The "Digging" Report Q2 2002

June 28, 2002

My Personal "Mutual Fund" OTC:RASXX

Note: OTC means Over The Counter. The ticker symbol is fictitious; please don't ask your broker to buy it. In the rare event that such a ticker does exist please inform me at once, in order to change it. I don't want to mislead anyone.

The disaster I was bracing for finally happened. Not only is the market plunging towards new lows, but my finances went down the drain and I had to liquidate one of the biggest holdings (around 42% of the Fund's assets) to satisfy creditors. To make matters worse, that holding was a fixed income contract that included a substantial penalty for early termination. Although the holding was closed at a gain, even after the penalty; this had the effect of increasing the volatility of the Fund by reducing the fixed income allocation. However, this is not the worst quarter in the life of the Fund. That "honor" belongs to the 2nd quarter of 2000, when the Fund lost 12.12% while the S&P 500 lost only 2.93%. This period, the Fund lost 11.46% (the second worst result yet), but the S&P 500 lost even more: 13.67%.

Performance as of 06/28/2002

NAV: 16.22

* Annualized compound return

The 1, 3, 5 and 10 year periods are counted backwards starting from the report date

Performance is before personal taxes. Maintenance and research costs (my personal time doing the accounting, trading and web publishing; time spent on the web and investment books) are not taken into consideration.

Freedometer ratio: 3.21%

Scale: 0-10 Worthless slave; 11-25 Rank and file; 26-40 Lowest level privileged; 41-75 Candidate for temporal release; 76-99 Almost free on parole; 100+ § A free person!

§ Unless you can't make ends meet with your present salary.

Quarter to date

Year to date

Since Inception

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