Midas Fund’s aggressive investment approach in quality mining companies enhanced returns in the quarter. As the prices of precious and base metals fluctuated, the Fund sought to reallocate capital away from those resource companies whose share prices appeared had appeared to rise to generous valuation levels and towards quality companies whose share prices appeared to offer discounted value. Further seeking to exploit the apparent valuation discrepancies in the markets, the Fund’s short selling of certain companies whose valuations were stretched or whose operations appeared at risk of negative developments was paired with leverage long positions in attractive gold, platinum, and other natural resource companies.  Currently leveraged, Midas Fund anticipates generally emphasizing growing companies, particularly those in the platinum sector, with operations offering increasing cash flow, expanding production profiles, promising exploration potential, and/or other special growth features.

Employing flexible investment and seasonal timing strategies, Midas Special Fund maintained a leveraged position during the quarter. Due to recent market fluctuations and the overall movement of equities this quarter, the Fund continued its strategy of holding blue chips and other well known companies. By the end of the quarter, Midas Special Fund’s holdings included the stocks of some of the largest and best known U.S. companies in insurance, business services, and information retrieval. Over the course of future market fluctuations, the Fund may seek opportunities to use its flexible investment strategy and seek a defensive investment position.

Midas Perpetual Portfolio seeks to preserve and increase the "purchasing power" value of its shares over the long term. The investment strategy of the Fund acknowledges a broad range of economic possibilities and seeks to incorporate investments appropriate for each of them. Investors who wish to invest all or a portion of their capital in a way that does not depend on any particular outcome for the economy should consider purchasing shares in the Fund.

In pursuit of its investment objective, the Fund invests a fixed "Target Percentage" of its total assets in each of the following categories:  gold; silver; Swiss franc assets; hard asset securities; large capitalization growth stocks; and dollar assets. At each calendar quarter end, the Fund’s investment manager compares the Fund’s actual percentage of investments in a given category with the Target Percentage for that category. Should the actual percentage at that time vary from the Target Percentage (due to market fluctuations or other factors) by more than one-tenth of the Target Percentage for that category, within the subsequent quarter the investment manager will normally adjust the Fund’s investments as needed to more closely align the actual percentage to the Target Percentage (unless it is substantially re-aligned at any time during the subsequent quarter by further market fluctuations or other factors). Although it may adjust the Fund’s portfolio at other times and for other reasons, the Fund’s investment manager generally does not attempt to anticipate short term changes in the general price level of any investment category.