Covered Calls Expiry: Taiwan Semi (TSMKU) and Plum Creek Timber (PCLKG)

Our November 7.5 covered calls on Taiwan Semi (TSMKU) and the November 35 covered calls on Plum Creek Timber (PCLKG) expired worthless. The options netted a gain of about 10% each on our investments in Taiwan Semi and Plum Creek Timber shares. We are showing a realized gain of just fewer than 5% for the year on our transactions. We are about 18% on margin and will try to continue to liquidate some of our defensive holdings to avoid margin exposure completely by the end of the year. This should also allow us to realize capital losses for next year tax purposes. TD Ameritrade currently charges 9% on our margin amount, which makes being on margin especially unattractive.

Early next year, we plan to liquidate some long-term ESPP holdings were we adopted the long-term capital gains realization strategy discussed previously. That should allow us to infuse between 5-10% more cash to this portfolio.

The list of stocks/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*
LDK Solar (LDK)	11/21/2007	30.30	01/08/2008	40.83	34.75	2.64
Fannie Mae (FNM)	02/15/2008	30.70	03/10/2008	19.82	(35.44)	(2.18)
Navteq Inc.(NVT)	03/11/2008	73.32	03/12/2008	72.15	(1.62)	(0.06)
Suntech March 45 Call (STPCI)	10/15/2007	NA	03/22/2008	NA	NA	0.50
LDK Solar March 40 Call (LDKCH)	02/13/2008	NA	03/22/2008	NA	NA	0.44
Taiwan Semi April 12.5 Call (TSMDV)	10/18/2007	NA	04/20/2008	NA	NA	0.1664
Cypress Semi April 27 Call (CYDB)	04/04/2008	NA	04/20/2008	NA	NA	0.2137
Cypress Semi (CY)	04/02/2008	24.89	04/20/2008	26.95	8.26	0.4113
EMC Corporation May 16 (EMCEQ) Call	04/23/2008	NA	05/17/2008	NA	NA	0.1639
EMC Corporation (EMC)	04/08/2008	15.00	05/17/2008	15.97	6.48	0.2915
Suntech June 45 Call (STPFI)	04/01/2008	NA	06/05/2008	NA	NA	0.3538
Taiwan Semi Oct 12.5 Call (TSMJV)	04/21/2008	NA	10/18/2008	NA	NA	0.2061
Plum Creek Timber Nov 50 Call (PCLKJ)	06/03/2008	NA	10/21/2008	NA	NA	0.2028
Suntech Power Dec 50 Call (STPLJ)	06/06/2008	NA	10/21/2008	NA	NA	0.4656
Taiwan Semi Nov 7.5 Call (TSMKU)	10/31/2008	NA	11/22/2008	NA	NA	0.4682
Plum Creek Timber Nov 35 Call (PCLKG)	10/28/2008	NA	11/22/2008	NA	NA	0.3931
Realized Gain/(Loss) YTD	-	-	-	-	-	4.5311

• % 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.
• Dividend returns are not included in the spreadsheet – they are expected to be about 4%.