July 2006 Issue

All Gone…

Before sitting down to write to you this month, I started to fill out Down Beat‘s annual readers’ poll (of jazz musicians). I jotted
down a couple of names and then paused with concern. As I looked at all the blank slots on my ballot, I realized, they’re all gone. For more years
than I can remember, I had penciled in the Modern Jazz Quartet for jazz combo of the year, Jimmy Smith for Hammond B3 organ, Gerry Mulligan for baritone
sax, Thelonious Monk or Bill Evans for piano, Cannonball Adderley for alto sax, and so on. It’s hard for me to believe that Percy Heath, the last
remaining member of the regal Modern Jazz Quartet, died last year. Connie Kay, M.J.Q.’s drummer of 40 years, passed away in 1994. The stately John
Lewis and the wonderful Milt Jackson have also passed away. Now, the M.J.Q. is no more. So strange to see all the blank spaces on my 2006 Down Beat readers’ poll
ballot. The great jazz musicians I have followed for over four decades are gone. They’re all gone.

Urgency

As I wrote last month, in rather urgent fashion, the same thing is happening in the mutual fund universe. The unique names are going fast. Now, these
special funds are not passing away, as are my much-loved jazz musicians. Rather, these niche funds are closing to new investors, which has the same end
result. The list is dwindling fast—real fast.

Toxic Waste Proliferates

At our family investment management company, only four of our top-nine equity mutual funds are still open to new clients. Let me tell you, this puts
the cat amongst the chickens. Sure, there are thousands of funds available to investors, but most are junk at best and toxic waste at worst. The big
fund groups pile garbage galore on the poor, uninformed individual investor. Performance-crushing front-end sales loads and back-end marketing scabs
(12b-1 marketing fees) proliferate. You don’t want this refuse. But as I’ve written in the past, most mutual funds are sold to investors. Some investors
are adequately informed and capable of making an objective, reasoned selection, but most are at the mercy of the fund group hawkers and buy what they
are sold with little thought.

Mutual Fund Evaporation

Once the larded and loaded is stripped away, what remains is usually fee-laden, closet-indexed, or high-turnover funds of no value to an informed investor.
All of which leads to… not much. This fund evaporation is what is behind my consideration to starting a no-load, low-turnover fund to house a
nice selection of Young Research’s Retirement Compounders stocks. In today’s environment, my ideal equities fund for the investor with good
investment acuity comprises four elements: (1) I want each stock to be a dividend-payer with prospects of a higher dividend tomorrow. (2) I want companies
with locations in any stable country in the world. And for the record, I do not consider either China or Russia stable, desirable places to invest.
(3) I don’t care if a portfolio company is big or small; a nice mix is welcome. (4) I only want companies with leading positions in their industry.
I’m not interested in laggards, start-ups, or turnarounds. I want management teams doing a good job today—I want no part of the “we’ll
get the job done tomorrow.” As Bob Arnott, the erudite editor of the Financial Analysts Journal, likes to say, “Hope is not a strategy.”

And speaking of B.A., in the January/February issue of the F.A.J., Bob goes into great detail as to why
dividends matter. As I have written often, when I invest my own money, I want to get paid today either in dividends or interest. And I want you to confine
your serious investing to dividend- or interest-paying investments. This strategy applies to the conservative, informed investor passionately saving
for a comfortable, worry-free retirement or the already retired among you. I’m not considering the needs of the speculator, opportunity seeker,
or novice here.

$25,000 Minimum Required

A reasonable investment management fee of 0.75% seems right. I like the feel of an opening minimum investment of, say, $25,000. But I would not want
the minimum so high that it excludes children and grandchildren—a vital consideration with so many unique funds closing today.

Close Funds Early

Even though I’m disappointed that so many of the funds I like are closing, I know it is the right thing for them to be doing. I myself would be
quick to close a Retirement Compounders-based fund well before most would even think of closing. In fact, the closing issue would be high on my checklist
of early considerations.

Continue to add to all the funds I have written about regularly this year, as many of these fine funds are now subject to closing or to limiting dollar
contributions without notice.

