investing, purchaing power, & frictional costs

Part I: INTRODUCTION & MAINTAINING PURCHASING POWER The fundamental purpose to save or invest versus spend is to have more money in the future. In a simple world, one without inflation or investments as alternatives to saving, money grows through saving more out of income relative to what is consumed, or spent. Therefore, today’s dollars are valued in the same terms as are tomorrow’s dollars. Any interest earned on savings translates into increased purchasing power. Introduce Inflation and your savings must earn an average annual long-term interest rate at least equal to inflation, otherwise the value (or purchasing power) of your money is in decline even if the dollar amount is increasing. If you are satisfied with simply maintaining your purchasing power, the best option is to put your money in Treasury Inflation-Protected Securities or “TIPS”. Government securities provide the safest means to preserve, but not increase purchasing power.

Since simply saving your money is not sufficient to maintain the initial amount saved, I will regard savings and investments as one in the same. The only way to earn interest on your money is to invest it. In this world the fundamental problem is where to put money in order to grow future purchasing power. This implies a reasonable rate of return over inflation (ignoring income taxes for now). (If the parallel between saving and investing is unclear refer to the passage below for a brief but hopefully thorough explanation.)

When you put your money in a savings account it is usually required that you keep a certain amount in that account for an extended period. When you go to a bank to withdraw your money, it would be a rare occasion that you have any problem getting it out. Having your money in a savings account may not appear to be an investment, but actually is. The bank uses your money and loans it out to individuals or businesses. Recall there is typically a restriction requiring that you not have access to your money for some amount of time. For the time you forego the use of your money you are paid interest. At the end of the period, you can take the money you put in the savings account and use it in any way you wish. A bond is very much the same. A business issues a coupon or (interest paying) bond, if you invest you give them money, which you expect back at the end of some specified period. To compensate you for the time you forego the use of your money they pay you interest, then at the end of the period they return to you the principal investment you initially made. The interest you get from a coupon bond is usually better than what you can get from a savings account and is also typically better than inflation. The downside is that there is a chance that the business will not be able to pay you back. Properly selecting businesses to invest in whether a bond or stock should be done carefully and with at least some basic investment knowledge. The important point is that if you must forego the use of your money you should require that your purchasing power be not only maintained, but rather enhanced. Such is the benefit of having money-you can either spend it, or prudently lend it to others. If you lend it you must get more back than you lent out, to provide for the effects of inflation, and for the potential that you might not get it back. The only certain way to get your money back is by investing in government securities (e.g. TIPS) but you will not get more than an inflation return.

The most attractive avenue to grow your investments and purchasing power, and to guard against inflation is by investing in good American businesses. (While many international businesses are also perfectly fine, they are not necessary for this conversation.) Most people do not have the means or the desire to invest their future purchasing power in private business and instead turn to public companies. This is arguably the better option anyway since it is easy to take your investment back and for most people there are many more public businesses to choose from. American businesses in the last 20-30 years have on average earned between 7-10 percent for investors and about 6-7 percent over a longer time frame, whereas inflation has averaged about 3-4% over the long term. If you believe that in 20 years from now our country’s standard of living will have risen, then the most sensible thing to do with your money is to own small pieces of the best American Businesses (stocks) at sensible prices. The Standard of living can be measured by looking at income levels, quality of housing and food, medical care, educational opportunities, transportation, communications, etc. When economists talk about standard of living however, most are referring to changes in per capita (per person) Gross Domestic Product (GDP)-calculated by GDP divided by the population. GDP is defined as the total production of goods and services within the United States. The table below provides the changes in Real GDP during different time periods over more than the last 100 years. If the standard of living is to increase over time, then the GDP must also increase, meaning the total production of goods and services must also increase accordingly and by definition the average business will march similarly upward. If you own a claim on a prosperous business, then by definition you must prosper too. If you’re completely confused just think about it this way: Our country over the last century, has experienced two world wars, a great depression with unemployment rising to about 25%, two (possibly) three serious financial fiascos, the terrorist attacks of 9-11, the cold war, an assassinated president, the civil rights movement, etc, yet our standard of living increased about seven-fold. Had you purchased pieces of American businesses over time and without regard to market levels, you would have prospered similarly. There were however times when inflation rates were very high, even higher than most American businesses returns and those who held cash or earned an unduly low return suffered significant long-term reductions in their future purchasing power. Over the next century, it is certain that our country will experience periods of extreme uncertainty, but our country is equally certain to attain continued prosperity-a result of having a functional rule of law, belief in meritocracy, and an economic system that on the whole is market based. Seven fold increase in REAL GDP per person:

United States 1820-1870 1.43% 1870-1913 1.82 1913-1950 1.61 1950-1973 2.45 1973-2005 1.91 Source: GGDC

United States 1820 $1257 1870 2445 1913 5301 1950 9561 1973 16689 2005 30519

Real GDP Per Person: Growth Rate

PART II: IF YOU WISH TO GROW YOUR PURCHASING POWER, BEWARE OF MUTUAL MOST FUNDS!!!

3 PRIMARY REASONS TO RECONSIDER YOUR MUTUAL FUNDS AS A SOUND MEANS FOR INVESTMENT

(i) Most mutual funds are huge, they are so big that the amount of money they have to invest restricts the

number of businesses in which they can choose to invest. (ii) Most mutual Funds are closet index funds and tend to over diversify owning 100 or more stocks at a

time. (iii) They charge way too much in fees and expenses for services they (don’t) provide, which significantly

reduces the investors actual returns separate from the funds reported returns. Let’s explore why investing in an S&P 500 or DJIA index fund with low fees and expenses are better investments than mutual funds.

MUTUAL FUNDS

WHAT MUTUAL FUNDS PROVIDE: The basic attractiveness of stock mutual funds allows individuals to benefit similarly with that of general business. For more than the last century, American businesses have done roughly 2 percent better than inflation. Meaning stocks have provided the best means to not only to preserve, but to grow purchasing power over time. Mutual funds have provided an almost effortless avenue to making such investments. The overwhelming majority of public and private pension funds, employer sponsored retirement plan participants (401(k)’s, IRA’s, etc,) personal brokerage accounts, buyers of annuity contracts & life insurance policies, clients of financial planners, advisors, trusts, and others seek to enhance either their own, or their clients purchasing power via mutual funds. That is, the majority of Americans have placed their retirement savings, discretionary income, and inherited assets in American business via Mutual Funds. The assumption is that mutual funds provide an “experienced” and “competent” investment managers to look after clients money and to make investments with the clients best interests in mind. The Manager makes decisions about what, when, and how much to buy or sell. Investor’s pay for this however, in fees and expenses, which funds justify by claiming to earn investors better returns than an index (e.g. DJIA or S&P 500) return. (Though this is in large a myth.) Index funds were created to provide investors a means to invest in general American businesses at a low cost. Index Fund managers do not engage in independent decision-making. Whatever companies make up the index, also make up the index fund. As the index changes so too does the index-fund. As such, index funds charge much less in fees and expenses relative to mutual funds. In order for mutual funds to justify their existence they must perform better than an index fund after all fees, expenses, and taxes. We will find they do and will not.

MUTUAL FUND MARKET

A fat wallet is the investor’s worst enemy. However globally, mutual funds manage a total of $25 trillion. United States Domiciled mutual funds manage about 46% thereof, or $12 trillion, $4.8 trillion of which is invested in U.S. listed stocks. The Top 25 stock fund families manage more than 2.3 trillion dollars. The mutual fund market is huge and the majority of this capital is invested by only a few very large funds. This requires that their capital be concentrated among the largest stocks. To understand why these restrictions occur consider the following: If an investor owns 100 investments of equal proportion, then each will have a 1% influence on the aggregate return. If a fund manages $10 billion, with 100, 1% positions, and limits their controlling interest to 5% (which is normal,) then we can determine how large a company must be in order for them to be considered for investment by the fund. For example, $10 billion invested equally in 100 companies will have invested $100 million in each. Factoring in the requirement that ownership be no more than 5% requires the business to have a market value of at least $2 billion (100m/.05=2000b). As capital increases beyond $10 billion the investor finds their investment options in rapid decline. A portfolio of multiple businesses will earn the average of the returns provided by those stocks held within the portfolio. If you select only a few good companies and pay a reasonable price, you are obviously destined to earn a better return relative to someone who invests in a much larger group made up of good, bad, and average businesses. Most mutual funds hold dear the concept of wide diversification, investing in more than 100 positions at a time. But it is not often that there are 100 attractive companies available for purchase at any point in time, rather it is quite rare, often impossible. This concentration of mutual fund capital among only a few funds coupled with large diversification restricts the returns that mutual funds can earn which tends to fall somewhere between the returns for the two primary exchanges in the United States (before fees and expenses). The two primary stock indexes in the U.S. are the Dow Jones Industrial Index (DJIA) and the Standard and Poor’s 500 (S&P 500). The S&P 500 consists of 500 companies. The DJIA consists of 30 companies, all of which are included within the S&P 500 index. The DJIA by design is an attempt to monitor the more prosperous businesses (or at least largest, most popular, and widely held) and should as a result do better than an index that is designed to monitor the general or more average business, as does the S&P 500. The inevitable result is that mutual funds are destined to earn index returns, before fees and expenses, because they are, in effect, the index. After fees and expenses mutual funds will provide investors a lesser return relative to the returns provided by the index fund with a much less expense ratio. From a list of more than 725 U.S. Domiciled mutual funds provided by Money Magazine in 2007, about 68 were U.S. equity funds with more than $10 billion assets under management. The average annual return reported by the 68 Funds was no less than 10.72% for the 10-year period reviewed. Together, these 68 funds manage more than 2 trillion dollars. It is curious that 58% of them report having outperformed the 10.02% return of the S&P 500. As presented this is not an out-right lie, though it is certainly misleading. Can we really blame them for presenting their case in the most favorable light? -The answer is plainly, yes. The “reported” return is largely before having accounted for annual expenses, other obscure fees, and taxes. This is equivalent to measuring business success based upon sales, instead of the rate of return-the important factor as far as the sensible investor is concerned. The 10-year average return for the 68 mutual funds before any fees, expenses, or taxes was 10.72 versus 10.02 for the S&P 500. After load fees, if any, and annual expenses the mutual funds earned 9.75 versus a return of 9.81. If we apply the industry average index fund expense (which is 0.2%) to the S&P 500, the S&P 500 would have done better than mutual funds. Finally, if we apply both fees and expenses as well as the taxes you must

pay for distributions (dividends and capital gains of fund portfolio companies,) the S&P 500 would have provided the investor with an annual return of 9.71% versus only 8.88% for the professionally managed mutual Funds. A detailed summary of the data used in these conclusions is provided below for the interested reader. And is in the following order:

(1) Mutual Fund Capital – Global & U.S. (2) Portfolio Holdings of Long Term Mutual Funds – By Asset Class (3) Top 25 Domestic Stock Funds (4) Stock Funds with more than $2 billion and at least a 10 year record (From list of 725 funds) (5) Number of Domestic Companies Available with Increasing Investment Capital (6) Dow Jones Industrial Average by Market Capitalization (7) Standard And Poor’s 500 by Market Capitalization (8) Companies with a Market Capitalization of at least $2 billion (Valueline Database) (9) Summary Data 68 Funds Reported Returns, Pre-Tax Returns, & “Take Home Returns” (10) Summary of (9)

(1) Mutual Fund Capital – Global & U.S. U.S. Has the World's Largest Mutual Fund Market(percent of total assets, 2007)

Total Worldwide Mutual Fund AssetsUnited States 46% 12.05$ Europe 34% 8.91$ Africa and Asia/Pacific 14% 3.67$ Other Americas 5% 1.31$

Total U.S. Mutual Fund AssetsDomestic Stock Funds 40% 4.81$ International Stock Funds 14% 1.68$ Bond Funds 14% 1.68$ Money Market Funds 26% 3.13$ Hybrid Funds 6% 0.72$

Note: Components may not add to 100 percent because of rounding.

