Stock Portfolio and Watch List Updates for April 2010

Following are the activity from the previous month:

1. Wrote Jan 2011 35 Cash Covered Puts on Glaxo at $2.20 on 3/26/2010. The cash coverage requirement is about 2.8% of our total portfolio value.
2. Wrote Jan 2011 40 Cash Covered Puts on Nucor at $3.65 on 3/26/2010. The cash coverage requirement is about 2.4% of our total portfolio value.
3. Initiated a small position (~0.4%) in Vonage Holdings (VG) at $1.51 on 4/6/2010.

The idea with writing cash covered puts is to allow building our stock portfolio over a period of time at a lower cost basis than the current market price. The two puts we wrote this month are both from our watch list. It is also possible that we will have to to be content with an outsized cash position for an extended period of time, if one of these puts get exercised. The premium will be ours to keep in that scenario – so the cash is still working! The cash coverage requirements on these puts only account for about 5.2% of the total portfolio value. The cash position in our portfolio stands at over 60% and so we will continue to use cash-covered puts spread-out over a period of time to build the portfolio.

Below is our updated portfolio – it is slightly above break even:

Stock	Buy Date	Buy Price	Current Price	Current % Of Portfolio	Unrealized % Return	Yield as % of Portfolio Value
Altria (MO)	Various	16.69	20.84	1.24	24.90	0.38
Philip Morris International (PM)	1/4/2005	32.19	51.04	5.37	58.53	0.45
Kraft Foods (KFT)	Various	26.33	30.35	2.41	15.28	0.23
Pfizer (PFE)	Various	24.37	16.72	1.66	(31.38)	0.30
ICICI Bank (IBN)	5/18/2006 and 08/01/2008	25.28	40.55	4.02	60.43	0.30
Advantage Energy Fund (AAV)	11/2/2006	11.22	6.76	0.67	75.58	0.17
Central Europe & Russia Fund (CEE)	Various	39.23	36.76	2.55	(6.28)	0.03
Itron Inc. (ITRI)	11/07/2007	85.01	73.85	1.46	(13.23)	None
Anthracite (ACPIQ – formerly AHR)	11/09/2007	7.97	0.024	0.00	(99.70)	0.00
iRobot (IRBT)	12/18/2007	18.65	15	1.19	(18.88)	None
LDK Solar (LDK)	01/22/2008	30.49	7.54	0.45	(75.27)	None
Aegon N.V. (AEG)	04/28/2008	15.99	7.12	0.42	(55.46)	0.00
Frontline Limited (FRO)	10/06/2008	36.95	35.12	1.04	(4.94)	0.17
DryShips Incorporated (DRYS)	02/09/2009	6.96	6.08	0.84	(12.70)	0.00
Plum Creek Timber (PCL)	07/23/2009	30.50	39.78	3.15	30.41	0.46
CPFL Energia S.A. (CPL)	07/28/2009	50.45	61.15	2.42	21.21	0.55
BP plc (BP)	08/05/2009	51.49	59.03	2.34	14.65	0.45
AT&T (T)	08/27/2009	26.38	26.25	2.08	(0.51)	0.39
Sysco Corporation (SYY)	10/13/2009	25.23	29.81	2.36	18.12	0.39
Exelon (EXC)	12/30/2009	49.38	43.45	6.86	(12.01)	0.39
Telefonica SA (TEF)	02/09/2010	68.74	68.74	7.24	(0.07)	0.57
Vonage Holdings (VG)	04/06/2010	1.51	1.59	1.67	5	0
Cash				61.74
Total Portfolio					0.32	2.24

Below is a summary of transactions during the year:

Stock	Buy Date	Buy Price	Sell Date	Sell Price	% Gain (Loss)	% Portfolio Return*
Ameritrade (AMTD)	5/21/2008	17.69	01/19/2010	17.45	(1.33)	(0.02)
AMTD Jan 17.5 Covered Calls (TQAAW)	1/19/2010	NA	9/10/2009	NA	NA	0.22
COST Jan 60 Covered Calls (PRQAL)	1/19/2010	NA	9/10/2009	NA	NA	0.06
IBN Mar 40 Covered Calls (ITZCN)	1/22/2010	NA	10/06/2009	NA	NA	0.20
Costco (COST)	8/01/2009	62.27	02/09/2010	58.18	(6.57)	(0.08)
Realized Gain/(Loss) YTD	-	-	-	-	-	0.04

• % 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.

We have covered calls written against 40% of our ICICI Bank (IBN) shares (Sep 2010 40) and 100% of our Advantage Energy Fund (AAV) shares (Aug 2010 7.5). We also have cash covered puts on Glaxo (GSK) shares (Jan 2011 35) and Nucor Steel (NUE) shares (Jan 2011 40) with a cash requirement of 5.2% of our total stock portfolio value.

Our watch list was updated to replace Glaxo (GSK) and Nucor Steel (NUE) with Disney (DIS) and McDonalds (MCD) respectively after we wrote the cash covered puts on them. Our current watch list follow – Archer Daniels Midland (ADM), Automatic Data Processing (ADP), Becton Dickinson (BCK), BHP Billiton (BHP), Cardinal Health (CAH), Cresud (CRESY), Disney (DIS), Eaton (ETN), Emerson Electric (EMR), AgFeed (FEED), Home Depot (HD), Intel (INTC), McDonalds (MCD), Nokia (NOK), China Nepstar (NPD), Nutrisystem (NTRI), NYSE Euronext (NYX), Qiagen (QGEN), UPS (UPS), and Waste Management (WM).