You Need Disclosure

As you read any strategy report that advises you on how to help secure your future, ask yourself a couple of basic questions: What is the strategy report
writer actually buying for himself? Are the writer’s interests aligned with yours? Does the strategy report writer actually make decisions for
clients, or is he simply airing his views on the world? You need answers. As you know, I have been a long-time participant in full disclosure. You know
what I buy in my own account. You know exactly what I own, what is on my short list to buy in coming quarters, and exactly why I sell that rare position.

I invest my own money in the securities I write about for you. We are on the same team. It is impossible for me to make money without helping you make
money. I give you the option of investing side by side with me.

Investing With Max Heine

You do not hear from me each month regarding my own moves because my transactions are few and far between. I try to limit my holdings to big positions
that I plan to hold for years. For example, I first invested in the Mutual Series funds when Max Heine was running the fund (Mutual Shares).
We’re talking decades ago. I don’t sell a position often. I give a lot of thought to each holding in which I invest. I invest with a long-term
outlook that is beyond the scope of most investors. And rarely do I take the tax bite on a big gain.

Inference Reading Is the Key

My decisions and strategies are based on inference reading. I subscribe to so many publications that my mail comes to me in big tubs. I spend my days
reading—and reading fast. I’m looking for change in trend and dominant themes with legs. I don’t care about this year or next. I’m
looking beyond the horizon and toward themes. I don’t look at quarterly earnings reports, and I don’t make earnings projections. I like companies
that reduce their number of shares outstanding. A note of caution here: Be alert to companies hyping that they are buying in their own stock, when, in
fact, they are simply buying in enough shares to cover option activity. What you want to see is a net decline in the total number of shares outstanding.

Your Cash Flow Friend

I have a great tool for you. I am devoting a fair amount of space here to help you look at a company with some insight through its annual report.

Look past the income statement and balance sheet (in your company’s annual report) and turn to Consolidated Statements of Cash Flows. The top
item will be cash flows from operating activities, followed by a series of items, including depreciation, provision for long-term employee benefits,
and net changes in current assets and current liabilities. You come to net cash provided by operating activities. Here’s where the rubber meets
the road. Jot this number down each quarter.

Where Is the Cash Going?

The next subhead is cash flow from investing activities. Here you will find a short list usually headed with capital expenditures (a mammoth sinkhole
for many mismanaged companies). Jot this number down quarterly and label it “A.” Now on to cash flows from financing activities. Here you
find another short list. Midway through this run you find dividends paid. Jot this number down and label it “B.” Next you will come to purchase
of common stock for treasury. Jot the number down and label it “C.”

Add B to C and take your sum as a percent of the figure you have jotted down for net cash provided by operating activities. This will allow you to see
if your considered company is on your side as an investor, or simply throwing money at activities that may or may not have any value for you. Companies
that generate a lot of cash from operating activities and pay out a constantly big percentage of this cash to shareholders in the form of dividends and
net shareholder buybacks are companies worth looking into for investment.

Dividends and Share Buybacks

Now take A (capital expenditures) as a percent of net cash provided by operating activities. All companies want to invest for the future, but for my
money, I do not like to see capital expenditures overwhelm dividends paid and purchases of common stock for treasury. Companies that value the shareholder
give ample thought to dividends and share buybacks. These companies are not likely to be labeled growth companies. We are looking at value companies
here.

Sleep Well

Please understand that my approach is ultraconservative. Managers of aggressive growth businesses would have disdain for my guidelines, which is fine.
I have no interest in investing retirement-oriented money in these companies. I think you will find my back-of-the-envelope exercise fun as well as useful.
It’s your road map—a way for you to stay on track. If quarter after quarter your considered company is generating more cash from operating
activities, increasing dividends, and buying in more stock for the treasury, you are on the right track.

Calculate the year-to-year percent change for (1) net cash provided, (2) capital expenses, (3) dividends, and (4) purchase of common shares for the
treasury. What should you be looking for on a trend basis? Capital expenditures and share buybacks are volatile. You are looking at a trend here. Cash
provided from operating activities and dividends paid are usually more stable. And you do not require big gains. The U.S. economy, measured by gross
domestic product, grows at about 7% per year in nominal terms (no inflation adjustment). If your considered company can average 7% or more in growth
of year-to-year cash provided and dividends paid, you will have good reason to be contented.

