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Former Short Position - LEH

Initial Cover-Stop was established off the hilltop resistance points which were above the 30wk moving average (Risk Corridor = 7.2%). The next valley-bottom occurred at 10/4/02 as confirmed upon the third subsequent increase in closing price on 10/25/02. The next hilltop occurred on 11/22/02 as confirmed upon third subsequent decrease in closing price on 12/13/02. Since the 11/22 hilltop was above the 30wk moving average, we adjusted the Cover-Stop to $63 off the hilltop resistance points and then patiently awaited the next hilltop so we could make our next Cover-Stop adjustment.

A perfect case for how Cover-Stops are crucial in assisting us in limiting risk. Following three successive Cover-Stop violations, our loss on this issue was only 2.4%.