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        <TR>
          <TD class=3Dtopleft width=3D"22%"><A=20
            href=3D"http://www2.business.ku.edu/apm/amp_frontpage"><IMG =
height=3D85=20
            =
src=3D"http://www2.business.ku.edu/apm/newsletter/templates/apm_resources=
/apm_logo.gif"=20
            width=3D108 border=3D0></A></TD>
          <TD class=3Dtopright vAlign=3Dtop align=3Dleft width=3D"78%">
            <P><!-- InstanceBeginEditable name=3D"Date" --><SPAN =
class=3Dtitle1>APM=20
            Quarterly<BR>1st Quarter=20
            2006</SPAN><!-- InstanceEndEditable --><BR><SPAN =
class=3Dheadingsub>a=20
            publication of Applied Portfolio Management, KU School of=20
            Business</SPAN></P></TD></TR></TBODY></TABLE></TD>
    <TD><IMG height=3D85 alt=3D""=20
      =
src=3D"http://www2.business.ku.edu/apm/newsletter/templates/spacer.gif"=20
      width=3D1 border=3D0></TD></TR>
  <TR>
    <TD class=3Dleftpane vAlign=3Dtop align=3Dleft bgColor=3D#ffffff>
      <TABLE width=3D"100%" border=3D0>
        <TBODY>
        <TR>
          <TD class=3Dleftnewsheading>Inside This Issue:</TD></TR>
        <TR><!-- InstanceBeginEditable name=3D"Story List" -->
          <TD class=3Dleftsubheading>
            <UL>
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#hyde">Thomas=20
              Hyde Visit</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#morrison">Jeff=20
              Morrison</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#garmin">Garmin's=20
              Rauckman</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#gmed">Golden=20
              Meditech</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#oplink">Oplink</A>=20

              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#short">Short=20
              Updates</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#harry">Alum=20
              Message</A>=20
              <LI><A title=3D"2005 APM Performance Report"=20
              =
href=3D"http://www2.business.ku.edu/portfolio/2005Performance.pdf"=20
              target=3D_blank>Special 2005 Performance Report</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#donors">Donors</A>=20

              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#alums">Alumni=20
              News </A></LI></UL></TD><!-- InstanceEndEditable --></TR>
        <TR>
          <TD class=3Dleftnewsheading>Links:</TD></TR>
        <TR>
          <TD class=3Dleftsubheading>
            <UL>
              <LI><A href=3D"http://www2.business.ku.edu/apm" =
target=3D_blank>APM=20
              Website</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/portfolio/portfoliotyped.shtml"=20
              target=3D_blank>APM Portfolio</A>=20
              <LI><A class=3Dleftsubheading =
href=3D"http://www.business.ku.edu/"=20
              target=3D_blank>KU Business</A>=20
              <LI><A href=3D"http://www.ku.edu/" target=3D_blank>KU Home =
</A>
              <LI><A href=3D"http://www.ku.edu/home/cshenoy" =
target=3D_blank>Prof.=20
              Shenoy's Homepage</A> </LI></UL></TD></TR></TBODY></TABLE>
    <TD vAlign=3Dtop align=3Dleft bgColor=3D#ffffff>
      <TABLE width=3D"100%" border=3D0>
        <TBODY>
        <TR>
          <TD vAlign=3Dtop align=3Dleft><!-- InstanceBeginEditable =
name=3D"Beginning" -->
            <P class=3DmainHeading>Portfolio Performance Report<SPAN=20
            class=3Dstyle1><A=20
            =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#perform">...more</A></SPAN></P><!-- InstanceEndEditable -->
            <TABLE class=3Dperformancefulltable cellSpacing=3D0 =
width=3D"100%"=20
            bgColor=3D#cccccc border=3D0><!--DWLayoutTable--><!-- =
InstanceBeginEditable name=3D"Performance Table" -->
              <TBODY>
              <TR>
                <TD class=3Dperformancetotal width=3D107>&nbsp;</TD>
                <TD class=3Dperformancetotal width=3D108>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#Performance"><STRONG>Total=20
                  Return YTD</STRONG></A></DIV></TD>
                <TD class=3Dperformancetotal width=3D106>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#Performance"><STRONG>1st=20
                  Q Return</STRONG></A></DIV></TD>
                <TD class=3Dperformancetotal width=3D111>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#Performance"><STRONG>Latest=20
