Manager's Comments
October 3, 2008
Dear Investors,
Over the past several weeks, we have experienced significant drops in all of the major equity indices due to unprecedented stresses to the credit markets and our financial system. Many major institutions have been seized by the government and sold, and the perceived safety of money market funds has been questioned. As we have been communicating for the last few months, our belief was that the extent of the global credit problems was not being fully appreciated by the markets. Our cash position had been rising in an effort to help protect the Fund from these extraordinary market conditions.However, with the passage of a massive federal program for financial service companies and the extension of FDIC insurance to money market funds, we believe that we will likely relieve some of the near-term stress in the credit markets. Rather than an additional reactive solution (like actions to save individual companies), this bailout plan would be the first proactive remedy that should bring some stability back to the financial system. We have been preparing for this type of event, and have been selectively adding to some existing names in the Fund. We have also been buying a few new names that, due to the declines this week, have reached extremely discounted prices. However, we should point out that while the severity of the credit crisis is finally being reflected in stock prices, the longer-term problem of a weakening economy remains. For this reason, we are still being very cautious in reducing our cash position, and it could rise again depending on market events.
The Fund did not add any new positions in the month of August.
Ryan Jacob
Portfolio Manager
Jacob Internet Fund
www.jacobinternet.com
Distributed by Quasar Distributors, LLC.
There are specific risks inherent in investing in the Internet area, particularly with respect to smaller capitalized companies and the high volatility of Internet stocks. Please refer to the prospectus located at www.jacobinternet.com for more complete information including investment objectives, risks, fees and expenses.
For more information about the Fund and its holdings, please click on Fund Holdings Please note that these holdings are subject to change and should not be considered a recommendation to buy or sell any security.
For performance information, click on Performance. Past performance does not guarantee future results.
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Quasar Distributors, LLC, Distributor 10/08