$26.2 trillion

$12.0 trillion

Sources: Investment Company Institute, European Fund and Asset Management

Association, and other national mutual fund associations

(2) Portfolio Holdings of Long Term Mutual Funds – By Asset Class

Year

Total Net

Assets

Common &

Preferred

Stocks

Long-Term

U.S.

Government

Bonds

Corporate

Bonds

Municipal

Bonds

Liquid

Assets Other

Total Net

Assets

(millions of

dollars)

1994 100.0% 87.1% 2.3% 2.0% 0.0% 8.3% 0.3% $852,765

1995 100.0 88.4 2.1 1.5 0.0 7.8 0.2 1,249,077

1996 100.0 91.3 1.1 1.2 0.0 6.2 0.2 1,726,010

1997 100.0 91.8 0.9 0.9 0.0 6.1 0.2 2,368,024

1998 100.0 93.6 0.5 1.0 0.0 4.8 0.1 2,977,944

1999 100.0 94.7 0.2 0.7 0.0 4.3 0.0 4,041,890

2000 100.0 93.4 0.2 0.6 0.0 5.8 0.0 3,961,922

2001 100.0 94.0 0.2 0.7 0.0 5.0 0.0 3,418,163

2002 100.0 93.8 0.5 1.0 0.0 4.6 0.0 2,662,461

2003 100.0 94.7 0.2 0.7 0.0 4.3 0.0 3,684,162

2004 100.0 94.8 0.2 0.7 0.0 4.2 0.1 4,384,049

2005 100.0 95.1 0.2 0.7 0.0 3.9 0.1 4,939,754

2006 100.0 95.1 0.3 0.6 0.0 3.9 0.1 5,910,542

2007 100.0 94.8 0.3 0.6 0.0 4.2 0.1 6,521,431

Portfolio Holdings of Long-Term Mutual Funds as a Share of Total Net Assets by Type of Fund(end of year)

Equity Funds

(3) Top 25 Domestic Stock Funds (4) Stock Funds with more than $2 billion and at least a 10 year record (From list of 725 funds)

As of Jan 2007:

Domestic Stock Funds with assets of more than $10 billion

Fund By Fund Family Assets Fund By Fund Family Assets(millions) (millions)

American Century Janus Ultra Inv. twcux 14,762$ Janus Fund 11,496$ American Funds: Legg Mason AMCAP AMCPX25,237 Aggressive Growth 10,833 American Balanced ABALX55,880 Value Trust 20,750 American Mutual AMRMX19,359 Longleaf Partners Capital Income Builder CALBX80,853 Longleaf 10,883 Fundamental Investors ANCFX38,375 Lord Abbett Growth Fund of America AGTHX161,166 Affiliated 20,837 Income Fund of America AMECX76,353 Mid Cap Value 10,482 Investment Co of America AIVSX 88,703 MFS Wash mutual AWSHX83,998 Total Return 11,582 Calamos Neuberger Berman Growth A CVGRX17,491 Genesis 10,850 Davis OakMark New York Venture NYVTX42,374 Equity and Income 11,534 Dodge & Cox Oppenheimer Balanced Group DODBX27,064 Main St. 11,730 Stock DODGX64,843 Putnam - Fund for Growth 15,262 Fidelity Selected Balanced 22,231 American 11,596 Blue Chip 20,574 T. Rowe Price Contrafund 68,771 Equity income 23,199 Diversified Growth 16,953 Growth 18,290 Equity Income 29,886 Mid cap Growth 15,570 Equity Income II 11,646 Van Kampen Freedom 2010 12,062 Comstock 19,429 Freedom 2020 16,495 Equity and income 18,002 Freedom 2030 10,342 Growth and income 10,211 Growth and Income 30,549 Vanguard Growth co 30,110 500 Index 117,740 Low Priced 38,784 Asset Allocation 12,551 Magellan 45,959 Energy 10,417 Mid Cap stock 12,853 Growth index 12,515 Puritan 25,512 Health Care index 26,834 Spartan 500 index 15,726 Prime Cap 31,811 Value 17,832 Reit Index 11,592 Franklin Small Cap index 13,796 Income 50,978 Star 13,789 Mutual Discovery 12,315 Value Index 10,391 Mutual Shares 20,854 Wellesley 12,597 Templeton Growth 34,578 Wellington 45,169 Harbor Windsor II 47,436 Capital Appreciation 17,643 Windsor 23,751

(5) Number of Domestic Companies Available with Increasing Investment Capital

Top 25 Stock Fund Families

Fund Assets Billions

The Vanguard Group 516.0

Fidelity Investments 434.0

American Funds 420.1

T. Rowe Price Group 135.4

Columbia Management 80.2

Janus 66.4

Franklin Templeton 60.8

Fidelity Advisor 57.4

Legg Mason 47.0

American Century 44.6

Davis Funds 44.4

Oppenheimer Holdings 44.4

BlackRock 35.9

MFS Investment Management 35.6

Invesco Aim Management Group 34.2

Lord Abbett & Co. 34.1

Putnam Investments 33.8

Van Kampen Investments 32.8

Goldman Sachs 29.2

Princor Financial Services 28.3

Ameriprise Financial 27.5

Royce Funds 26.3

Allianz 23.2

Charles Schwab Corp. 22.7

JPMorgan Chase 20.2

Billions

Total 2,335

Average 93

Median 36

Assets Under Market Cap Valueline Morningstar Number of economically

Management Restriction* Database Database attractive businesses**

$ $

10 billion 2 billion 800 968 40





*100 positions **Based upon experience

5% max ownership not necessarily available

in any one for reasonable prices

position

Number of Domestic

Companies:

(6) Dow Jones Industrial Average by Market Capitalization

Company

By Size COMPANY NAME PRIMARY EXCHANGE TICKER As of September 2008 As of Octover 2007

1 Exxon Mobil Corp. New York SE XOM 419 526

2 General Electric Co. New York SE GE 255 418

3 Microsoft Corp. NASDAQ NMS MSFT 242 282

4 Wal-Mart Stores Inc. New York SE WMT 236 189

5 Procter & Gamble Co. New York SE PG 207 221

6 Johnson & Johnson New York SE JNJ 193 190

7 Cheveron Corporation New York SE CVX 179 1938 AT&T Inc. New York SE T 177 257

9 International Business Machines Corp. New York SE IBM 162 161

10 Bank of America New York SE BAC 158 23011 JPMorgan Chase & Co. New York SE JPM 149 157

12 Pfizer Inc. New York SE PFE 125 173

13 Coca-Cola Co. New York SE KO 118 133

14 Hewlett-Packard Co. New York SE HPQ 116 132

15 Citigroup Inc. New York SE C 105 230

16 Intel Corp. NASDAQ NMS INTC 104 150

17 Verizon Communications Inc. New York SE VZ 89 130

18 Merck & Co. Inc. New York SE MRK 69 116

19 McDonald's Corp. New York SE MCD 69 67

20 Walt Disney Co. New York SE DIS 61 68

21 United Technologies Corp. New York SE UTX 57 79

22 Kraft New York SE KFT 50 na23 3M Co. New York SE MMM 48 68

24 American Express Co. New York SE AXP 44 73

25 Boeing Co. New York SE BA 42 74

26 Home Depot Inc. New York SE HD 42 65

27 E.I. DuPont de Nemours & Co. New York SE DD 39 45

28 Caterpillar Inc. New York SE CAT 37 50

29 Alcoa Inc. New York SE AA 20 33

30 General Motors Corp. New York SE GM 5 23

Removed From Index

Altria Group Inc. New York SE MO 42 148

Honeywell International Inc. New York SE HON 31 46

American International Group Inc. New York SE AIG 8 171

Added to Index

Cheveron Corporation New York SE CVX 179 193

Bank of America New York SE BAC 158 230

Kraft New York SE KFT 50 na

MARKET CAPITALIZATION ($ billions)

Dow Jones Industrial Average (DJIA)

(7) Standard And Poor’s 500 by Market Capitalization Company Company Name Symbol Market Company Company Name Symbol Market Company Company Name Symbol Market Company Company Name Symbol Market

By Size Capitalization By Size Capitalization By Size Capitalization By Size Capitalization

1 Exxon Mobil Ord Shs XOM 508.93 101 Franklin Resources Inc BEN 32.35 301 Cognizant Technology Solutions CorpCTSH 10.75 401 Sigma-Aldrich Corp SIAL 6.10

2 General Electric Ord Shs GE 427.06 102 Illinois Tool Works Inc ITW 31.91 302 Ecolab Inc ECL 10.74 402 Avery Dennison Corp AVY 6.07

3 Microsoft Corp MSFT 271.23 103 Transocean Inc RIG 31.46 303 Hershey Ord Shs HSY 10.48 403 Safeco Corp SAF 6.04

4 AT&T Inc T 249.02 104 TXU Corp TXU 31.40 304 Gannett Co Inc GCI 10.48 404 E Trade Finance Ord Shs ETFC 5.93

5 Citigroup Ord Shs C 240.62 105 Union Pacific Corp UNP 30.95 305 Allegheny Technologies Inc ATI 10.46 405 MeadWestvaco Corp MWV 5.78

6 Bank of America Ord Shs BAC 227.24 106 CME Group Inc CME 30.26 306 Leucadia National Corp LUK 10.32 406 Cintas Corp CTAS 5.77

7 PROCTER GAMBLE PG 214.01 107 Dominion Resources Ord ShsD 29.90 307 Dover Corp DOV 10.18 407 Black & Decker Corp BDK 5.76