The Empirical Rule

Another vital tool I use in shaping my strategy advice to you each month is the empirical rule of two standard deviations. Stop here and go to www.youngresearch.com under “The
Empirical Rule.” I have laid out a simple summary of the significance of two standard deviations, but the short answer is that, in any normal series
of data, 95.5% of observations fall within two standard deviations of the mean.

Cheap Stocks Now

If consolidated statements of cash flow and the empirical rule are beyond your scope of interest or your investment acuity, you have plenty of company.
You join a club that should stick to mutual funds and eschew individual stocks. And you no doubt would be wise to consider the services of a professional
investment manager. I’m absolutely not referring to certified financial planners or insurance company reps. I’m referring specifically to
an SEC-registered investment advisor.

On the next page, I’m including year-to-year rate of change charts on four stocks that Young Research currently rates as buys: J.M. Smucker (NYSE:
SJM), Johnson & Johnson (NYSE: JNJ), Citigroup (NYSE: C), and Sysco (NYSE: SYY). Upper and lower bands for two standard deviations
are in place. Note that in the case of three of the four—J.M. Smucker, Johnson & Johnson, and Sysco—momentum has become so weak that
the two standard deviations boundary on the downside has been tested recently. This test does not mean that any of the three can’t go lower. Nor
does it mean that an upside move is necessarily in place for any of the three. What can be said is that each stock has been washed out with a vengeance.
In the case of Citigroup, the two standard deviations downside band has not been tested, but the chart has the feel of a recovery off a reasonable low.
Citi may not be the washout that the other three represent, but it looks reasonable. I have added Citigroup and American Express (NYSE: AXP) (both
Dow companies) to my Monster Master List. And I’ve added a new feature to my Monster Master List, which should be helpful to you.

New Star Rating System

There are now two stars next to each of my Top 10 Countdown stocks, and one star next to the remaining names on my Monster Master List that we carry
as buys today. Go to my Top 10 for your initial picks. If you already own each of these names, move on to my single-starred names.

Dividends Since 1982

Most names on the Monster Master List pay dividends. The current yield is listed, as is the year each company initiated its dividend. Many go
back to before you were born, or perhaps even before your parents were born. For example, Coca-Cola (NYSE: KO) has been paying a dividend since
1893 and ExxonMobil (NYSE: XOM) since 1882.

Coming Up: Hurricane Season

If you are perplexed by the environment, volatility, and complexity of today’s financial markets, you have every right to be. It has been a foul
year for many investors. YTD, the NASDAQ is down, and the S&P 500 is ahead by only 1%. Many sectors, such as biotech and computers, have been trashed
and hit hard. It has been tough slogging. And now hurricane season is almost upon us.

As I’ve explained in the past, in most cycles, investors make most of their money in the non-hurricane seasons of the year before and the year
of a presidential election. The historical record is illuminating. If you break the four-year presidential cycle into eight blocks, dividing each year
in half for hurricane season and non-hurricane season, it is astounding how well you will do most often in just two of the eight blocks (each representing
six months). The other six blocks offer much less opportunity for big money gains. With 2006 not a presidential election year or a pre-presidential election
year, we can expect in-and-out results. As history shows, you must be even more defensive and reserved during the hurricane portion of an off-year.

Why Politics Matter

House and Senate elections this fall will help set the tone for the hype of the 2007 pre-election year and the 2008 pre-presidential election year.
When I can tell you that every presidential election year since I graduated from high school in 1959 has been an up year for stocks, you can get a feel
of why politics is so darn important to investors.

So what can you expect today and what surprises are ahead? One simple bit of arithmetic indicates that to win an election, you need more votes than
your opponent can get. And what if you are worried that you may not have enough legitimate votes? Well, how about creating a great big pile of new votes?
Sounds nuts, doesn’t it? Not if you are one Hillary Clinton.

