As the stock market struggles to maintain current levels, companies are increasingly challenged to deliver earnings that justify these lofty stock prices. Due to the market's historic over-valuation, prudent investors are looking for alternative methods to generate growth and protection of capital, but to date have felt limited in their investment choices. Perhaps they are not aware of the various options at their disposal, such as a portfolio of stocks short.

If an investor can achieve either an increase in return or a reduction in risk through the use of a particular investment approach, then this approach should be considered. LAM has developed their Short-Biased Managed Accounts product that is designed to achieve this goal. This low correlation asset class is an important diversification tool that incorporates a sophisticated, professional and controlled approach to selling short a portfolio of stocks. We do not utilize futures or options.

Yes, hedge fund investors are limited to their total investment. But a short portfolio may not decline below 30% of its equity. If it does, the broker (custodian) automatically liquidates the account in order to preserve their margin.

Therefore, there is no question that the short portfolio has 30% less risk. If this fact, along with the positive attributes of complete 24/7 transparency and immediate termination provisions are considered, it becomes obvious that the managed account concept is far superior. Of greater import is that we have never even approached a margin call.

All our accounts are set up in the client's own name at a broker or bank, as opposed to being "pooled". This eliminates the main (and valid) criticism of hedge funds: lack of transparency. With our product, you may access your account online with the custodian anytime, if desired. In addition, one may redeem at any time without any penalties or special fees, as opposed to a quarterly or annual limitation. Finally, our minimum account size of $100,000. is much lower than most hedge funds.

Initial positions typically represent about 3 to 4% of the value of the portfolio depending upon its size, so a standard account will be well diversified (25-35 securities). Under certain circumstances the client will receive interest on the short cash balances. Currently , this credit completely offsets our annual management fee.

The following returns should give you a basis for understanding what should be expected under various market scenarios. For instance, the first four years witnessed declining markets, and our returns were excellent, both on a relative and absolute basis. On the other hand, the period from 2003 to present witnessed an up market, and because we remained short (which is the objective of this product) the return was negative (although not nearly as negative as the inverse of the market returns). We believe that we are entering a period similar to the 2000-2003 timeframe, with all the attendant economic and market problems directly ahead, and that the magnitude of our returns will be quite favorable (hopefully similar to the earlier period). On the other hand, the prospect of experiencing another period similar to the parabolic blowoff from 2003, given current valuations and complacency, appear slim. In fact, we do not believe we will again witness such a blowoff for many years.You must decide whether you agree with this assessment. Performance results for the first quarter of 2008 were +12.04% net.

Short-Biased Managed Account History - Net of Fees 12-31-99 to 03-31-08
Time Period	Composite Return (%)	Dow Jones	S & P 500
12-31-99 to 12-31-03	30.83	-1.90	-19.85
12-31-03 to 03-31-08	-5.11	28.24	28.50
Inception to Date
12-31-99 to 03-31-08	24.14	25.80	3.00

Lang Asset Management, Inc.(LAM) is a portfolio manager that invests solely in U. S. based fixed and equity securities. LAM is defined as an independent investment management firm that is not affiliated with any parent organization. Composite has been valued monthly and portfolio returns have been weighted by using beginning-of-month market values plus weighted cash flows. The benchmark is the inverse of the average of the two indices. All indices include dividend income. Performance results are presented both before and (after) management fees, trading, and custodial fees.The management fee schedule for accredited investors is as follows: Maintenance Fee 2.0% annually of the assets. Minimum Account Size- $100,000. Minimum Annual Fee -$2,000 Performance Fee 20% of the net gain (defined as the sum of all realized and unrealized gains and losses over a 12 month period). The concept of a "high water mark" is utilized. . No alteration of composites as presented here has occurred because of changes in personnel. A complete list of firm composites and performance results is available upon request. It cannot and should not be assumed that future results will be profitable or will equal or exceed past results.

Consultants are increasingly recommending this asset class, similar to their endorsement of international equities as a diversification measure about a decade ago.

For additional information and fee schedule click on Getting Started.