8 Chevron Ord Shs CVX 198.97 108 Kimberly-Clark Corp KMB 29.54 308 Intuit Inc INTU 9.96 408 Torchmark Corp TMK 5.73

9 Cisco Systems Inc CSCO 195.15 109 Nike Ord Shs Class B NKE 29.52 309 Pitney Bowes Ord Shs PBI 9.87 409 IMS Health Inc RX 5.70

10 Johnson & Johnson JNJ 184.76 110 Burlington Northern Santa Fe CorpBNI 29.39 310 Apollo Group Inc APOL 9.85 410 Temple-Inland Ord Shs TIN 5.69

11 Wal-Mart Stores Inc WMT 180.79 111 Capital One Financial Ord ShsCOF 29.13 311 Masco Corp Ord Shs MAS 9.79 411 Goodyear Tire & Rubber Ord ShsGT 5.66

12 AIG-AMERIC.INT.GRP AIG 171.43 112 Applied Materials Inc AMAT 29.06 312 Network Appliance Inc NTAP 9.75 412 Eastman Chemical Co EMN 5.59

13 Pfizer Ord Shs PFE 169.99 113 Apache Corp Ord Shs APA 28.85 313 Synovus Financial Corp SNV 9.74 413 Ball Corp BLL 5.58

14 Google Inc GOOG 167.08 114 Hartford Financial Services Group IncHIG 28.74 314 Maxim Integrated Products Inc MXIM 9.56 414 Barr Pharmaceuticals Inc BRL 5.57

15 JP Morgan Chase Ord Shs JPM 161.82 115 Baker Hughes Inc BHI 28.27 315 Computer Sciences Corp CSC 9.47 415 Wyndham Worldwide Corp WYN 5.51

16 IBM Ord Shs IBM 158.66 116 DIRECTV Group Inc DTV 28.23 316 Bed Bath & Beyond Inc BBBY 9.47 416 Patterson Companies Inc PDCO 5.49

17 Intel Corp INTC 148.39 117 Stryker Corp SYK 27.95 317 AvalonBay Comm Ord Shs AVB 9.39 417 Office Depot Inc ODP 5.43

18 ALTRIA GROUP MO 143.28 118 Southern Company SO 27.93 318 Coventry Health Care Inc CVH 9.37 418 NiSource Inc NI 5.34

19 ConocoPhillips COP 142.85 119 SunTrust Banks Ord Shs STI 27.81 319 Laboratory Corporation of America HldgLH 9.33 419 Akamai Technologies Inc AKAM 5.30

20 Coca-Cola Co KO 130.50 120 Aetna Inc AET 27.52 320 Embarq Corp EQ 9.32 420 Equifax Inc EFX 5.27

21 Hewlett-Packard Co HPQ 129.34 121 AFLAC Inc AFL 27.41 321 VF Corp VFC 9.29 421 CenterPnt Energy Ord Shs CNP 5.23

22 Verizon Communications IncVZ 125.71 122 Northrop Corp Ord Shs NOC 27.32 322 Cooper Industries Ltd CBE 9.27 422 Robert Half International IncRHI 5.12

23 SCHLUMBERGER SLB 124.92 123 Raytheon Co RTN 27.17 323 Xcel Energy Ord Shs XEL 9.20 423 Constellation Ord Shs STZ 5.11

24 Wells Fargo & Co WFC 124.31 124 Costco Wholesale Corp COST 27.07 324 Mattel Inc MAT 9.20 424 Dow Jones Ord Shs DJ 5.11

25 Apple Inc AAPL 122.55 125 Charles Schwab Corp SCHW 26.80 325 CH Robinson Worldwide Inc CHRW 9.18 425 Jabil Circuit Inc JBL 5.04

26 Pepsico Inc PEP 114.53 126 Celgene Corp CELG 26.52 326 Sunoco Inc SUN 9.16 426 LSI Corp LSI 5.00

27 MERCK AND CO INC MRK 109.69 127 Viacom Class B Ord Shs VIA.B 26.50 327 Brown Forman Class B Ord Shs BF.B 9.13 427 Molex Ord Shs MOLX 4.94

28 Oracle Corp ORCL 106.10 128 State Street Corp STT 26.11 328 Sherwin-Williams Co SHW 9.03 428 Affiliated Computer Services IncACS 4.92

29 Wachovia Corp Ord Shs WB 98.09 129 Adobe Systems Inc ADBE 25.72 329 Sovereign Banc Ord Shs SOV 8.94 429 CenturyTel Ord Shs CTL 4.92

30 Abbott Laboratories ABT 82.84 130 FPL Group Inc FPL 25.53 330 Nabors Industries Ltd NBR 8.90 430 Janus Capital Group Inc JNS 4.85

31 Goldman Sachs Ord Shs GS 81.33 131 Praxair Inc PX 25.48 331 Unum Group Ord Shs UNM 8.85 431 Interpublic Group Ord Shs IPG 4.82

32 United Parcel Service Inc UPS 79.55 132 First Data Corp FDC 25.43 332 C.R. Bard Inc BCR 8.85 432 D R Horton Inc DHI 4.82

33 UNITED TECHNOLOGIE UTX 77.52 133 Danaher Corp DHR 25.20 333 Fidelity National Information Services IncFIS 8.70 433 Allied Waste Ind Ord Shs AW 4.77

34 Comcast Class A Ord Shs CMCSA 77.27 134 Loews Corp Ord Shs LTR 25.10 334 Allegheny Energy Inc AYE 8.69 434 Varian Medical Systems Inc VAR 4.76

35 Boeing Ord Shs BA 77.17 135 Thermo Fisher Scientific IncTMO 24.53 335 Questar Corp STR 8.63 435 Manor Care Inc HCR 4.74

36 Morgan Stanley Ord Shs MS 72.11 136 PNC Finl Service Ord Shs PNC 24.49 336 NCR Corp Ord Shs NCR 8.63 436 Stanley Works Ord Shs SWK 4.69

37 American Express Co AXP 71.92 137 Anadarko Petroleum Ord ShsAPC 24.30 337 Genuine Parts Co GPC 8.58 437 Citizens Comms Ord Shs CZN 4.68

38 Home Depot Inc HD 71.92 138 Medco Health Solutions IncMHS 24.22 338 SUPERVALU INC SVU 8.56 438 McCormick & Co Non-Voting Ord ShsMKC 4.65

39 Time Warner Inc TWX 69.94 139 National Oilwell Varco IncNOV 24.15 339 Limited Brands Inc LTD 8.54 439 Pall Corp PLL 4.63

40 Walt Disney Ord Shs DIS 67.12 140 Automatic Data Processing IncADP 23.94 340 Molson Coors Brewing Ord Shs Non-Voting Class BTAP 8.54 440 Monster Worldwide Inc MNST 4.59

41 News Class A Non-Voting Ord ShsNWS.A 67.07 141 Alltel Ord Shs WI AT 23.92 341 Polo Ralph Lauren Corp RL 8.51 441 International Flavors and Fragrances IncIFF 4.59

42 Qualcomm Inc QCOM 66.63 142 XTO Energy Inc XTO 23.89 342 Comerica Inc CMA 8.48 442 Hasbro Inc HAS 4.54

43 UnitedHealth Group Inc UNH 66.38 143 Duke Energy NYSE Ord ShsDUK 23.84 343 Clorox Co CLX 8.46 443 Pulte Homes Inc PHM 4.38

44 3M Co MMM 65.61 144 Cardinal Health Inc CAH 23.72 344 CONSOL Energy Inc CNX 8.46 444 Tellabs Inc TLAB 4.36

45 MCDONALDS -CORP MCD 65.57 145 CBS Class B Ord Shs CBS 23.64 345 Micron Technology Inc MU 8.45 445 Family Dollar Stores Inc FDO 4.27

46 Merrill Lynch Ord Shs MER 65.16 146 BB&T Corp BBT 23.43 346 Pepsi Bottling Group Inc PBG 8.45 446 Apartment Investment & Management Class A Ord ShsAIV 4.24

47 Eli Lilly and Co LLY 64.81 147 Johnson Controls Inc JCI 22.95 347 Terex Corp TEX 8.41 447 Lennar Corp Ord Shs LEN 4.21

48 Medtronic Inc MDT 62.79 148 Public Srvce Ent Ord Shs PEG 22.77 348 Altera Corp ALTR 8.40 448 Sealed Air Corp SEE 4.18

49 Dell Inc DELL 61.56 149 Regions Financial Corp RF 22.62 349 DTE Energy Co DTE 8.36 449 Millipore Corp MIL 4.17

50 Wyeth Ord Shs WYE 61.45 150 Weatherford International IncWFT 22.51 350 AmerisourceBergen Ord Shs ABC 8.29 450 Rowan Companies Inc RDC 4.09

51 Fannie Mae Ord Shs FNM 60.88 151 Best BUY Co Inc BBY 22.49 351 Goodrich Corp Ord Shs GR 8.27 451 Federated Investors, Inc FII 4.09

52 Amgen Inc AMGN 60.87 152 Kellogg Co K 22.32 352 Verisign Ord Shs VRSN 8.26 452 Pinnacle West Capital Corp PNW 4.04

53 US Bancorp Ord Shs USB 58.04 153 Simon Property Ord Shs SPG 22.28 353 Vulcan Materials Co VMC 8.20 453 Ashland Inc ASH 3.95

54 Bristol Myers Ord Shs BMY 57.18 154 Tyco International Ord ShsTYC 22.12 354 Newell Rubbermaid Inc NWL 8.13 454 Integrys Energy Group Inc TEG 3.94

55 Target Corp TGT 56.96 155 Paccar Inc PCAR 21.86 355 Hudson City Bancorp Inc HCBK 8.12 455 First Horizon National Corp FHN 3.88

56 CVS Caremark Corp CVS 56.27 156 Covidien Ltd COV 21.21 356 IAC/InterActive Ord Shs IACI 8.08 456 Mylan Labs Ord Shs MYL 3.88

57 Kraft Foods Inc KFT 54.22 157 Hess Corp HES 20.99 357 Estee Lauder Ord Shs Class A EL 8.06 457 Autonation Inc AN 3.85

58 Occidental Petroleum Corp OXY 52.98 158 Entergy Corp Ord Shs ETR 20.94 358 Microchip Technology Inc MCHP 8.05 458 CMS Energy Corp Ord Shs CMS 3.68

59 Bank of New York Mellon Ord ShsBK 52.03 159 Archer-Daniels-Midland CoADM 20.88 359 ENSCO International Inc ESV 8.05 459 Pactiv Corp PTV 3.68