Let the Convicted Felons Vote!

Yes, indeed, that is exactly what Madam Clinton is up to. Check S.450 (Senate), a bill to amend the Help America Vote Act of 2002. The sponsor is listed
as Senator Hillary Rodham Clinton. And who are the co-sponsors? Mr. “Sports Afield” himself, John Kerry, the hard-left Patrick Leahy of Vermont,
and Frank Lautenberg of New Jersey.

Like most bills, this one is loaded with subterfuge, running on and on for 23 items. Buried near the end, at #21, stands “voting rights of individuals
convicted of criminal offenses.” #21 is labeled Sec. 701. We ran down all of 701, and here is the grizzly story: An estimated 4.7 million individuals
in the U.S., or 1 in 44 adults, currently cannot vote as a result of a felony conviction. “Thirteen percent of the African-American adult male
population, or 1.4 million, are disenfranchised. Given current rates of incarceration, 3 in 10 African men in the next generation will be disenfranchised
at some point during their lifetimes.” OK, that is language from Sec. 701.

Any Second Amendment backers here? Let’s see, how many tax cutters and Second Amendment folk do you think you could extract from a roster of convicted
felons? I doubt a single one. What a terrific group to free up at the polls if you are Madam Clinton. After all, when you are breaking into the local
7-Eleven, you sure don’t want the employees inside hunkered down waiting for you armed to the teeth. No siree, no guns allowed. No Second Amendment
rights required.

Hastings Impeached and Removed

Worse yet, a companion bill, H.R. 939, has been referred to a House subcommittee. Among the co-sponsors are Nancy Pelosi, Barney Frank, Ohio wacko Dennis
Kucinich (what a circus when this guy was mayor of Cleveland), and two fellows with whom you may not be familiar, John Conyers and Alcee Hastings. To
enlighten yourself as to the background of these gentlemen, go to time.com/time/columnist/klein for Joe Klein’s piece “Easy Targets
for Karl Rove.” If the Democrats win the House this fall, Mr. Conyers, who has already threatened impeachment hearings for President Bush, will
become chairman of the Judiciary Committee. No joke. Worse yet, the chairman of the House Intelligence Committee will be former Federal Judge Alcee Hastings.
Rep. Hastings, who, according to http://thomas.loc.gov/, is known to many as “Judge” and has distinguished himself as an attorney
and civil rights activist judge. The specifics of Rep. Hastings’ job description may be accurate, but I’m not sure the word distinguished is
on target.

What http://thomas.loc.gov/ does not mention is covered for you in Joe Klein’s piece, in which he writes that Rep. Hastings was indicted
in 1981 for influence peddling, acquitted on all counts, then impeached and removed from his judgeship by Congress. Yet, as Klein writes, “It is
an open secret that Rep. Pelosi has chosen Hastings to replace the respected and experienced Jane Harman as the ranking Democrat on the committee (House
Intelligence).” As Klein rightfully asks, “Why do the Democrats want to put an impeached judge in charge of your national security?”

Israel and Iran

Now you have some background looking to the off-year election this fall and the 2008 presidential election. I’m not necessarily looking at elections
in terms of Democrats versus Republicans, notwithstanding, of course, my strong opposition to the heart and soul of the Democrats’ income redistribution
policies as a core strategy to buy votes. Going forward, the U.S. financial markets are going to look at America’s competitive position on an international
basis. We no longer live in a closed society—like it or not. And #1 and #2 on the list of concerns for the U.S. financial markets will be:
(1) management of the U.S. economy to compete worldwide, and (2) our military strength to defend the country from a multitude of emerging risks that
are building fast.

Next month, I’ll elaborate on China’s aggressive offensive military buildup (they are publicly lying). I’ll also elaborate on how
we must deal with Iran’s Mahmoud Ahmadinejad, “the wild-eyed, anti-Western genocidal zealot,” as Oliver North calls him. Regarding
Israel, M.A. has said, “The occupying regime must be wiped off the map.” It might interest M.A. to know that Israel commands the largest
fleet of F-16 aircraft outside the U.S. and, in fact, after the U.S., Russia, and China, has the largest air force in the world.

