21. To what extent and for what purpose do you use derivatives? Please be specific. How might this change in the future?

We limit our use of derivatives to options, specifically covered calls and straddles. We use options to supplement our fundamental research and to enhance our total returns. Having determined fair prices for our companies, we will use options when we don’t mind being called out and we collect a sizeable premium for the privilege. We limit our use of options to less than 5% of the portfolio, and we expect to use fewer options when the premiums are no longer attractive.