60 eBay Inc EBAY 51.72 160 Chubb Corp CB 20.83 360 Fiserv Inc FISV 8.02 460 Solectron Corp Ord Shs SLR 3.66

61 Exelon Corp EXC 51.72 161 Starbucks Corp SBUX 20.77 361 Eastman Kodak Ord Shs EK 8.00 461 Lexmark International Inc LXK 3.54

62 Sprint Nextel Corp S 50.95 162 Newmont Mining Ord Shs NEM 20.77 362 BJ Services Co BJS 7.96 462 Bausch & Lomb Ord Shs BOL 3.53

63 MetLife Ord Shs MET 50.91 163 Sysco Corp SYY 20.71 363 Xilinx Ord Shs XLNX 7.92 463 Centex Corp CTX 3.51

64 Texas Instruments Inc TXN 49.65 164 Norfolk Southern Corp NSC 20.55 364 UST Inc UST 7.89 464 Liz Claiborne Inc LIZ 3.47

65 Caterpillar Ord Shs CAT 49.51 165 Sun Microsystems Inc JAVA 20.45 365 Plum Creek Timber Co Inc PCL 7.81 465 Leggett & Platt Inc LEG 3.45

66 WellPoint Inc WLP 48.42 166 GM Ord Shs GM 20.24 366 CIT Group Ord Shs CIT 7.79 466 Dean Foods Co DF 3.44

67 Lowe's Companies Inc LOW 47.15 167 Williams Companies Inc WMB 20.20 367 MBIA Ord Shs MBI 7.78 467 PerkinElmer Inc PKI 3.39

68 Schering-Plough Ord Shs SGP 46.21 168 Boston Scientific Corp BSX 20.12 368 Avaya Inc AV 7.77 468 Novellus Systems Inc NVLS 3.38

69 Walgreen Co WAG 45.91 169 Kroger Co KR 20.01 369 Linear Technology Corp LLTC 7.76 469 TECO Energy Inc TE 3.35

70 E I Du Pont Ord Shs DD 45.38 170 Air Products and Chemicals IncAPD 20.00 370 Zions Bancorp Ord Shs ZION 7.75 470 Tribune Ord Shs TRB 3.28

71 Prudential Finl Ord Shs PRU 43.89 171 SLM Ord Shs SLM 19.64 371 Cincinnati Financial Corp CINF 7.70 471 Watson Pharmaceuticals IncWPI 3.26

72 Honeywell International Inc HON 42.87 172 Waste Management Inc WMI 19.63 372 RR Donnelley & Sons Co RRD 7.64 472 Ciena Corp CIEN 3.25

73 Monsanto Co MON 42.48 173 Fifth Third Bancorp FITB 19.61 373 Commerce Bancorp Inc CBH 7.62 473 RadioShack Corp RSH 3.16

74 Lockheed Martin Corp LMT 42.20 174 Broadcom Class A Ord ShsBRCM 19.58 374 Dynegy Ord Shs Class A DYN 7.61 474 Big Lots Inc BIG 3.15

75 DOW CHEMICAL DOW 41.46 175 Zimmer Holdings Inc ZMH 19.45 375 WW Grainger Inc GWW 7.57 475 Ryder System Inc R 3.13

76 EMC Corp EMC 40.34 176 FirstEnergy Corp FE 19.43 376 AutoZone Inc AZO 7.46 476 JDS Uniphase Corp JDSU 3.12

77 Emerson Electric Co EMR 39.75 177 Sears Holdings Corp SHLD 19.43 377 Whirlpool Corp WHR 7.38 477 King Pharmaceuticals Inc KG 3.04

78 Motorola Inc MOT 39.52 178 Ace Ord Shs ACE 19.42 378 Tiffany & Co TIF 7.38 478 Wendys International Inc WEN 3.01

79 Freeport McMoRan Copper & Gold Ord ShsFCX 39.43 179 Becton Dickinson & Co BDX 19.29 379 Advanced Micro Devices Inc AMD 7.35 479 Bemis Co Inc BMS 3.01

80 Marathon Oil Ord Shs MRO 39.32 180 Biogen Idec Inc BIIB 19.23 380 American Capital Strategies LtdACAS 7.32 480 New York Times Ord Shs NYT 2.89

81 Carnival Corp CCL 39.09 181 NVIDIA Corp NVDA 19.21 381 Harman International Industries IncHAR 7.31 481 Snap-on Inc SNA 2.81

82 Valero Energy Ord Shs VLO 38.88 182 General Mills Inc GIS 19.11 382 Amer Standard Ord Shs ASD 7.28 482 MGIC Investment Corp MTG 2.74

83 Freddie Mac Ord Shs FRE 38.70 183 Precision Castparts Corp PCP 19.11 383 Abercrombie & Fitch Co ANF 7.19 483 Meredith Ord Shs MDP 2.73

84 Corning Inc GLW 37.92 184 Allergan Inc AGN 19.03 384 EW Scripps Co SSP 7.11 484 Teradyne Inc TER 2.66

85 Anheuser-Busch Companies IncBUD 37.78 185 Kohl's Corp KSS 18.94 385 Citrix Systems Inc CTXS 7.01 485 Novell Inc NOVL 2.62

86 Amazon.com Inc AMZN 36.69 186 PPL Corp PPL 18.84 386 Developers Diversified Realty Ord ShsDDR 6.89 486 KB Home KBH 2.61

87 Devon Energy Ord Shs DVN 36.57 187 Reynolds American Inc RAI 18.74 387 H&R Block Inc HRB 6.89 487 OfficeMax Inc OMX 2.48

88 Gilead Sciences Inc GILD 35.69 188 Juniper Networks Inc JNPR 18.73 388 National Semiconductor Corp NSM 6.86 488 Tektronix Ord Shs TEK 2.43

89 Baxter International Ord ShsBAX 35.69 189 Clear Channel Communications IncCCU 18.73 389 Windstream Corp WIN 6.83 489 Unisys Ord Shs UIS 2.42

90 COLGATE PALMOLIVE CL 35.24 190 Edison International EIX 18.41 390 Waters Corp WAT 6.64 490 Hercules Inc HPC 2.40

91 Lehman Brothers Holdings Ord ShsLEH 34.14 191 American Electric Power Co IncAEP 18.24 391 AMBAC Finl Group Ord Shs ABK 6.62 491 Compuware Corp CPWR 2.34

92 Travelers Companies Inc TRV 34.02 192 CSX Corp CSX 18.13 392 Huntington Bancshares Inc HBAN 6.61 492 Jones Apparel Group Inc JNY 2.32

93 Fedex Corp FDX 33.69 193 Hilton Hotels Corp HLT 18.09 393 Tyson Foods Class A Ord Shs TSN 6.47 493 Convergys Corp CVG 2.24

94 Yahoo! Inc YHOO 33.57 194 EOG Resources Inc EOG 18.08 394 BMC Software Inc BMC 6.26 494 Brunswick Corp BC 1.98

95 Halliburton Ord Shs HAL 33.48 195 Coach Inc COH 17.85 395 Whole Foods Market Inc WFMI 6.25 495 Nicor Ord Shs GAS 1.92

96 General Dynamics Corp GD 33.22 196 Lincoln National Ord Shs LNC 17.77 396 Assurant Inc AIZ 6.23 496 QLogic Corp QLGC 1.89

97 Washington Mut Ord Shs WM 32.86 197 FORD MOTOR F 17.68 397 CB Richard Ellis Group Inc CBG 6.23 497 Circuit City Stores Inc CC 1.76

98 Allstate Corp ALL 32.71 198 McGraw-Hill Companies IncMHP 17.66 398 Applied Biosystems Inc ABI 6.23 498 Health Management Associates IncHMA 1.74

99 ALCOA Ord Shs AA 32.61 199 Nucor Corp NUE 17.64 399 Hospira Inc HSP 6.22 499 Dillard's Inc DDS 1.72

100 Deere & Co DE 32.36 200 YUM! BRANDS INC YUM 17.39 400 Darden Restaurants Inc DRI 6.21 500 Tenet Healthcare Corp THC 1.58

S&P 500 (October 2007) $ Billions

(8) Companies with a Market Capitalization of at least $2 billion (Valueline Database)

Company Ticker Market Cap Company Ticker Market Cap Company Ticker Market Cap Company Ticker Market Cap

$ (Mil) $ (Mil) $ (Mil) $ (Mil)

1 Exxon Mobil Corp. XOM 403,834 51 Anheuser-Busch BUD 47,248 101 Schwab (Charles) SCHW 27,518 151 Becton, Dickinson BDX 19,597

2 Gen'l Electric GE 246,612 52 Home Depot HD 45,788 102 PNC Financial Serv. PNC 27,334 152 SunTrust Banks STI 19,462

3 Wal-Mart Stores WMT 241,861 53 Lockheed Martin LMT 45,113 103 Kimberly-Clark KMB 26,941 153 Weatherford Int'l WFT 19,147

4 Microsoft Corp. MSFT 231,154 54 MetLife Inc. MET 44,694 104 MasterCard Inc. MA 26,925 154 National Oilwell VarcoNOV 18,779

5 Procter & Gamble PG 216,262 55 Amer. Express AXP 43,717 105 Deere & Co. DE 26,483 155 Express Scripts 'A' ESRX 18,524

6 Berkshire Hathaway BRK/A 206,000 56 Devon Energy DVN 43,552 106 Stryker Corp. SYK 26,125 156 Yum! Brands YUM 18,511

7 Johnson & Johnson JNJ 198,350 57 Gilead Sciences GILD 43,520 107 XTO Energy XTO 26,019 157 Aetna Inc. AET 18,490

8 Royal Dutch Shell 'A' RDS/A 181,562 58 Boeing BA 43,200 108 Norfolk Southern NSC 25,934 158 Western Union WU 18,413

9 AT&T Inc. T 171,369 59 Goldman Sachs GS 42,630 109 Praxair Inc. PX 25,879 159 Cardinal Health CAH 18,263

10 Chevron Corp. CVX 170,275 60 Exelon Corp. EXC 42,036 110 Freep't-McMoRan C&GFCX 25,720 160 Hartford Fin'l Svcs. HIG 18,026

11 Int'l Business Mach. IBM 155,969 61 Target Corp. TGT 41,925 111 EMC Corp. EMC 25,695 161 Newmont Mining NEM 18,013

12 JPMorgan Chase JPM 138,471 62 Altria Group MO 41,644 112 Allstate Corp. ALL 25,567 162 Sprint Nextel Corp. S 17,917

13 Google, Inc. GOOG 137,982 63 News Corp. NWS 41,640 113 State Street Corp. STT 25,445 163 First Solar, Inc. FSLR 17,879

14 Bank of America BAC 136,171 64 Baxter Int'l Inc. BAX 41,492 114 WellPoint, Inc. WLP 25,141 164 Public Serv. EnterprisePEG 17,502