Fed Is a Follower

Beyond the tax-cut-induced U.S. economic boom is the issue of the Fed. I’ve written as far back as my days of editing my 50-page monthly institutional
report, Young’s World Money Forecast, that the Fed in reality is a follower. My chart below tracks the 90-day CD rate and the rate on Fed
funds (the Fed’s benchmark rate). You’ll see that while the two track quite directly, the funds rate is a bit of a laggard. In other words,
the Fed is a follower.

Today, the 90-day CD rate is 5.18%, and the Fed funds target rate is 5.00%. At year-end 2005, the two were 4.51% and 4.18%. As long as the 90-day CD
rate advances, the Fed will continue to push up the Fed funds rate. Two charts in my Economic Supplement will also help you. Chart #10 shows that as
long as capacity utilization continues to tighten, as has been the case, the Fed is likely to continue to raise rates. Chart #15 gives the Fed funds
rate deflated by the core CPI. Today’s rate is now above the mean and bordering on restrictive. The Fed has had a steady tendency to overshoot
and kill the Golden Goose. Ben Bernanke, a real smart guy, is keenly aware of all I have just written to you.

Consumption Tax Desired

OK, you know that 2007 is a pre-presidential year, which is regularly the setting for a good run in stock prices. And you know that management of the
economy and our national defense will be #1 and #2 on the minds of the financial markets. Tax cuts, a strong defense, an overhaul of our tax system to
a consumption tax basis, and an equally huge overhaul of our legal system to dump class action suits and punitive damages and move to a “loser
pays attorney fees” system is the textbook story for strong financial markets.

Weak US$ Projected

Six of the big 15 industrial countries run a current account deficit. The U.S. deficit at over $800 billion is far larger than that of the other five
deficit countries combined. And the U.S. has a huge internal budget deficit. The U.S. internal deficit at 3.7% of GDP is also large. Given the above,
I remain negative on the U.S. currency. In the current environment, my #1 and #2 choices against the US$ remain the Swiss franc and the Canadian dollar.
Both Switzerland and Canada run a current account surplus. Canada runs a budget surplus. Switzerland’s budget deficit of 1.6% of GDP is modest.
Swiss inflation runs about 1% and will not pick up much in 2007. Canada’s inflation rate in 2007 will match the U.S. in the 2% to 3% range. No
problem on the inflation front.

Gold Got Too Hot

Gold at $650/oz. is right where it was when I wrote to you last month, after running well over $700/oz. At those levels, gold was way ahead of itself.
My historical strategy has been to take a modest position (relative to my total portfolio) in gold (and other precious metals) and pray the price goes
down, because then everything else I own would go up. This year, U.S. stocks have been not so hot, but precious metals have been real hot (too hot most
recently). Vanguard’s Precious Metals & Mining fund is still up a staggering 28% YTD. Although such a sizable advance is welcome, consider
these gains neither representative nor repeatable. As long as the fundamentals for the US$ remain as weak as they are, gold will prove to be an attractive
counterbalancer. I like the ETF StreetTracks Gold Shares and the open-end American Century Global Gold. If you prefer the metal itself,
my recent issues have given you the information on my favored (and owned) rare one-ounce gold Pandas.

Monster Master List Stocks

This month, I’ve added four new blue-chip names, coincidentally all from the Dow. The four are Citigroup (NYSE: C), United Technologies (NYSE:
UTX), American Express (NYSE: AXP), and Boeing (NYSE: BA). To make room, I’m deleting some names. I don’t add without deleting.
So out go Costco, Golden West (to merge with Wachovia), Kimco, Washington REIT, Weingarten Realty Investors, Restaurant Brands New Zealand, and Smith & Wesson.
No need to sell Costco if it is a favorite. I would take profits in the three REITs, which are now ahead of themselves. My New Zealand stock is hard
to buy for some investors, so it’s an easy deletion. And Smith & Wesson is thinly traded. None is being axed due to specific company problems.

