UPDATE ON CURRENT INNER CIRCLE IDEAS:

We have nine outstanding ideas currently running including the following:

ALTAIRNANO (NSDQ: ALTI) BUY

PSIVIDA (NSDQ: PSDV) BUY

AGF MASTER LIMITED PARTNERSHIP (TSX: AFP-U, OTC: AGFRF) BUY

MULTI-MANAGER LIMITED PARTNERSHIP I (TSX: MMN-U, OTC: MMPUF) BUY

MACKENZIE MASTER LIMITED PARTNERSHIP (TSX: MKZ-U, OTC: MCKZF) BUY

AMALGAMATED INCOME LIMITED PARTNERSHIP (TSX: AI-U, OTC: AILXF) BUY

PALM (NSDQ: PALM) HOLD

AMERICAN HOME MORTGAGE (NYSE: AHM) BUY

NEWCASTLE INVESTMENT (NYSE: NCT) BUY

BUY ALTAIRNANO:

This week the company announced it’s entered an agreement with ISE Corp to jointly develop and commercially supply NanoSafe battery packs for use in hybrid electric and all electric heavy-duty vehicles. ISE is a developer and manufacturer of electric and hybrid-electric drive systems and components for heavy-duty vehicles.

It’s one more partner in a new sector. Whenever Altair links up, it means increased revenue. Altair always makes sure the company it works with is buying its products for development and testing.

ISE is a leading producer of electric, hydrogen and diesel/gasoline hybrid trams and buses for cities, municipalities and companies. The company has been around for about a decade. It has vehicles deployed in Long Beach, Calif., Los Angeles, Anaheim, Calif., and even New Jersey.

This opens another lucrative sector for Altairnano and a new revenue source. ALTAIRNANO IS A BUY.

BUY PSIVIDA:

Not much news from Down Under. The stock is still trading at ridiculously low levels relative the growing positive news stories. Adding to that, Australia has increased its commitment to creating a viable, sustainable space for nanotech research and enterprises. (For the news release, click here.)

PSIVIDA IS A BUY.

BUY AGF MASTER LIMITED PARTNERSHIP, MULTI-MANAGER LIMITED PARTNERSHIP I, MACKENZIE MASTER LIMITED PARTNERSHIP AND AMALGAMATED INCOME LIMITED PARTNERSHIP:

We know that many of you haven’t been able to buy into all four of our financial partnerships because of some extraordinary intervention by and on behalf of some of the management teams wanting to keep Americans out of their companies.

Those who have been able to get their brokers to ignore the ridiculous excuses and now own at least some or all four partnerships are continuing to fare well. On the whole, the partnerships structured to manage deferred compensation programs for brokers and insurance salesmen have been trading generally gradually higher while garnering some initial dividends.

Multi-Manager paid our last dividend of 7.4 cents while setting up its next cash payment, anticipated to be a similar amount. This gives the partnership a current yield of 18 percent-plus. Meanwhile, Amalgamated Income will be paying us another 13 cents, generating a yield in excess of 21 percent.

Although AGF Master and MacKenzie Master may be annual payers, don’t despair; the shares will reflect this pending payment stream as we continue to hold them.

It continues to be a battle for some to buy into these publicly traded stocks, but keep trying. These four partnerships are public, and as public partnership, they’re subject to the rules of the Canadian exchanges; when operating and listed in the US, they fall under US securities law.

THOSE WHO ARE ABLE TO BUY AGF MASTER LIMITED PARTNERSHIP, MULTI-MANAGER LIMITED PARTNERSHIP I, MACKENZIE MASTER LIMITED PARTNERSHIP AND AMALGAMATED INCOME LIMITED PARTNERSHIP, CONTINUE TO DO SO. There’s nothing wrong with owning these companies.

HOLD PALM:

Palm announced a proposed deal to sell 25 percent of its company to a private-equity investment company, Elevation, for $325 million. Elevation has done some other partial takeover deals, including Forbes.

The deal will bring new management to Palm, including board members such as Jon Rubinstein, Apple’s former vice president of its iPod division.

In addition to the major capital participation, Palm shareholders will also get a special dividend slated at $9 a share.

At this point, we’re waiting for further details. This includes a potential proxy vote over the changes in the company, its shares and that big dividend.

But in general, the cash amount, along with the remaining ownership, means that we’ll have a nice gain. We’re getting more than half the pre-deal value of the shares in the cash dividend, while still owning 75 percent of the company. The only question left is how much longer to hold the shares pending the cash dispersal.

FOR NOW, HOLD YOUR PALM SHARES. We’ll update you further on our exit strategy in the coming days.

BUY AMERICAN HOME MORTGAGE AND NEWCASTLE INVESTMENT:

The continued steady price performance during the past week isn’t such a bad thing. Both of our mortgage plays on the overblown subprime market are still doing well for us overall in price and even more so from the past and pending dividend payment streams.

CONTINUE TO BUY AMERICAN HOME MORTGAGE AND NEWCASTLE INVESTMENT FOR THE RETURN OF REALITY IN THEIR SHARE PRICES IN THE SHORTER TERM. We’ll continue to pick up some pretty impressive dividend credits to our accounts along the way.

In the meantime, private-equity investors are stepping into the market with larger spending budgets, including a deal by Lone Star to grab Accredited Home Lenders. This will lead more folks to eyeball quality companies in the lending biz with even-more-impressive cash flows.

