RECOVERY PLAN

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ACCOUNT PERFORMANCE

1.  THE CHART BELOW GIVES YOU SOME IDEA OF THE DAILY FLUCTUATION IN ACCOUNT VALUE FOR 100 TRADING DAYS AS OF 15 MAR 2010.  YOU CAN SEE HOW THE LAST PART OF JANUARY HAD SUSTAINED DOWNSIDE DAYS BY REVIEWING THE SECOND CHART.  AS I SAID BEFORE, THERE IS ONE SURE WAY YOU CAN ELIMINATE THE FLUCTUATIONS AND THAT IS TO PUT EVERYTHING IN MONEY MARKET WITH A RETURN OF LESS THAN ONE PERCENT.  TO HELP MINIMIZE THE FLUCTUATIONS, WE HAVE COVERED CALLS ON SEVERAL POSITIONS.  WHEN STOCKS MOVE, WE CAN ROLL THE CALLS OUT, OR JUST SELL THE STOCK.  OUR RETURN WILL BE SOMEWHAT LESS DUE TO THE COST OF THE STRATEGY.  YOU CAN ALSO SEE WE HAVE A REASONABLE CASH POSITION.  THE SECOND CHART IS WHAT I THINK IS A REASONABLE WAY OF SEEING HOW WE ARE DOING.  YOU CAN SEE WE ARE CLOSE TO 22 TIMES THE DOW.  I WOULD LIKE TO SEE US WELL ABOVE THE LINE THIS MONTH.  THE POINT IS WE NEED TO DO THE BEST WE CAN TO GET A RETURN AROUND THAT OF WHAT THE OVERALL MARKET IS PROVIDING.  NOW SCROLL DOWN TO THE NEXT CHART.

2. THE CHART BELOW SHOWS THE DAILY ACCOUNT VALUE VERSUS MULTIPLYING THE DOW INDEX BY A FACTOR OF 22.  THIS IS FOR THE MOMENT OUR SCOREBOARD.  WE NEED SOMETHING TO MEASURE OURSELVES AGAINST BECAUSE A GOOD DEAL OF OUR INDIVIDAL INVESTMENTS ARE WITHIN THE DOW SECTORS.  AS YOU CAN SEE, WE WERE DOING SOMEWHAT BETTER THAN A 22 MULTIPLE UNTIL THE CORRECTION.  WE ARE NOW SOMEWHAT BELOW BECAUSE OF OUR CASH POSITION AND CALLS.  KEEP IN MIND THAT THE MORE HEAVILY WE ARE IN A CASH POSITION, THE LESS LIKELY WE WILL ACHIEVE THE 22 MULTIPLE.  BUT SO TOO, WE ARE READY TO TAKE ADVANTAGE OF DIFFERENT POSSIBILITIES AND MINIMIZE LARGE LOSSES WITH THE 200 POINT OR MORE CORRECTIONS WE HAVE BEEN SEEING.

3.  THIS NEXT CHART SHOWS THE BIG PICTURE---WHERE WE HAVE BEEN AND WHERE WE WANT TO REASONABLY GO.  AS YOU CAN SEE, WE NEED TO IRON OUT THE PAST FIGURES WITH A COUPLE OF LETTERS FOR ACCOUNT INFORMATION.  THE UNKNOWN ACCOUNT VALUE NUMBERS WERE STRAIGHT LINED AT $250,000.  IF YOU PLAY AROUND WITH THE NUMBERS, YOU WILL SEE THAT IF YOU MULTIPLIED THE DOW JONES INDEX OF 30 STOCKS BY A FACTOR OF 22,  IT WOULD BE MORE LESS THE VALUE OF THE ACCOUNT.  IF THE ACCOUNT VALUE WAS MUCH MORE, WE HAVE BEEN FORTUNATE IN BEING OUT OF THE MARKET AT THE RIGHT TIME, OR MADE A FEW GOOD DECISIONS.  IF THE ACCOUNT VALUE IS MUCH LESS, IT COULD BE WE ARE TOO SPECULATIVE OR TOO HEAVILY WEIGHTED IN UNDERPERFORMING SECTORS.  ANOTHER POSSIBLITY IS WE ARE TOO HEAVILY IN CASH WHILE THE MARKET IS ADVANCING.  FOR ILLUSTRATION PURPOSES, THE CHART HAS A 10% COMPOUNDED RETURN PROJECTED FOR THE YEARS 2010 AND 2011.

16MAR10