Added DryShips Incorporated (DRYS)

During the market correction yesterday, we went about 5% more on margin to purchase shares of DryShips Incorporated (DRYS) at $19.30 per share. As one of the largest dry bulk carriers, DryShips owns a fleet of 54 dry bulk carriers. They also own 6 UDW drilling units through their subsidiary Primelead, which is expected to be spun-off within the next six months. The company took advantage of the spot market as the BDI increased between 2006 and 2008, but shifted to fixed rate contracts as the year progressed. At this point 61% of the vessels have an average remaining term of 5 years. The BDI index has plummeted but the fixed contracts should limit the decrease in cash flow. We wrote about our missed opportunity with DryShips in 2005 when the stock was hovering in the teens, but the market correction has essentially given us another opportunity.

Below is our updated portfolio:

Stock	Buy Date	Buy Price	Current Price	Current % Of Portfolio	Unrealized % Return	Yield as % of BOY Portfolio Value Plus Deposits
Altria (MO)	Various	16.69	17.38	4.46	4.16	0.13
Philip Morris International (PM)	1/4/2005	32.19	39	6.09	21.15	0.13
Kraft Foods (KFT)	Various	24.03	27.70	4.74	15.25	0.09
Plum Creek Timber (PCL)	5/12/2005	35.5	40.62	10.43	14.41	0.23
Pfizer (PFE)	Various	24.37	15.67	6.71	(35.69)	0.24
ICICI Bank (IBN)	5/18/2006 and 08/01/2008	28.30	17.35	5.94	(38.70)	0.04
Taiwan Semi (TSM)	7/27/2006	8.71	7.61	6.51	(12.53)	0.12
Advantage Energy Fund (AAV)	11/2/2006	11.22	5.4	3	(51.89)	0.20
SunTech Power (STP)	3/14/2007	36.73	23.88	4	(36.34)	None
Central Europe & Russia Fund (CEE)	Various	51.03	22.02	4.71	(55.04)	0.55
Patni Computers (PTI)	8/10/2007	20.85	6.20	2.65	(70.29)	0.17
Itron Inc. (ITRI)	11/07/2007	85.01	71.13	6.09	(16.43)	None
Anthracite (AHR)	11/09/2007	7.97	2.35	2.01	(70.51)	0.17
ClickSoftware (CKSW)	11/09/2007	4.61	2.35	2.01	(49.02)	None
Harvest Energy (HTE)	11/28/2007	21.01	8.56	2.93	(59.27)	0.26
iRobot (IRBT)	12/18/2007	18.65	10.32	3.53	(44.19)	None
MCG Capital (MCGC)	Various	10.86	0.70	0.48	(93.56)	0.05
LDK Solar (LDK)	01/22/2008	30.49	20.53	5.27	(32.67)	None
Aegon N.V. (AEG)	04/28/2008	15.99	5.30	2.72	(66.85)	0.09
LM Ericsson (ERIC) (AEG)	05/05/2008	11.83	6.17	4.22	(47.83)	0.08
TD Ameritrade (AMTD)	05/21/2008	17.68	12.35	4.23	(30.17)	None
Trina Solar (TSL)	06/06/2008 and 07/31/2008	45.61	11.56	2.47	(72.55)	None
Costco (COST)	08/01/2008	62.28	54.40	4.66	(12.65)	0.03
Frontline Limited (FRO)	10/06/2008	36.95	32.78	4.21	(11.27)	0.71
DryShips Incorporated (DRYS)	10/09/2008	19.30	19.09	4.90	(1.10)	0.11
Cash				(9.57)
Total Portfolio					(39.83)	3.23

• For SunTech Power (STP), we wrote covered calls for 2008 Dec 50 on 06/06/2008 at $5.20.
• For Taiwan Semi (TSM), we wrote covered calls for 2008 October 12.5 on 4/21/2008 at $0.45.
• For Altria and Philip Morris International, assumed spin-off ratio of 30.83:69.17. Altria is yet to supply the cost-basis info
• For Plum Creek Timber (PCL), we wrote covered calls for 2008 November 50 on 06/03/2008 at $1.70.