of Ireland (IRE)	10/1/2007	76.43	72.38	3.71	5.40	4.5
Asure Software (ASUR)	10/5/2007	1.31	1.33	-8.49	3.97	0
Frontline Limited (FRO)	10/26/2007	43.51	43.44	-0.16	5.18	13.81
Cash					12.57

• For SunTech Power (STP), we wrote a call option for March 45 (see first table) and so the price is listed as $45 as we won’t participate in the appreciation beyond that plus the premium received.

A detailed analysis of Frontline Limited will follow.