15 Cisco Systems CSCO 134,794 65 Du Pont DD 41,445 115 Corning Inc. GLW 25,026 165 Kroger Co. KR 17,487

16 Coca-Cola KO 123,331 66 Bristol-Myers Squibb BMY 41,276 116 Morgan Stanley MS 25,005 166 Allergan, Inc. AGN 17,373

17 Wells Fargo WFC 122,543 67 Caterpillar Inc. CAT 39,761 117 Anadarko Petroleum APC 24,932 167 Staples, Inc. SPLS 17,332

18 Pfizer, Inc. PFE 121,271 68 Colgate-Palmolive CL 38,881 118 Raytheon Co. RTN 24,902 168 Marsh & McLennan MMC 17,050

19 Apple Inc. AAPL 118,770 69 Apache Corp. APA 37,857 119 Time Warner Cable TWC 24,757 169 Avon Products AVP 17,036

20 Hewlett-Packard HPQ 115,304 70 Union Pacific UNP 37,772 120 Medco Health SolutionsMHS 24,515 170 Best Buy Co. BBY 17,025

21 PepsiCo, Inc. PEP 115,044 71 Mosaic Company MOS 37,614 121 Danaher Corp. DHR 24,431 171 Valero Energy VLO 16,885

22 ConocoPhillips COP 109,821 72 Bank of New York MellonBK 36,961 122 Illinois Tool Works ITW 24,265 172 Waste Management WMI 16,710

23 Intel Corp. INTC 108,626 73 Prudential Fin'l PRU 36,909 123 Dominion Resources D 24,259 173 Northern Trust Corp.NTRS 16,678

24 Philip Morris Int'l PM 103,522 74 Transocean Inc. RIG 36,623 124 Thermo Fisher Sci. TMO 23,578 174 Entergy Corp. ETR 16,644

25 Schlumberger Ltd. SLB 99,135 75 Lowe's Cos. LOW 35,238 125 Gen'l Mills GIS 23,510 175 Symantec Corp. SYMC 16,251

26 Oracle Corp. ORCL 96,563 76 Burlington Northern BNI 34,105 126 Duke Energy DUK 23,509 176 Air Products & Chem.APD 16,178

27 Genentech Inc. DNA 95,747 77 Dell Inc. DELL 33,810 127 CSX Corp. CSX 23,077 177 Viacom Inc. 'B' VIA/B 16,106

28 Verizon Communic. VZ 92,808 78 Emerson Electric EMR 33,540 128 EOG Resources EOG 23,016 178 Motorola, Inc. MOT 16,084

29 Citigroup Inc. C 90,666 79 Gen'l Dynamics GD 33,306 129 Automatic Data Proc.ADP 22,568 179 Brookfield Asset Mgmt.BAM 15,682

30 Abbott Labs. ABT 89,687 80 Dow Chemical DOW 33,132 130 Northrop Grumman NOC 21,934 180 Kohl's Corp. KSS 15,554

31 Qualcomm Inc. QCOM 76,588 81 Honeywell Int'l HON 32,785 131 Franklin Resources BEN 21,908 181 Heinz (H.J.) HNZ 15,534

32 McDonald's Corp. MCD 71,934 82 Amazon.com AMZN 32,589 132 Merrill Lynch & Co. MER 21,737 182 Vornado R'lty Trust VNO 15,530

33 Merck & Co. MRK 68,409 83 UnitedHealth Group UNH 32,548 133 Wrigley (Wm.) Jr. WWY 21,657 183 PACCAR Inc. PCAR 15,457

34 United Parcel Serv. UPS 67,078 84 Walgreen Co. WAG 32,508 134 BB&T Corp. BBT 21,604 184 Amer. Tower 'A' AMT 15,452

35 U.S. Bancorp USB 64,017 85 NIKE, Inc. 'B' NKE 31,848 135 Genzyme Corp. GENZ 21,597 185 Zimmer Holdings ZMH 15,426

36 Amgen AMGN 63,409 86 Wachovia Corp. WB 30,972 136 Kellogg K 21,580 186 Price (T. Rowe) GroupTROW 15,391

37 Disney (Walt) DIS 62,523 87 Travelers Cos. TRV 30,831 137 FPL Group FPL 21,503 187 Spectra Energy SE 15,320

38 Monsanto Co. MON 61,914 88 Aflac Inc. AFL 30,525 138 Applied Materials AMAT 21,373 188 McKesson Corp. MCK 15,250

39 United Technologies UTX 60,263 89 Southern Co. SO 30,422 139 Chubb Corp. CB 21,198 189 St. Jude Medical STJ 15,228

40 Medtronic, Inc. MDT 59,529 90 Halliburton Co. HAL 30,353 140 Loews Corp. L 21,188 190 Diamond Offshore DO 14,594

41 Comcast Corp. CMCSK 59,414 91 Schering-Plough SGP 29,911 141 Alcoa Inc. AA 21,043 191 Peabody Energy BTU 14,502

42 Occidental Petroleum OXY 57,972 92 eBay Inc. EBAY 29,908 142 Chesapeake Energy CHK 21,031 192 Williams Cos. WMB 14,394

43 Visa Inc. V 51,853 93 Texas Instruments TXN 29,822 143 Adobe Systems ADBE 21,022 193 Nucor Corp. NUE 14,392

44 CVS Caremark Corp. CVS 51,837 94 Costco Wholesale COST 29,684 144 Sysco Corp. SYY 20,481 194 Amer. Elec. Power AEP 14,372

45 Lilly (Eli) LLY 51,640 95 Celgene Corp. CELG 29,222 145 FirstEnergy Corp. FE 20,296 195 PG&E Corp. PCG 14,367

46 Wyeth WYE 51,257 96 Yahoo! Inc. YHOO 28,838 146 Capital One Fin'l COF 20,287 196 Reynolds American RAI 14,338

47 Kraft Foods KFT 51,221 97 FedEx Corp. FDX 28,341 147 Boston Scientific BSX 20,233 197 Campbell Soup CPB 14,199

48 Manulife Fin'l MFC 50,043 98 Marathon Oil Corp. MRO 28,188 148 Baker Hughes BHI 20,003 198 Rohm and Haas ROH 14,086

49 Time Warner TWX 49,969 99 DIRECTV Group (The)DTV 28,102 149 Johnson Controls JCI 19,690 199 Juniper Networks JNPR 14,085

50 3M Company MMM 49,279 100 Hess Corp. HES 27,527 150 CME Group CME 19,626 200 Electronic Arts ERTS 13,969 Company Ticker Market Cap Company Ticker Market Cap Company Ticker Market Cap Company Ticker Market Cap

$ (Mil) $ (Mil) $ (Mil) $ (Mil)

201 Archer Daniels Midl'd ADM 13,870 251 Broadcom Corp. 'A' BRCM 10,445 301 Laboratory Corp. LH 8,186 351 Gen'l Motors GM 6,454

202 TJX Companies TJX 13,811 252 CIGNA Corp. CI 10,440 302 AutoZone Inc. AZO 8,135 352 Computer Sciences CSC 6,449

203 Biogen Idec Inc. BIIB 13,683 253 Fluor Corp. FLR 10,393 303 Analog Devices ADI 8,098 353 Flextronics Int'l FLEX 6,410

204 Lincoln Nat'l Corp. LNC 13,479 254 CONSOL Energy CNX 10,313 304 AES Corp. AES 8,084 354 NRG Energy NRG 6,397

205 PPL Corp. PPL 13,474 255 Enterprise Products EPD 10,268 305 Fastenal Co. FAST 8,068 355 Starwood Hotels HOT 6,388

206 Kinder Morgan Energy KMP 13,311 256 Regions Financial RF 10,143 306 Textron, Inc. TXT 7,960 356 Whirlpool Corp. WHR 6,364

207 Gap (The), Inc. GPS 13,234 257 AllianceBernstein Hldg.AB 10,093 307 Block (H&R) HRB 7,874 357 Embarq Corp. EQ 6,316

208 Aon Corp. AOC 13,187 258 UST Inc. UST 10,080 308 Rockwell Collins COL 7,848 358 Harris Corp. HRS 6,304

209 Las Vegas Sands LVS 13,113 259 Noble Energy NBL 10,037 309 Garmin Ltd. GRMN 7,733 359 GameStop Corp. GME 6,299

210 Edison Int'l EIX 13,039 260 Lauder (Estee) EL 10,033 310 Range Resources Corp.RRC 7,668 360 Hospira Inc. HSP 6,290

211 Sears Holdings SHLD 12,978 261 Wynn Resorts WYNN 9,985 311 Amphenol Corp. APH 7,634 361 Allegheny Energy AYE 6,249

212 Omnicom Group OMC 12,975 262 Harley-Davidson HOG 9,959 312 Cablevision Sys. 'A' CVC 7,540 362 AmerisourceBergen ABC 6,236

213 Public Storage PSA 12,852 263 M&T Bank Corp. MTB 9,928 313 Autodesk, Inc. ADSK 7,527 363 CF Industries CF 6,233

214 McGraw-Hill MHP 12,777 264 Bard (C.R.) BCR 9,821 314 Varian Medical Sys. VAR 7,494 364 Qwest Communic. Q 6,229

215 Sempra Energy SRE 12,728 265 Intuit Inc. INTU 9,764 315 Questar Corp. STR 7,494 365 BJ Services BJS 6,196

216 Consol. Edison ED 12,517 266 Coach Inc. COH 9,731 316 Cooper Inds. CBE 7,447 366 Safeco Corp. SAF 6,109

217 Murphy Oil Corp. MUR 12,397 267 Hershey Co. HSY 9,700 317 Pitney Bowes PBI 7,446 367 Sun Microsystems JAVA 6,099

218 L-3 Communic. LLL 12,368 268 Marriott Int'l MAR 9,646 318 CNA Fin'l CNA 7,333 368 BMC Software BMC 6,097

219 Smith Int'l Inc. SII 12,317 269 Apollo Group `A' APOL 9,630 319 Jacobs Engineering JEC 7,246 369 NVIDIA Corp. NVDA 6,061

220 Precision Castparts PCP 12,284 270 ConAgra Foods CAG 9,601 320 Nordstrom, Inc. JWN 7,231 370 Applied Biosystems ABI 6,030