                  4 Quarters</STRONG></A></DIV></TD></TR>
              <TR class=3Dperformancetotal>
                <TD class=3Dperformancetotal><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#Performance"><STRONG>SP500</STRONG></A></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>3.7%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>3.7%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>13.3%</DIV></TD></TR>
              <TR class=3Dperformancetotal>
                <TD class=3Dperformancetotal><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#Performance"><STRONG>SP600</STRONG></A></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>12.6%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>12.6%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>26.7%</DIV></TD></TR>
              <TR class=3Dperformancetotal>
                <TD class=3Dperformancetotal><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#Performance"><STRONG>NASDAQ</STRONG></A></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>6.1%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>6.1%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>21.5%</DIV></TD></TR>
              <TR class=3Dperformancetotal>
                <TD class=3Dperformancetotal><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q1-06/apmnews_q1-06.ht=
m#Performance"><STRONG>APM</STRONG></A></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>5.8%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>5.8%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>38.7%</DIV></TD></TR><!-- =
InstanceEndEditable -->
              <TR>
                <TD height=3D3><IMG height=3D1 alt=3D""=20
                  =
src=3D"http://www2.business.ku.edu/apm/newsletter/templates/spacer.gif"=20
                  width=3D107></TD>
                <TD><IMG height=3D1 alt=3D""=20
                  =
src=3D"http://www2.business.ku.edu/apm/newsletter/templates/spacer.gif"=20
                  width=3D108></TD>
                <TD><IMG height=3D1 alt=3D""=20
                  =
src=3D"http://www2.business.ku.edu/apm/newsletter/templates/spacer.gif"=20
                  width=3D106></TD>
                <TD><IMG height=3D1 alt=3D""=20
                  =
src=3D"http://www2.business.ku.edu/apm/newsletter/templates/spacer.gif"=20
                  width=3D111></TD></TR></TBODY></TABLE><!-- =
InstanceBeginEditable name=3D"Main" -->
            <P class=3DmainHeadingBlue align=3Dleft><SPAN =
class=3DmainHeading>Breaking=20
            News</SPAN></P>
            <P class=3DmainParagraph><STRONG class=3DmainParagraph =
align=3D"left">Save=20
            the Date! </STRONG>September 22 is the 2nd Annual APM Golf=20
            Tournament. <SPAN class=3Dstyle4><IMG height=3D202=20
            =
src=3D"http://www2.business.ku.edu/apm/images/alvamar-200w.jpg"=20
            width=3D150 align=3Dright></SPAN>Start putting your team =
together!</P>
            <P class=3DmainParagraph align=3Dleft><STRONG>APM placed 3rd =
</STRONG>in=20
            the Hybrid Investment category at the RISE Competition in=20
Dayton.</P>
            <P class=3DmainParagraph align=3Dleft>Thanks to the team of=20
            <STRONG>Aaron Arnett</STRONG>, <STRONG>Carolyn =
Coleman</STRONG>,=20
            <STRONG>Matt Ferguson</STRONG>, <STRONG>Lindsay =
Phillips</STRONG>=20
            (F05), and <STRONG>Jill Seferovich</STRONG> (F05) for their =
hard=20
            work preparing the application materials and making the =
presentation=20
            for APM!<BR><BR>See the <A=20
            =
href=3D"http://www2.ljworld.com/news/2006/apr/13/ku_portfolio_beats_marke=
t_wins_honor/">article=20
            in the Lawrence Journal World</A>. </P>
            <P class=3DmainParagraph align=3Dleft>&nbsp;</P>
            <P class=3DmainHeading align=3Dleft>Great Speakers during Q1 =
2006</P>
            <P class=3DmainParagraph align=3Dleft>Thank you to all of =
our speakers=20
            this semester. The APM class owes you a tremendous debt for =
making=20
            the class such a valuable learning experience. </P>
            <TABLE width=3D321 border=3D1>
              <TBODY>
              <TR class=3Ddonor>
                <TD width=3D160>Mark Fleischhauer </TD>
                <TD width=3D145>Jayhawk Capital </TD></TR>
              <TR class=3Ddonor>
