The second quarter of 2011 was a tough quarter, possibly as surprisingly poor as the first quarter was surprisingly rewarding for our income based selection criteria.  The stock performance for the Investment with Income portfolio that was published on Seeking Alpha has been very good for up to and until the second quarter.  For the second quarter the portfolio was down -11.74% from the first, compared to the S&P 500, which was also down, only -1.79%.

Our Income and Investment Review portfolio is based on high dividend paying, very low or negative enterprise values while still including our established criteria of strong increases in cash flow, earnings, and a select qualitative review ensuring they have a good business model.

The Second Quarter added to the First Quarter and Fourth Quarter of 2010, based on simple math, is:

*Dividends not included in the above tables but currently average 4.93 % annually based on the initial investment.

First Quarter 2011 performance on our listed stocks:

*Dividends not included in the above tables but currently average 4.93 % annually based on the initial investment.

Investors should keep in mind:

1. The current average dividend of 4.93 % is based on our recommended price.
2. This is a very small sampling over a very short time.
3. Over time the performance is tracking very closely to the longer, larger and strong performance sampling of our High Cash Stock review with a similar criteria, excluding the dividend.

The very low or negative enterprise values in the reviews offer a buffer of protection against a broad market selloff.  The positive earnings, improved cash flow, profit increase and possible stock price expansion often help to increase the very low valuations that were identified.  So far, the Income and Investment portfolio has done exceedingly well 2 out of the last three quarters, especially when the dividend returns are included, and is still above our forecast in spite of the volatility and disappointment in this last quarter.   One must realize that this is a short indicator of performance and there is no guarantee of future success.

Updated portfolio review:

QBE Insurance was added during the quarter with our review here.  With a strong value in cash and yielding about 7.2 % percent in dividends, providing both strong current and projected growth, they fit the stringent criteria for the Income & Investment Portfolio.  QBE is Australian based, and we purchased it on the Australian exchange (QBE:AX).  It is added as the first among a number of international companies which we expect to identify around the globe.

No positions were sold during the quarter.

Disclosure: Both Durig Capital and its clients have positions in all the above positions. Performance is bases on written reports published as Investment with Income Portfolio.

These both are hypothetical portfolio illustration and no money was invested by clients or Durig Capital in this enclosed published manner.  Hypothetical only takes into consideration all High Stock Reviews or Investment and Income stock positions that were written about and publicly published, and then held for the entire quarter.  Any new positions or liquidated positions that occurred in the published quarter were not included in the performance.  This assumes all positions have an equal investment value at the beginning of each quarter.  This is purely a hypothetical account and actual performances of individual active accounts have preformed both above and below the hypothetical returns in the past and most probably will in the future.  Past returns are no way indicative of any guarantee of any possible future return. Individual suitability and advice should be sought about any particularly matter or circumstance.