Performance Update Through August

The large 60+% position in 30-year treasuries based on the Sagflation theme paid off in August, driving the YTD performance through the end of August of my IRA up over 6%. For the previous year ending in August my IRA has increased almost 20%, benefiting from bond performance this year and equity positions at the end of 2010. The three year performance shows an average increase of 7%, slightly below the longer-term average because my investments were largely in cash for most of 2008 and 2009 as I was not actively managing them. The average five year performance was 9%, improving relative to the three performance due to my movement in Oct. 2007 to cash to avoid the market crash and stock picks prior in 2006 and 2007. Since the inception of my IRA in January 2003 my average annual performance has been 9.5% due largely to stock picks. These performance figures are calculated by my brokerage firm.

The annual performance of my IRA has exceeded both the SP500 and Bond indices over every period. It also exceeds the performance of most indices for hedge funds over these period.

                    YTD             1-Year             3-Year             5-Year           Inception*
IRA             6.1%             19.7%               7.2%               9.4%                9.5%

S P 500      (1.8)%             18.5%               0.5%               0.8%
Bonds**      5.9%               4.6%               7.2%               6.6%


* IRA was established in January 2003.
** Bonds is defined as the Barclays Capital US Aggregate Bond Index.