Note 2. Investments

The cost and estimated fair value of the investments (other than an investment accounted for under the equity method of accounting) are as follows:

	Cost		Gross unrealized gain		Gross unrealized loss			Fair value
December 31, 2011
Money Market Funds	$	5,373,000	$	0	$	0		$	5,373,000
Equity Securities		101,000		3,134,000		(54,000	)		3,181,000
		5,474,000		3,134,000		(54,000	)		8,554,000
Less Cash Equivalents		5,373,000		0		0			5,373,000
Total Investments, December 31, 2011	$	101,000	$	3,134,000	$	(54,000	)	$	3,181,000


December 31, 2010
Treasury Bills	$	5,197,000	$	0	$	0		$	5,197,000
Money Market Funds		170,000		0		0			170,000
Equity Securities		101,000		2,783,000		(54,000	)		2,830,000
		5,468,000		2,783,000		(54,000	)		8,197,000
Less Cash Equivalents		170,000		0		0			170,000
Total Investments, December 31, 2010	$	5,298,000	$	2,783,000	$	(54,000	)	$	8,027,000

Realized gains and losses on investments are as follows:

	Years Ended December 31,
	2011		2010

Gross Realized Gains	$	73,000	$	0
Gross Realized Losses		0		0
Net Realized Gain	$	73,000	$	0

At December 31, 2011 and 2010, the Company's significant investment in equity securities is 343,267 shares of Rudolph Technologies (Rudolph), accounted for under the available-for-sale method. As of December 31, 2011, the aggregate value of the Company's Rudolph shares as reported on the Nasdaq Stock Exchange was approximately $3,134,000 with an approximate cost of $45,000.

As of December 30, 2011, the shareholders of PPT Vision (PPT) voted to accept an offer to merge with Datalogic Scanning Holdings, Inc. (Datalogic). The terms of the merger required Datalogic to purchase all of the shares outstanding. Electro-Sensors, Inc. recognized a $72,000 gain on the sale of its PPT shares to Datalogic. The Company received the funds for their shares of PPT in January 2012.

Investment Reported on Equity Method

At December 31, 2010, the Company owned 551,759 shares of PPT, which was 1.4% of PPT's outstanding common stock. The fair value of its holdings based on the quoted market price at December 31, 2010 was approximately $99,000 with an approximate cost of $2,434,000.

Because the Company owned approximately 1.4% of PPT's outstanding stock and the Company's Secretary owned a controlling interest in PPT, it had been determined that the Company had "significant influence" over the operations of PPT, and as a result its ownership interest should be reported using the equity method of accounting for investments. In the first quarter of 2011, it was determined that the Company no longer had "significant influence" over the operations of PPT and accordingly, the Company began accounting for its investment in PPT as an available for sale security. Upon conversion to available-for-sale classification, the Company recorded the stock at its adjusted basis of $0 which reflected its carrying amount at that date.

Changes in Other Comprehensive Income

Changes in Other Comprehensive Income are as follows:

	December 31,
	2011			2010

Unrealized Gains
Unrealized Holding Gains arising during the Period	$	424,000		$	519,000
Less: reclassification of gains included in net income		(72,000	)		0
		352,000			519,000

Deferred Taxes on Unrealized Gains:
Increase in Deferred Taxes on Unrealized Gains arising during the Period		161,000			198,000
Less: Reclassification of taxes on gains included in net income		(27,000	)		0
		134,000			198,000

Net Change in Other Comprehensive Income	$	218,000		$	321,000