221 Ecolab Inc. ECL 12,212 271 Plum Creek Timber PCL 9,582 321 Sherwin-Williams SHW 7,209 371 Marshall & Ilsley MI 5,962

222 Weyerhaeuser Co. WY 12,111 272 C.H. Robinson CHRW 9,534 322 Barr Pharmac. BRL 7,147 372 Republic Services RSG 5,953

223 Ford Motor F 11,838 273 Parker-Hannifin PH 9,499 323 Humana Inc. HUM 7,114 373 Pioneer Natural Res. PXD 5,932

224 Starbucks Corp. SBUX 11,755 274 Xcel Energy Inc. XEL 9,377 324 Cleveland-Cliffs CLF 7,103 374 Covance Inc. CVD 5,923

225 Noble Corp. NE 11,673 275 Liberty Global LBTYA 9,360 325 Nationwide Fin'l NFS 7,097 375 Urban Outfitters URBN 5,919

226 Int'l Paper IP 11,664 276 El Paso Corp. EP 9,345 326 McDermott Int'l MDR 7,075 376 Dentsply Int'l XRAY 5,860

227 TD Ameritrade Holding AMTD 11,617 277 Sara Lee Corp. SLE 9,168 327 Polo Ralph Lauren `A R̀L 7,048 377 KLA-Tencor KLAC 5,853

228 Paychex, Inc. PAYX 11,564 278 Fortune Brands FO 9,039 328 Cognizant TechnologyCTSH 7,033 378 DaVita Inc. DVA 5,842

229 Dish Network 'A' DISH 11,457 279 Crown Castle Int'l CCI 9,028 329 Discover Fin'l Svcs. DFS 7,032 379 Goodrich Corp. GR 5,796

230 CBS Corp. 'B' CBS 11,451 280 MGM Mirage MGM 8,981 330 SunPower Corp. SPWR 6,978 380 SLM Corporation SLM 5,758

231 Progress Energy PGN 11,440 281 Brown-Forman 'B' BF/B 8,954 331 Linear Technology LLTC 6,957 381 Metro PCS Communic.PCS 5,665

232 Southwest Airlines LUV 11,435 282 Moody's Corp. MCO 8,919 332 Scripps Networks SNI 6,869 382 Sovereign Bancorp SOV 5,632

233 Progressive (Ohio) PGR 11,375 283 V.F. Corp. VFC 8,834 333 DTE Energy DTE 6,858 383 Microchip TechnologyMCHP 5,617

234 Eaton Corp. ETN 11,285 284 Clorox Co. CLX 8,781 334 MEMC Elec. Mat'ls WFR 6,854 384 Washington Post WPO 5,613

235 Principal Fin'l Group PFG 11,221 285 Vulcan Materials VMC 8,732 335 Grainger (W.W.) GWW 6,796 385 Joy Global JOYG 5,556

236 Agilent Technologies A 11,216 286 Ameren Corp. AEE 8,688 336 Mattel, Inc. MAT 6,745 386 Stericycle Inc. SRCL 5,540

237 Safeway Inc. SWY 11,146 287 Cameron Int'l Corp. CAM 8,687 337 People's United Fin'l PBCT 6,741 387 Comerica Inc. CMA 5,504

238 Southwestern Energy SWN 11,096 288 Penney (J.C.) JCP 8,660 338 Genuine Parts GPC 6,717 388 Waters Corp. WAT 5,493

239 U.S. Steel Corp. X 11,059 289 Ameriprise Fin'l AMP 8,659 339 Amer. Int'l Group AIG 6,714 389 Arch Coal ACI 5,483

240 PPG Inds. PPG 11,047 290 Unum Group UNM 8,640 340 salesforce.com CRM 6,693 390 Int'l Game Tech. IGT 5,478

241 Cummins Inc. CMI 11,029 291 Forest Labs. FRX 8,543 341 Masco Corp. MAS 6,690 391 Amdocs Ltd. DOX 5,463

242 Ingersoll-Rand IR 11,002 292 Coca-Cola EnterprisesCCE 8,537 342 Sigma-Aldrich SIAL 6,680 392 Roper Inds. ROP 5,453

243 Quest Diagnostics DGX 10,973 293 Fifth Third Bancorp FITB 8,492 343 NetApp, Inc. NTAP 6,680 393 McAfee, Inc. MFE 5,430

244 Xerox Corp. XRX 10,964 294 Bunge Ltd. BG 8,484 344 NII Holdings NIHD 6,661 394 Royal Caribbean CruisesRCL 5,385

245 CA, Inc. CA 10,941 295 ENSCO Int'l ESV 8,411 345 Pepsi Bottling Group PBG 6,655 395 IntercontinentalExch. ICE 5,317

246 NYSE Euronext NYX 10,865 296 Macy's Inc. M 8,373 346 Xilinx Inc. XLNX 6,615 396 Torchmark Corp. TMK 5,314

247 VMware, Inc. VMW 10,770 297 Bed Bath & Beyond BBBY 8,292 347 Nasdaq OMX Group NDAQ 6,601 397 Rockwell Automation ROK 5,294

248 ITT Corp. ITT 10,707 298 Fiserv Inc. FISV 8,289 348 New York CommunityNYB 6,555 398 Iron Mountain IRM 5,286

249 Intuitive Surgical ISRG 10,700 299 Expeditors Int'l EXPD 8,230 349 Limited Brands LTD 6,553 399 KeyCorp KEY 5,277

250 Hudson City Bancorp HCBK 10,608 300 Dover Corp. DOV 8,196 350 Altera Corp. ALTR 6,483 400 Legg Mason LM 5,244


$ (Mil) $ (Mil) $ (Mil) $ (Mil)

401 Equitable Resources EQT 5,228 451 Illumina Inc. ILMN 4,584 501 Ryder System R 3,928 551 Crown Holdings CCK 3,568

402 Wisconsin Energy WEC 5,226 452 Hunt (J.B.) JBHT 4,574 502 Goodyear Tire GT 3,923 552 Pinnacle West CapitalPNW 3,567

403 Newell Rubbermaid NWL 5,223 453 Avery Dennison AVY 4,572 503 Integrys Energy TEG 3,921 553 TECO Energy TE 3,563

404 Hasbro, Inc. HAS 5,215 454 AGCO Corp. AG 4,571 504 Cabot Oil & Gas 'A' COG 3,914 554 Manpower Inc. MAN 3,550

405 Donnelley (R.R) & Sons RRD 5,212 455 Ametek, Inc. AME 4,560 505 Janus Capital Group JNS 3,891 555 IDEXX Labs. IDXX 3,540

406 Dun & Bradstreet DNB 5,153 456 Dolby Labs. DLB 4,548 506 Avnet, Inc. AVT 3,857 556 Stanley Works SWK 3,539

407 Hologic, Inc. HOLX 5,152 457 Eastman Kodak EK 4,536 507 Millipore Corp. MIL 3,848 557 FTI Consulting FCN 3,536

408 Pharmac. Product PPDI 5,136 458 Expedia Inc. EXPE 4,535 508 Cerner Corp. CERN 3,846 558 Cullen/Frost Bankers CFR 3,536

409 Cephalon Inc. CEPH 5,133 459 Pepco Holdings POM 4,533 509 Huntington Bancshs.HBAN 3,845 559 ResMed Inc. RMD 3,536

410 Everest Re Group Ltd. RE 5,127 460 FMC Corp. FMC 4,515 510 Abercrombie & Fitch ANF 3,842 560 Donaldson Co. DCI 3,535

411 Flowserve Corp. FLS 5,125 461 Forest Oil FST 4,513 511 MBIA Inc. MBI 3,827 561 Harsco Corp. HSC 3,534

412 Energizer Holdings ENR 5,114 462 Reliant Energy RRI 4,504 512 Transatlantic Hldgs. TRH 3,826 562 Arrow Electronics ARW 3,517

413 McCormick & Co. MKC 5,098 463 Blackstone Group LP BX 4,496 513 National Fuel Gas NFG 3,822 563 Capitol Fed. Fin'l CFFN 3,496

414 Washington Mutual WM 5,081 464 Markel Corp. MKL 4,443 514 Patterson Cos. PDCO 3,821 564 Omnicare, Inc. OCR 3,486

415 Quanta Services PWR 5,079 465 Owens-Illinois OI 4,417 515 Pengrowth Energy PGH 3,814 565 Red Hat, Inc. RHT 3,474

416 Western Digital WDC 5,075 466 Molex Inc. MOLX 4,409 516 ONEOK Inc. OKE 3,811 566 ITT Educational ESI 3,468

417 Windstream Corp. WIN 5,069 467 Berkley (W.R.) WRB 4,398 517 NCR Corp. NCR 3,811 567 Mettler-Toledo Int'l MTD 3,466

418 SanDisk Corp. SNDK 5,060 468 Equifax, Inc. EFX 4,352 518 Interpublic Group IPG 3,807 568 Total System Svcs. TSS 3,461

419 Citrix Sys. CTXS 5,029 469 Telephone & Data TDS 4,351 519 Cypress Semic. CY 3,802 569 Dollar Tree, Inc. DLTR 3,460

420 MDU Resources MDU 5,015 470 Beckman Coulter BEC 4,333 520 Leggett & Platt LEG 3,795 570 Old Republic ORI 3,453

421 ImClone Systems IMCL 4,980 471 Constellation Energy CEG 4,316 521 LSI Corp. LSI 3,787 571 Walter Inds. WLT 3,440

422 Allied Waste AW 4,973 472 Horton D.R. DHI 4,308 522 IHS Inc. IHS 3,778 572 Alliant Techsystems ATK 3,437

423 Schein (Henry) HSIC 4,960 473 BorgWarner BWA 4,276 523 Covanta Holding Corp.CVA 3,774 573 Int'l Flavors & Frag. IFF 3,381

424 Cincinnati Financial CINF 4,957 474 Fortress Investment FIG 4,250 524 Affiliated Managers AMG 3,767 574 Bucyrus Int'l BUCY 3,378

425 Coventry Health Care CVH 4,943 475 National Semic. NSM 4,249 525 Hewitt Associates 'A' HEW 3,766 575 Forest City Enterpr. FCE/A 3,367

426 Ross Stores ROST 4,922 476 Charles River CRL 4,241 526 Pentair, Inc. PNR 3,758 576 priceline.com PCLN 3,366

427 Helmerich & Payne HP 4,918 477 Church & Dwight CHD 4,238 527 SEI Investments SEIC 3,747 577 ChoicePoint Inc. CPS 3,360

