Midas Fund’s focus on quality gold mining companies in the recent quarter enhanced returns. As the price of gold fluctuated, Midas re-allocated capital to those gold miners whose exploration programs offered the greatest potential to add resource ounces of gold to their holdings.  The Fund’s short selling of certain companies whose valuations were stretched or whose operations appeared substandard negatively impacted performance as exuberance drove their prices even higher. The Fund’s strategy in the months ahead will continue to be to seek investments in attractive gold, platinum, and other natural resource companies opportunistically as markets recover. Midas will generally emphasize larger companies with cash flowing operations, attractive growth profiles, exploration potential, or other special 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 pharmaceutical preparations. Over the course of future market fluctuations, the Fund may seek opportunities to use its flexible investment strategy and seek a defensive investment position. The Fund may narrow its focus in stocks to a small number of attractive companies and invest the balance of its assets in short term U.S. Treasury Bills and overnight repurchase agreements.

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. The Fund will buy or sell investments as needed to correct any discrepancy between its actual holdings in a given category and the Target Percentage for that category if such a discrepancy exceeds one-tenth of the Target Percentage.