Stock Portfolio and Watch List Updates for September 2010

Following are the activity from the previous month:

1. The cash covered puts we wrote on Emerson Electric (EMR September 2010 43) at $2.30 (6/10/2010) expired worthless.
2. Bought back the cash covered puts we wrote on Nutrisystem (NTRI September 2010 17.5) at $1.70 (4/19/2010) for $0.10 just before expiry so as to avoid the small possibility that the share would get exercised – it closed at $17.54 that day.
3. The covered calls we wrote on ICICI Bank (IBN September 2010 40) at $5.15 (3/10/2010) were called away as the shares closed well above that price. We are still long on the remaining 60% of our holdings.
4. Wrote covered calls on ICICI Bank Shares (IBN Jan 2012 55 at $5.10) with one-third of our remaining shares.
5. Wrote cash covered puts on VF Corp (VFC), Cisco Systems (CSCO), and Berkshire Hathaway (BRK.B) with roughly 2.5% of our total portfolio value each. The details are: VFC Nov 2010 70 at $3.10, CSCO Jan 2012 20 at $2.64, and BRK.B Jan 2012 75 at $7.15.
6. Added to our positions in Altria (MO), Pfizer (PFE), Sysco (SYY), and Intel (INTC) with about 3% of our total portfolio value on 9/3/2010. The details are: Added two-thirds more MO at $22.89, Added 40% more PFE at $16.48, Added one-fourth more SYY at $28.58, and Added 60% more INTC at $18.43.
7. Added about 1% of our total portfolio value in cash.

 The cash coverage requirements on the puts account for about 44% of our cash position. The cash position in our portfolio is still pretty high at around 46%. We will continue to use cash-covered puts along with direct puchases spread-out over a period of time to build the portfolio.

Below is our updated portfolio – it is aound breakeven:

Stock	Buy Date	Buy Price	Current Price	Current % Of Portfolio	Unrealized % Return	Yield as % of Portfolio Value
Altria (MO)	Various	19.19	24	2.14	25.06	0.10
Philip Morris International (PM)	1/4/2005	32.19	56.10	2.00	74.26	0.11
Kraft Foods (KFT)	Various	26.33	31.95	2.27	21.36	0.11
Pfizer (PFE)	Various	22.13	17.40	2.17	(21.37)	0.07
ICICI Bank (IBN)	5/18/2006 and 08/01/2008	25.28	49.24	2.63	107.19	0.17
Advantage Energy Fund (AAV)	11/2/2006	3.85	6.14	0.55	59.48	0.10
Central Europe & Russia Fund (CEE)	Various	39.23	36.40	2.27	(7.20)	0.01
Itron Inc. (ITRI)	11/07/2007	85.01	59.16	1.05	(30.49)	None
Anthracite (ACPIQ – formerly AHR)	11/09/2007	7.97	0.01	0.00	(99.91)	0.00
iRobot (IRBT)	12/18/2007	18.65	19.38	1.38	4.81	None
LDK Solar (LDK)	01/22/2008	30.49	8.85	0.47	(70.98)	None
Aegon N.V. (AEG)	04/28/2008	15.99	6.15	0.33	(61.53)	0.00
Frontline Limited (FRO)	10/06/2008	36.95	28.89	1.54	(12.10)	0.06
DryShips Incorporated (DRYS)	02/09/2009	6.96	4.13	0.51	(40.77)	0.00
Plum Creek Timber (PCL)	07/23/2009	30.50	35.09	2.50	15.05	0.17
CPFL Energia S.A. (CPL)	07/28/2009	50.45	69.52	2.47	37.80	0.21
BP plc (BP)	08/05/2009	51.49	38.46	1.37	(25.30)	0.10
AT&T (T)	08/27/2009	26.38	28.58	2.03	8.32	0.13
Sysco Corporation (SYY)	Various	25.92	29.98	2.67	15.65	0.10
Exelon (EXC)	12/30/2009	49.38	42.98	2.29	(12.97)	0.21
Telefonica SA (TEF)	02/09/2010	68.74	74.50	2.65	8.30	0.29
Vonage Holdings (VG)	04/06/2010	1.51	2.50	0.89	65.09	0
Archer Daniels Midland (ADM)	04/23/2010	28.27	32.27	2.30	14.13	0.09
Intel Corporation (INTC)	Various	21.91	19.42	2.77	(11.36)	0.11
Google Inc. (GOOG)	05/03/2010	528.36	527.29	1.88	(0.20)	0
Cardinal Health (CAH)	05/06/2010	34.42	33.45	1.79	(2.82)	0.08
Pearson PLC (PSO)	05/06/2010	14.32	15.71	1.96	9.68	0.19
Nokia (NOK)	05/14/2010	10.35	10.06	1.79	(2.80)	0.17
Harris (HRS)	06/07/2010	45.65	45.37	2.42	2.20	0.09
Beckton Dickson (BDX)	06/23/2010	70.20	74.28	2.64	5.81	0.11
Cash				46.27
Total Portfolio					0.59	2.67

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)
AAV Aug 7.5 Covered Calls	8/21/2010	NA	3/9/2010	NA	NA	0.06
NTRI Sep 17.5 Puts	9/17/2010	NA	4/19/2010	NA	NA	0.19
IBN Sep 40 Calls	9/18/2010	NA	3/5/2010	NA	NA	0.18
EMR Sep 43 Puts	9/18/2010	NA	6/10/2010	NA	NA	0.12
ICICI Bank (IBN) – Called Away	5/18/2006	27.54	9/18/2010	39.76	44.88	0.43
Realized Gain/(Loss) YTD	-	-	-	-	-	1.32

• % 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 one-third of our ICICI Bank (IBN) shares (Jan 2012 55). We also have cash covered puts on Glaxo (GSK) shares (Jan 2011 35), Nucor Steel (NUE) shares (Jan 2011 40), Automatic Data Processing (ADP) shares (Jan 2011 40), Ameritrade (AMTD) shares (Feb 2011 15), Qaigen (QGEN) shares (Nov 2010 17.5), Costco (COST) shares (Jan 2011 55), VF Corp (VFC) shares (Nov 2010 70 at $3.10), Cisco (CSCO) shares (Jan 2012 20 at $2.64), and Berkshire Hataway (BRK.B) shares (Jan 2012 75 at $7.15) with a cash coverage requirement of about 44% of our cash position.

We added Quality Systems (QSII) to our watch list. Our current watch list follow – Applied Materials (AMAT), Air Products & Chemicals (APD), Brown-Foreman (BF-B), BHP Billiton (BHP), Caterpillar (CAT), Cresud (CRESY), Disney (DIS), Darden’s Restaurants (DRI), AgFeed (FEED), Goldman Sachs (GS), Home Depot (HD), McDonalds (MCD), China Nepstar (NPD), NYSE Euronext (NYX), Owens & Minor (OMI), Pitney Bowes (PBI), Quality Systems (QSII), UPS (UPS), VF Corporation (VFC), and Waste Management (WM).