                <TD>Tony Shelby </TD>
                <TD>LSB Industries </TD></TR>
              <TR class=3Ddonor>
                <TD>Jessica Reuss (APM S96) </TD>
                <TD>Kornitzer Capital </TD></TR>
              <TR class=3Ddonor>
                <TD>Mark Seferovich</TD>
                <TD>Waddell &amp; Reed </TD></TR>
              <TR class=3Ddonor>
                <TD>Kevin Rauckman </TD>
                <TD>Garmin</TD></TR>
              <TR class=3Ddonor>
                <TD>Tom Hyde </TD>
                <TD>Wal-mart</TD></TR>
              <TR class=3Ddonor>
                <TD>Scott Jones (APM S95) </TD>
                <TD>Prairie Wind Capital </TD></TR>
              <TR class=3Ddonor>
                <TD>Todd Preheim (APM F94) </TD>
                <TD>Campanile Capital </TD></TR>
              <TR class=3Ddonor>
                <TD>John Dicus </TD>
                <TD>Capitol Federal </TD></TR>
              <TR class=3Ddonor>
                <TD>Bill Dondlinger </TD>
                <TD>NASD</TD></TR>
              <TR class=3Ddonor>
                <TD>Joanna Rupp </TD>
                <TD>University of Chicago </TD></TR>
              <TR class=3Ddonor>
                <TD>Jeff Davis </TD>
                <TD>KU Endowment</TD></TR>
              <TR class=3Ddonor>
                <TD>Dale Seuferling </TD>
                <TD>KU Endowment </TD></TR></TBODY></TABLE>
            <P><SPAN class=3DmainParagraph>Also thanks to <STRONG>Kent =
McCarthy=20
            </STRONG>for his calls to rake us over the coals! =
</SPAN></P>
            <P class=3DmainHeadingBlue align=3Dleft><A =
name=3Dhyde></A>Thomas Hyde =96=20
            Executive Vice President and Corporate Secretary Wal-Mart =
Stores=20
            Inc.</P>
            <P class=3Dauthor align=3Dleft>Group 2 =96 Pape Kane, Todd =
Kitchens,=20
            Stefan Stoyanov, Jim Whitchurch</P>
            <P class=3DmainParagraph>On March 15, <STRONG>Thomas =
Hyde</STRONG>,=20
            Executive Vice President of Wal-Mart Stores Inc.<IMG =
height=3D249=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q1_2006_newsletter/tom_hyde=
.jpg"=20
            width=3D248 align=3Dright> visited the Applied Portfolio =
Management=20
            class to make a presentation on his company=92s outlook. Mr. =
Hyde is=20
            one of the top six executives who report to the CEO, and he =
deals=20
            with the company=92s legal issues, company and public =
relations,=20
            government relations. He also functions as the company =
secretary at=20
            board meetings.</P>
            <P class=3DmainParagraph>Mr. Hyde spoke on a variety of =
subjects, but=20
            focused mainly on company goals and performance of the =
different=20
            Wal-Mart segments: Wal-Mart Stores, Sam=92s Club, and =
Wal-Mart=20
            International. The main strategy of the company has been to =
have=20
            everyday low prices in order to establish a bond with =
customers. But=20
            to do that it is also necessary to have low costs. An =
example of how=20
            Wal-Mart achieves this is that their executive offices are =
only the=20
            bare minimum, i.e., there are no unnecessary extras in space =
or=20
            amenities as can be found in many other companies=92 =
corporate=20
            offices. Wal-Mart strives to make its operations as =
cost-efficient=20
            as possible and then return those cost savings to the =
customer, as=20
            opposed to keeping the savings within the company. </P>
            <P><SPAN class=3DmainParagraph>Mr. Hyde also touched on the =
company=20
            goals, which include maintaining total shareholder return =
between 13=20
            and 15 percent and sustaining double-digit sales growth. =
Regarding=20
            the company=92s meeting those goals, he stated that it =
generally met=20
            the shareholder 13-15% return goal but only sometimes =
achieved the=20
            sales growth goals. He stated that evidence seemed to show =
that the=20
            only way to maintain the double-digit sales growth was =
through=20
            acquisitions, and that it might be necessary to rethink the =
goals.=20
            They are also experimenting with introducing higher-end =
products in=20