428 VeriSign Inc. VRSN 4,917 478 MeadWestvaco MWV 4,234 528 Copart, Inc. CPRT 3,745 578 Itron Inc. ITRI 3,359

429 Newfield Exploration NFX 4,896 479 Pulte Homes PHM 4,198 529 Frontier Communic. FTR 3,741 579 URS Corp. URS 3,356

430 Amer. Capital Ltd. ACAS 4,891 480 NiSource Inc. NI 4,198 530 IMS Health RX 3,705 580 Reliance Steel RS 3,355

431 SPX Corp. SPW 4,875 481 Eaton Vance Corp. EV 4,174 531 Rayonier Inc. RYN 3,703 581 CarMax, Inc. KMX 3,346

432 Cintas Corp. CTAS 4,874 482 Gannett Co. GCI 4,131 532 Rowan Cos. RDC 3,701 582 National City Corp. NCC 3,345

433 FLIR Systems FLIR 4,873 483 Darden Restaurants DRI 4,117 533 Guess Inc. GES 3,699 583 PetSmart, Inc. PETM 3,335

434 Hormel Foods HRL 4,867 484 Alpha Natural Res. ANR 4,113 534 Trimble Nav. Ltd. TRMB 3,691 584 Terex Corp. TEX 3,334

435 Zions Bancorp. ZION 4,862 485 U.S. Cellular USM 4,111 535 Raymond James Fin'l RJF 3,672 585 Energen Corp. EGN 3,328

436 SUPERVALU INC. SVU 4,815 486 Pall Corp. PLL 4,111 536 Advance Auto Parts AAP 3,651 586 Amer. Eagle OutfittersAEO 3,296

437 Sunoco, Inc. SUN 4,797 487 Northeast Utilities NU 4,103 537 Terra Inds. TRA 3,650 587 O'Reilly Automotive ORLY 3,278

438 Energy Transfer ETP 4,796 488 Ball Corp. BLL 4,077 538 Sealed Air SEE 3,645 588 Lamar Advertising LAMR 3,277

439 Affiliated Computer ACS 4,794 489 Allegheny Techn. ATI 4,057 539 Synovus Financial SNV 3,631 589 NVR, Inc. NVR 3,262

440 SCANA Corp. SCG 4,793 490 Lam Research LRCX 4,047 540 Quicksilver Res. KWK 3,629 590 Edwards Lifesciences EW 3,253

441 Martin Marietta MLM 4,793 491 Kansas City South'n KSU 4,017 541 Alliant Energy LNT 3,622 591 Burger King Hldgs. BKC 3,252

442 Constellation Brands STZ 4,786 492 Black & Decker BDK 3,984 542 Global Payments GPN 3,619 592 Brown & Brown BRO 3,250

443 Tiffany & Co. TIF 4,784 493 Family Dollar Stores FDO 3,983 543 Pactiv Corp. PTV 3,611 593 Sonoco Products SON 3,248

444 Mohawk Inds. MHK 4,754 494 Robert Half Int'l RHI 3,978 544 Commerce Bancshs.CBSH 3,611 594 Micron Technology MU 3,242

445 Plains All Amer. Pipe. PAA 4,707 495 Genworth Fin'l GNW 3,962 545 Perrigo Co. PRGO 3,595 595 Amer. Water Works AWK 3,240

446 Petrohawk Energy HK 4,659 496 Toll Brothers TOL 3,962 546 Dean Foods DF 3,595 596 Puget Energy Inc. PSD 3,235

447 Airgas Inc. ARG 4,623 497 CenturyTel Inc. CTL 3,943 547 Invitrogen Corp. IVGN 3,590 597 Lubrizol Corp. LZ 3,230

448 Tyson Foods 'A' TSN 4,609 498 NSTAR NST 3,939 548 Mylan Inc. MYL 3,581 598 AK Steel Holding AKS 3,227

449 Eastman Chemical EMN 4,593 499 Vertex Pharmac. VRTX 3,939 549 BOK Financial BOKF 3,579 599 Advanced Micro Dev.AMD 3,217

450 CenterPoint Energy CNP 4,589 500 DeVry Inc. DV 3,933 550 St. Joe Corp. JOE 3,569 600 Corrections Corp. Amer.CXW 3,190


$ (Mil) $ (Mil) $ (Mil) $ (Mil)

601 Universal Health Sv. `B' UHS 3,184 651 Synopsys, Inc. SNPS 2,849 701 Westar Energy WR 2,510 751 Service Corp. Int'l SCI 2,278

602 CapitalSource CSE 3,170 652 CommScope CTV 2,844 702 Kennametal Inc. KMT 2,508 752 QLogic Corp. QLGC 2,269

603 ANSYS, Inc. ANSS 3,160 653 Bemis Co. BMS 2,832 703 Odyssey Re Hldgs. ORH 2,505 753 Graco Inc. GGG 2,256

604 City National Corp. CYN 3,147 654 Marvel EntertainmentMVL 2,822 704 Hansen Natural Corp.HANS 2,502 754 Spirit AeroSystems SPR 2,250

605 Snap-on Inc. SNA 3,132 655 Ingram Micro 'A' IM 2,818 705 Waste Connections WCN 2,495 755 HLTH Corp. HLTH 2,239

606 MSC Industrial Direct MSM 3,132 656 Whole Foods Market WFMI 2,803 706 Helix Energy SolutionsHLX 2,495 756 Monster Worldwide MNST 2,238

607 Nuance Communic. NUAN 3,124 657 CMS Energy Corp. CMS 2,801 707 Erie Indemnity Co. ERIE 2,489 757 Onyx Pharmac. ONXX 2,222

608 Mercury General MCY 3,120 658 Myriad Genetics MYGN 2,800 708 Dick's Sporting GoodsDKS 2,474 758 Allied Capital Corp. ALD 2,215

609 Owens Corning Inc. OC 3,113 659 UGI Corp. UGI 2,795 709 Wiley (John) & Sons JW/A 2,471 759 Kinetic Concepts KCI 2,213

610 Greif, Inc. GEF 3,103 660 Smucker (J.M.) SJM 2,789 710 Corn Products Int'l CPO 2,466 760 Immucor, Inc. BLUD 2,212

611 Strayer Education STRA 3,083 661 AptarGroup ATR 2,787 711 WABCO Hldgs. WBC 2,465 761 Gartner Inc. IT 2,209

612 Dresser-Rand Group DRC 3,076 662 USG Corp. USG 2,783 712 TEPPCO Partners L.P. TPP 2,462 762 Intersil Corp. 'A' ISIL 2,208

613 DRS Technologies DRS 3,076 663 Autoliv, Inc. ALV 2,778 713 Valmont Inds. VMI 2,451 763 Huntsman Corp. HUN 2,207

614 PerkinElmer Inc. PKI 3,073 664 DreamWorks AnimationDWA 2,774 714 Inverness Med. IMA 2,428 764 Anixter Int'l AXE 2,204

615 Gen-Probe GPRO 3,070 665 CB Richard Ellis CBG 2,769 715 Foundry Networks FDRY 2,427 765 Hercules Inc. HPC 2,202

616 Realty Income Corp. O 3,055 666 Techne Corp. TECH 2,768 716 LKQ Corp. LKQX 2,423 766 Nicor Inc. GAS 2,200

617 CIT Group CIT 3,053 667 Flowers Foods FLO 2,765 717 Aqua America WTR 2,421 767 MICROS Systems MCRS 2,200

618 Assoc. Banc-Corp ASBC 3,051 668 Boardwalk Pipeline BWP 2,747 718 Interactive Data IDC 2,420 768 Polycom, Inc. PLCM 2,193

619 Reinsurance Group RGAA 3,047 669 ITC Holdings ITC 2,740 719 Endo Pharmac. Hldgs.ENDP 2,420 769 New York Times NYT 2,193

620 Community Health CYH 3,047 670 Health Net HNT 2,736 720 Wabtec Corp. WAB 2,417 770 Diebold, Inc. DBD 2,185

621 Leap Wireless LEAP 3,035 671 Federated Investors FII 2,735 721 Gentex Corp. GNTX 2,413 771 Parametric TechnologyPMTC 2,178

622 DST Systems DST 3,031 672 Southern Union SUG 2,728 722 Lennar Corp. LEN 2,412 772 Kirby Corp. KEX 2,152

623 Tidewater Inc. TDW 3,027 673 Bio-Rad Labs. 'A' BIO 2,707 723 United Therapeutics UTHR 2,411 773 Carlisle Cos. CSL 2,152

624 Dynegy, Inc. 'A' DYN 3,025 674 Longs Drug Stores LDG 2,702 724 Energy Conversion ENER 2,391 774 Central European Dist.CEDC 2,151

625 HCC Insurance Hldgs. HCC 3,021 675 Teleflex Inc. TFX 2,679 725 Tesoro Corp. TSO 2,383 775 STERIS Corp. STE 2,145

626 AMR Corp. AMR 3,014 676 PepsiAmericas Inc. PAS 2,677 726 Bruker Corp. BRKR 2,381 776 Warnaco Group WRC 2,139

627 Albemarle Corp. ALB 3,011 677 Alberto-Culver ACV 2,668 727 Manitowoc Co. MTW 2,370 777 Frontier Oil FTO 2,139

628 Weight Watchers WTW 3,001 678 Timken Co. TKR 2,664 728 IAC/InterActiveCorp IACI 2,369 778 Psychiatric Solutions PSYS 2,124

629 Lincoln Elec Hldgs. LECO 2,992 679 Shaw Group SGR 2,658 729 Jabil Circuit JBL 2,369 779 Magellan Midstream MMP 2,117

630 Lexmark Int'l `A' LXK 2,957 680 TCF Financial TCB 2,653 730 Brocade Communic. BRCD 2,361 780 Silgan Holdings SLGN 2,116

631 Alleghany Corp. Y 2,954 681 Gallagher (Arthur J.) AJG 2,640 731 BJ's Wholesale Club BJ 2,353 781 FirstMerit Corp. FMER 2,116

632 Popular Inc. BPOP 2,950 682 Pediatrix Medical PDX 2,631 732 AutoNation, Inc. AN 2,350 782 Sierra Pacific Res. SRP 2,114

633 DPL Inc. DPL 2,949 683 Foot Locker FL 2,624 733 Thomas & Betts TNB 2,349 783 Under Armour UA 2,109

634 Wyndham Worlwide WYN 2,949 684 IDEX Corp. IEX 2,620 734 Lincare Holdings LNCR 2,345 784 Washington Federal WFSL 2,108

635 Bank of Hawaii BOH 2,948 685 VCA Antech WOOF 2,612 735 Piedmont Natural GasPNY 2,331 785 Phillips-Van Heusen PVH 2,102

636 Massey Energy MEE 2,948 686 Big Lots Inc. BIG 2,594 736 Sybase Inc. SY 2,331 786 Teledyne TechnologiesTDY 2,086

637 Brink's (The) Co. BCO 2,942 687 First Horizon NationalFHN 2,584 737 Hawaiian Elec. HE 2,322 787 Concur Techn. CNQR 2,082

638 Amer. Financial Group AFG 2,935 688 OSI Pharmac. OSIP 2,583 738 Hanesbrands, Inc. HBI 2,320 788 Varian SemiconductorVSEA 2,079