#1 in the World

UTX is comprised of Carrier air conditioners (#1 in the world); Otis Elevator (#1 in the world); Pratt & Whitney jet engines, GE, and Rolls Royce
(the big three); and Flight Systems (Sikorsky helicopters). I rank U.S. big blue-chips with a sizable international exposure as my #1 investment category
in the current environment. UTX is a powerhouse. Buy it.

Boeing’s Dreamliner a Winner

I have not been keen on Boeing due to shaky management, a rotten cost structure, the company’s nasty boom-and-bust cycles, and oppressive competition
from Airbus, the European company supported with government handouts. Today, Boeing seems equipped to avoid past boom/bust cycles. Management, led by
former GE and 3M guy W. James McNerney, is on the ball, and costs have been cut dramatically. More important, big corporate supporters of Airbus are
in a dump-the-stock mood. You may have read about the new Boeing Dreamliner, which should be good to go in 2008 and is in high demand. The proposed Airbus
competitor, the A350, looks like a dog and is probably years behind the Dreamliner. Boeing is on firm footing today. Buy it.

4% Yield at Citi

Citigroup is an international powerhouse available cheap at 10xE and with a high yield of 4%. Buy Citigroup.

American Express caters to the affluent with its Black and Platinum Cards (great international travel services). If you travel outside the U.S., one
of these cards is a must-have. The American Express board recently raised the dividend by 25% and approved the buyback of as much as 16% of its outstanding
shares. We’re looking at a $200 million buyback here. Talk about great fodder for a consolidated statement of cash flows. American Express is gaining
market share in worldwide card lending with really big gains in the U.S.

Summer Blockbuster

Walt Disney (NYSE: DIS), another Dow name I’m hot on and a long-term Monster Master List name, is now on the new highs list. The company
paid a bundle for Pixar, but Disney got John Lasseter, the #1 guy in the U.S. among computer animators. Lasseter is now head of the entire Disney/Pixar
animation studio. Get ready for the potential blockbuster from Disney/Pixar/Lasseter this summer called Cars. Add Disney to the four Dow buys
above.

Royalty Trust Merger

PetroFund (AMEX: PTF), one of the oldest publicly-traded Canadian Royalty Trusts, is to merge into Penn West to form the largest conventional
oil and gas trust in North America. Operations will be conducted under the Penn West name. Stay with Petro­Fund. Many C.R.T.s qualify for the 15%
dividend tax rate. Your 1099 form will tell you, but double check with your accountant as 1099s can be wrong.

Time Warner Real Cheap

Time Warner‘s (NYSE: TWX) discount to its trend line is now back to the levels seen in the early 1990s, and its relationship to the S&P
500 is dead on the bottom. Price and momentum charts indicate that the stock is washed out. We value the shares between $23 and $27, and the stock is
now $17.36/share. Buy Time Warner.

There are three steals from the Monster Master List all below trend and looking washed out in terms of momentum. You can buy DJIA component Johnson & Johnson at
$61/share, J.M. Smucker at $41/share, and Sysco at $30/share.

HSBC and Jardine

HSBC (NYSE: HBC) has been in China for 140 years and has the most extensive branch network of any foreign bank operating in China. Jardine
Matheson (US ADR: JMHLY) no longer deals in opium as it did in the 1700s when “Iron-Headed Old Rat” William Jardine founded the company
along with fellow Scot James Matheson. Today, the Singapore-based conglomerate has its thumbs in many worldwide pies, including its recent 20% stake
in Rothschild Continuation Holdings, parent of the U.K. investment bank. Jardine should only
be purchased in round lots of 400. Odd-lot transactions may incur discounts due to a lack of liquidity. J.M. has raised dividends annually since
2002 and is currently selling at a 2.6% yield. HSBC and Jardine should be at the top of your international portfolio list. You want both.

Lighten Up

The natural resource and real estate stocks have now run well ahead of themselves. Where you are too heavy or have sizable profits, I’d
lighten up across the board. Cut your overall exposure to the group in half. Rather than sell a complete position I like for the long-term, sell half
a position now. I’m not including precious metals, including Vanguard Precious Metals & Mining here. I want these as hedges against the US$
and potential terrorist activity. I also am not including T. Rowe Price New Era fund.