The key to private-equity mortgage portfolio operators is how they work with the cash flows. From the outside the companies, you can lever up the stock ownership to make it better in general. But if you’re on the inside with a full understanding of the portfolio, you can really make the cash flows work for you. All the better, then, to take these private.

Remember, weekly updates for Inner Circle are sent out every Wednesday afternoon, and you can always visit www.neilsinnercircle.com to make sure you don’t miss a trade or an update.

READY FOR SOME VOLATILITY?

NOTE: The following is free market commentary that Neil George has written for his By George subscribers. The advice and recommendations below are simply for your benefit as investors. And recommendations listed below are not current Inner Circle recommendations, nor will they be followed and updated on a continuous basis. See above for the current Inner Circle recommendations and advice.

I tend to avoid investing in stocks, bonds and fund that are volatile in the markets. Why put myself, as well as folks who follow my lead, through gut-wrenching ups and down if it can be avoided?

Yet, at the same time, if I can get to know a company and its stock and understand why markets put these shares through such ups and downs, then perhaps there’s I can make something of it for a bit more profit.

If and when I come across stocks like this, there can be two ways to make some extra, more-speculative bucks from the oscillations.

The first is to know when to buy and when to sell them. Some may call it swing trading, range trading or a host of other marketing terms for those pushing their ideas and journals focused on trading. But for me, it’s simply buying on the down times and selling during the peak periods. Do that a few times a year and a few more-speculative bucks may show up on your portfolio’s bottom line.

But an even better way is to focus on stocks with ups and downs that also payout big dividends throughout the year, every year.

With these wildly moving stocks, buying when everyone is dumping them can help to build up a great lower cost basis and bolster our overall dividend yield year in and year out.

It’s this second means of working with the waves that tends to interest me more, especially when it comes to the Nibblers section of the Personal Finance Growth Portfolio.

But this strategy has some costs–not to you, but to me. If you follow my lead on some of these deals, then you need to understand the concept of seasonal ups and downs. If you don’t, then don’t even think of investing in these stocks, because if you do, I don’t want to be berated with questions about why such-and-such stock is down this month or down these few months year in and year out.

When I put such a stock idea out there, I make it clear why we’re investing in it and what we should expect to deal with. This really comes into play when we write about tanker and petrol shipping companies.

When it comes to the energy markets, I don’t want to simply pander to those who want to hear about oil going to $80, $100 or $200 bucks a barrel. What I do want is to know how to get through the minutia of the energy markets to find out how to make money regardless of the direction of the price of crude, gas or any other part of the petrol patch.

Such is the case with tankers. My energy guru, PF Associate Editor Elliott Gue, explains these cyclical investments for us:

Every year, more than 735 billion gallons of crude are transported across international borders. And the oil trade is expanding, roughly doubling in the past twenty years.

Ninety percent of all oil shipped from the Middle East and more than half the rest is shipped by tanker. Dedicated tanker companies own these ships, leasing them out for a daily fee known as a day-rate.

But despite that growth backdrop, the tanker stocks have been among the most disappointing sub-sectors in the energy market during the past year. The prime culprits for the group’s underperformance: seasonality in tanker dividends and concerns over new tanker supply.

Both concerns are overblown—the tanker stocks continue to offer attractive yields for investors and higher demand will offset growth in supply. Here’s a review of the tanker industry and a handful of our favorite plays.

The key to understanding the ups and downs comes from following the Baltic Dirty Tanker Index. This index reflects day-rates charged on 13 different tanker routes around the world.

The index includes both Suezmax and Very Large Crude Carrier (VLCC) routes. Suezmax carriers are midsized tankers that are normally transport crude oil around the Atlantic basin and on shorter-haul routes. VLCCs are much larger carriers used for routes from the Middle East.

There are four clear seasonal spikes for this tanker index in as many years. The reason for this seasonality is simple: Demand for oil to produce gasoline is highest during the summer driving season.

Therefore, during the height of winter the world’s refineries import the oil they’ll need to cover that summer demand. Demand for tankers is higher in the winter and day-rates tend to rise.

Winters in the past such as the 2004-05 saw a particularly large spike in tanker demand because of a shortage of tankers in the Middle East and heavy imports into China. This past winter, in contrast, the tanker market played out almost exactly as it did in 2002 and 2003; it’s an absolutely normal year for the tankers.

Unlike most other companies, dividends aren’t fixed at some definite annual rate but rise and fall based on profitability and day-rate trends; tanker companies tend to pay out the highest dividends during the winter months.

In the third quarter of 2005, for example, dividends were on average less than 50 percent of the second quarter level. Most of the tankers declare fourth quarter dividends toward the end of February; dividends are likely to rise sharply from third quarter levels.

The second major concern has been an increase in tanker supply—the world’s total tanker fleet is projected to grow by 5 to 7 percent annually through 2008.

Two major points offset that supply increase. First, tanker companies are scrapping their single-hull tankers in favor of double-hull ships. Double-hull tankers offer more protection against spills, and most big tanker firms are getting rid of their single-hulls because shippers are unwilling to pay full market rates.

Second, oil demand growth remains strong. Yes, this refers to China. The country’s import requirements are rising parabolically. Rapid expansion in global oil trade will offset much of the rise in tanker supply.

So, if you understand these factors and the others that we roll out and follow inside Personal Finance, you’ll be able to cash in on the big cash flows on an annual basis and know when to buy and when to stay put and hold.

For more on this, look to the pending issue of Personal Finance, which will be mailed this week and posted on the Personal Finance Web site this Saturday.

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