639 Tenet Healthcare THC 2,926 689 AECOM Techn. ACM 2,570 739 Commercial Metals CMC 2,315 789 Gardner Denver GDI 2,074

640 SBA Communications SBAC 2,919 690 National InstrumentsNATI 2,563 740 Provident Energy PVX 2,314 790 Novellus Sys. NVLS 2,071

641 OGE Energy OGE 2,895 691 Atmos Energy ATO 2,559 741 Cree, Inc. CREE 2,312 791 Buckeye Partners L.P.BPL 2,068

642 KBR, Inc. KBR 2,894 692 AGL Resources ATG 2,553 742 Curtiss-Wright CW 2,312 792 NOVA Chemicals NCX 2,057

643 ON Semiconductor ONNN 2,881 693 Trinity Inds. TRN 2,551 743 Packaging Corp. PKG 2,311 793 Apollo Investment AINV 2,050

644 Watson Pharmac. WPI 2,881 694 Hanover Insurance THG 2,539 744 Aeropostale ARO 2,311 794 Cytec Inds. CYT 2,045

645 Delta Air Lines DAL 2,872 695 RPM Int'l RPM 2,538 745 Valspar Corp. VAL 2,309 795 Potlatch Corp. PCH 2,042

646 Akamai Technologies AKAM 2,872 696 FactSet Research FDS 2,532 746 Hubbell Inc. 'B' HUB/B 2,303 796 Rollins, Inc. ROL 2,036

647 Smithfield Foods SFD 2,871 697 King Pharmac. KG 2,529 747 RadioShack Corp. RSH 2,300 797 Centex Corp. CTX 2,034

648 Abraxis BioScience ABII 2,859 698 Woodward GovernorWGOV 2,524 748 Con-way Inc. CNW 2,299 798 CLARCOR Inc. CLC 2,033

649 Nalco Hldg. NLC 2,854 699 Brookdale Senior LivingBKD 2,521 749 Encore Acquisition EAC 2,298 799 Cont'l Airlines CAL 2,031

650 Equinix, Inc. EQIX 2,850 700 Compuware Corp. CPWR 2,518 750 Vectren Corp. VVC 2,291 800 Brinker Int'l EAT 2,027

(9) Summary Data 68 Funds Reported Returns, Pre-Tax Returns, & “Take Home Returns”

Assets, Reported Returns, Expenses, Fees, and Before and After Tax Returns for 68 Mutual Funds with more than $10 billion in equity assets and with a 10+ year record

As of Jan 2007:

Domestic Stock Funds with assets

of more than $10 billion(millions) 10-yr Pre-expense Annual Load or Sales(load) Pre-tax Take home 10-yr Return

Fund Assets Return Expense no Load? Fee Return Return S&P 500*American Century Ultra Inv. twcux 14762 5.2 0.99 No Load 0 4.15 3.80

American Funds: 9.81

AMCAP AMCPX 25237 10.9 0.65 Load 5.75 9.56 8.75 9.81

American Balanced ABALX 55880 9.6 0.59 Load 5.75 8.34 7.63 9.81

American Mutual AMRMX 19359 9.4 0.56 Load 5.75 8.17 7.48 9.81

Capital Income Builder CALBX 80853 11.2 0.57 Load 5.75 9.95 9.10 9.81

Fundamental Investors ANCFX 38375 11.1 0.6 Load 5.75 9.81 8.98 9.81

Growth Fund of America AGTHX 161166 12.9 0.62 Load 5.75 11.58 10.60 9.81

Income Fund of America AMECX 76353 10.1 0.53 Load 5.75 8.90 8.14 9.81

Investment Co of America AIVSX 88703 10.4 0.55 Load 5.75 9.17 8.39 9.81

Wash mutual AWSHX 83998 9.7 0.57 Load 5.75 8.46 7.74 9.81

Calamos 9.81

Growth A CVGRX 17491 17.9 1.2 Load 4.75 16.03 14.67 9.81

Davis 9.81

New York Venture NYVTX 42374 10.6 0.87 Load 4.75 9.15 8.37 9.81

Dodge & Cox 9.81

Balanced Group DODBX 27064 11.7 0.53 No Load 0 11.05 10.11 9.81

Stock DODGX 64843 14.1 0.52 No Load 0 13.46 12.32 9.81

Fidelity 9.81

Balanced 22231 10.8 0.63 No Load 0 10.04 9.19 9.81

Blue Chip 20574 5.5 0.62 No Load 0 4.88 4.47 9.81

Contrafund 68771 11 0.88 No Load 0 10.12 9.26 9.81

Diversified Growth 16953 9.7 0.59 No Load 0 9.11 8.34 9.81

Equity Income 29886 9.4 0.67 No Load 0 8.73 7.99 9.81

Equity Income II 11646 9 0.62 No Load 0 8.38 7.67 9.81

Freedom 2010 12062 8.2 0.62 No Load 0 7.58 6.94 9.81

Freedom 2020 16495 8.7 0.7 No Load 0 8.00 7.32 9.81

Freedom 2030 10342 8.7 0.74 No Load 0 7.96 7.28 9.81

Growth and Income 30549 7.1 0.66 No Load 0 6.44 5.89 9.81

Growth co 30110 9.5 0.93 No Load 0 8.57 7.84 9.81

Low Priced 38784 15.5 0.87 No Load 0 14.63 13.39 9.81

Magellan 45959 6.9 0.56 No Load 0 6.34 5.80 9.81

Mid Cap stock 12853 12.8 0.69 No Load 0 12.11 11.08 9.81

Puritan 25512 8.7 0.62 No Load 0 8.08 7.39 9.81

Spartan 500 index 15726 8.1 0.09 No Load 0 8.01 7.33 9.81

Value 17832 12.1 0.71 No Load 0 11.39 10.42 9.81

Franklin 9.81

Income 50978 9.7 0.65 Load 4.25 8.55 7.82 9.81

Mutual Discovery 12315 13.2 1.38 Load 5.75 11.07 10.13 9.81

Mutual Shares 20854 11.5 0.77 No Load 0 10.57 9.67 9.81

Templeton Growth 34578 11 1.05 Load 5.75 9.24 8.45 9.81Harbor 9.81

Capital Appreciation 17643 16.6 1.22 Load 5.5 14.63 13.39 9.81

Janus 9.81

Janus Fund 11496 6.1 0.87 No Load 0 5.23 4.79 9.81

Legg Mason 9.81

Aggressive Growth 10833 14.8 1.21 Load 5.75 12.83 11.74 9.81

Value Trust 20750 12 1.68 No Load 0 10.01 9.16 9.81

Longleaf Partners 9.81

Longleaf 10883 12.7 0.91 No Load 0 11.79 10.79 9.81

Lord Abbett 9.81

Affiliated 20837 12 1.68 No Load 0 10.32 9.44 9.81

Mid Cap Value 10482 14.4 1.08 Load 5.75 12.57 9.81

MFS 9.81

Total Return 11582 8.8 0.91 Load 5.75 7.21 6.60 9.81

Neuberger Berman 9.81

Genesis 10850 14.1 1.04 No Load 0 13.06 11.95 9.81

OakMark 9.81

Equity and Income 11534 13.4 0.9 No Load 0 12.50 11.44 9.81

Oppenheimer 9.81

Main St. 11730 7.5 0.92 Load 5.75 5.92 5.42 9.81

Putnam 9.81

Fund for Growth 15262 7.3 0.86 Load 5.25 5.84 5.34 9.81

Selected 9.81

American 11596 11 0.9 No Load 0 10.10 9.24 9.81

T. Rowe Price 9.81

Equity income 23199 10.1 0.71 No Load 0 9.39 8.59 9.81

Growth 18290 9.2 0.72 No Load 0 8.48 7.76 9.81

Mid cap Growth 15570 11.9 0.8 No Load 0 11.10 10.16 9.81

Van Kampen 9.81

Comstock 19429 12 0.8 Load 5.75 10.50 9.61 9.81

Equity and income 18002 11 0.78 Load 5.75 9.53 8.72 9.81

Growth and income 10211 11.3 0.8 Load 5.74 9.80 8.97 9.81

Vanguard 9.81

500 Index 117740 8.2 0.18 No Load 0 8.02 7.34 9.81

Asset Allocation 12551 9.1 0.39 No Load 0 8.71 7.97 9.81

Energy 10417 16.5 0.28 No Load 0 16.22 14.84 9.81

Growth index 12515 7 0.22 No Load 0 6.78 6.20 9.81

Health Care index 26834 16.4 0.25 No Load 0 16.15 14.78 9.81

Prime Cap 31811 12.6 0.45 No Load 0 12.15 11.12 9.81

Reit Index 11592 14.3 0.21 No Load 0 14.09 12.89 9.81

Small Cap index 13796 10.2 0.23 No Load 0 9.97 9.12 9.81

Star 13789 9.1 0.36 No Load 0 8.74 8.00 9.81

Value Index 10391 9.3 0.21 No Load 0 9.09 8.32 9.81

Wellesley 12597 8.6 2.4 No Load 0 6.20 5.67 9.81

Wellington 45169 9.7 0.35 No Load 0 9.35 8.56 9.81

Windsor II 47436 10.1 0.35 No Load 0 9.75 8.92 9.81

Windsor 23751 9.8 0.37 No Load 0 9.43 8.63 9.81

(10) Summary of (9) Number of Funds 68

Total Assets $2.012 trillion

S&P 500 10 Year Mutual Funds 10 Year

Reported Return Reported Average

10.02 10.72

S&P 500 10 Year Mutual Funds 10 Year

Return after fees Return after Fees

9.81 9.75

S&P 500 10 Year Return Mutual Funds 10 Year Return

after fees and taxes after Fees and taxes

9.71 8.88

Discount from "Reported Average" Discount from "Reported Average"

3% 17%

A. Invest in a no-load index fund with an expense ratio of no more than 0.2%.

B. Invest in a carefully selected fund with the following requirements:

(i) The Money Manager will have a large proportion of their net worth invested in the fund of consideration.

(ii) Assets under management of no more than $10 billion at the time of investment, no load fees, and annual expense no more than 1% unless their average returns are better than 25%.

(iii) An indication that the fund will stop accepting new investors once additional capital is thought to hinder investment returns.

(iv) (With little in the form of a track record) the manager will be considered perfectly sensible and capable of explaining his methods so that a person with no knowledge of the investment process can completely understand his approach.

(v) (With a track record) The manager will have an average 10-year track record of at least a 15% return, with no significant loss in any single year. (Be also careful of any one time single year gain.)

FEW RECOMMENDATIONS

CONTACT:

Matthew C. Pauls

[email protected]

General Partner, Pauls Associates L.P.

Investment Consultant,

Arcstone Capital

investing, purchaing power, & frictional costs

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