Copper Out of Sight

Copper, probably the most expensive resource play among metals, will fall hard. I took copper
producer Phelps Dodge off the Monster Master List months ago. When the stock once again trades below trend and has negative year-to-year price momentum
approaching two standard deviations,
it will be time to buy and rebuild most of your other natural resources positions.

PepsiCo (NYSE: PEP), long favored and a Top 10 name last month, is on the new highs list. Continue to buy.

Buy Royal Bank of Scotland Preferred

Preferred stocks belong as a major component of your fixed-income array. Hot off the new issue roster is Royal Bank of Scotland, and the stock is eligible
for the favorable dividend tax treatment. The A1/A issues yield about 6.8% and are not callable for five years. Add it to your list with impunity. I’ve
added a new gold stock to the Monster Master List, Goldcorp (NYSE: GG), the low-cost producer.

You can buy three great Black Rock closed-end equity funds on my Monster Master List. Each sells at a discount to NAV. Dividend Achievers sells
at a 13% discount and, with its $0.90/share dividend, yields 6.9%. Global Opportunity and Enhanced Dividend Achievers both boost yield
on the portfolio by selling covered calls. Both are best held in IRAs as income from calls is taxed at your highest earned income tax bracket. Global
Opportunity sells at a 7% discount to NAV and pays $2.28/share to yield 9.6%. Enhanced Dividend Achievers Trust pays $1.22 and yields 9.3% at a 7% discount
to NAV. All three are great buys for you today.

Closed-end Fiduciary Claymore MLP pays $1.25 to yield 6.9%, and sells at a 10% discount to NAV. You get a nice mix of high-yielding energy plays
including Holly Energy Partners, Alliance Resource Partners (NASDAQ: ARLP), and Kinder Morgan Management.

I have not been keen on index funds of late, but in the current environment, I like the Vanguard Index Value Portfolio, with big positions in ExxonMobil,
Citigroup, and GE. The Admiral Shares have a management fee of only 0.11%.

DJIA Well-Positioned

I love the Dow’s positioning currently, and the Dow Diamonds Trust ETF with a management fee of 0.18% fits the bill real well. The #1 and
#2 holdings are 3M and my newly-added Monster Master List name Boeing. Finally, looking at the biggest holdings of each fund in my Monster Master List
universe, there is one fund in the group where I would advise individual purchase of every name on the fund’s top-10 list. The fund is Holland
Balanced Fund, a laggard for a couple of years as blue-chips have been oddly out of favor. The upside of the cycle in interest rates has penalized
the treasuries portion of the portfolio. Over the last couple of years, twitchy investors wrongly bailed out of this ultra-blue-chip fund. Will
they ever learn?

Make it a good month.

Warm regards,

Richard C. Young

P.S. Congratulations to Mayor Ray down in New Orleans. Go to Lou Dolinar’s research on Katrina at realclearpolitics.com. Just as with Iraq,
you once again have been badly misled by the media. As you will read, the Coast Guard and National Guard performed heroically and were on the case in
full force from day #1.

P.P.S. The housing climate is clouding up, but there remain many hot spots. YTD through the first quarter, Phoenix/Scottsdale: +38%, Orlando: +34%,
New Orleans: +23%, Tampa/St. Petersburg: +20%, and Jacksonville: +19%. Remember that in 2008, not only is there the U.S. presidential election (Al Gore
is gaining momentum) and the Olympics in China, but the first wave of 76 million baby boomers will begin retiring in earnest, and they won’t be
heading to International Falls. Next month, I’ll give you some neat stuff on a sleeper in Florida. And it’s low-risk as to hurricane issues.

P.P.S. Go to www.youngresearch.com for my latest essential music postings as well as a detailed, yet easy-to-read primer on two standard deviations.
And, as always, go to my Top 10 Countdown for your first stock picks this month. I’ve already explained that I view the big blue-chips as the way
to go now. And my #1, #2, #3, and #4 names, while not purposefully so, are all Dow 30 names. Next month, much more on the coming blue-chip move.

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