            some stores in select areas to stimulate sales =
growth.</SPAN></P>
            <P><SPAN class=3DmainHeading><A name=3Dmorrison></A>APM =
Alumnus Jeff=20
            Morrison Donates $10,000</SPAN><SPAN=20
            class=3DmainParagraph><BR></SPAN><SPAN class=3Dauthor>Group =
3 -Graham=20
            Ballard,Jim Bridges, Matt Ferguson, Jared Klenda,Erin =
Koksal, Adam=20
            Ryan</SPAN></P>
            <P class=3DmainParagraph>In case anyone needed any more =
evidence to=20
            verify the value of the Applied<IMG height=3D231=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q1_2006_newsletter/jeffpic.=
jpg"=20
            width=3D295 align=3Dright> Portfolio Management class, =
alumnus=20
            <STRONG>Jeff Morrison</STRONG> recently put his money where =
it=20
            counts to back up his description of the course as =
=93invaluable.=94=20
            Morrison is the only person in the course=92s thirteen year =
history to=20
            take it twice. He took it once as an undergrad from Kent =
McCarthy,=20
            and again as a Master=92s student from current Professor =
Cathy Shenoy.=20
            He is young, ambitious, excited and dedicated to supporting =
the=20
            Business School through the APM class. Recently, he donated =
$10,000=20
            to the portfolio to prove this dedication. His career path =
has taken=20
            him from studying systems used by brokers to trade stocks, =
to=20
            recently starting his own construction company. Successful =
at all=20
            he=92s pursued so far, he kindly took time out of his busy =
schedule as=20
            a new business owner and father to tell his story. </P>
            <P class=3DmainParagraph>Morrison came to KU pursuing a =
degree in=20
            Business, but was always interested more specifically in =
Finance.=20
            Morrison has subsequently been the co-chair of the =
differential=20
            tuition committee that brought the Finance major to the =
business=20
            school. As an MBA student he was able to focus more =
specifically on=20
            Finance topics. In the APM class, he learned the critical =
thinking=20
            and time management skills required to be successful. For =
APM, he=20
            pointed out, =93You have to prepare. The class isn=92t any =
good unless=20
            the students are open to a lot of discussion.=94 As top =
managers from=20
            the different companies in the portfolio come in to speak =
each week,=20
            the students must learn enough to ask the tough questions to =
make=20
            the class interesting. As Morrison points out, however, =
=93[the=20
            students] are not going to be right.=94 He suggests just to =
speak up=20
            because everyone can learn from the mistakes of classmates. =
Each=20
            week, Morrison reminds current and future students to =
understand the=20
            company=92s story and what makes it tick. He suggests always =
reading=20
            the fine print of the quarterly and annual reports to =
understand=20
            where the company is coming from and where it=92s headed. =
The top=20
            managers, he admits, should know =9340 times what [the =
students]=20
            learned in a week,=94 but the discussion is key to learning. =
</P>
            <P class=3DmainParagraph><SPAN =
class=3DmainParagraph>Morrison recommends=20
            the class to anyone who has an interest in investing. The =
topics and=20
            assignments are all very =93real world=94 and KU students =
should take=20
            advantage of this =93unique class.=94 According to Morrison, =
KU is one=20
            of only a few schools to have a student-run portfolio with =
this type=20
            of setup, and the $1 million value is getting =93people to =
take=20
            notice.=94 Morrison definitely supports the course, which he =
describes=20
            as a =93gem of the business school,=94 and his $10,000 =
donation was even=20
            matched 4:1 by course founder Kent McCarthy thanks to a =
little=20
            pressure from Morrison. Clearly, the class was valuable =
enough to=20
            him that he gave generously to help it continue to=20
            grow.<BR></SPAN></P>
            <P class=3DmainParagraph><SPAN class=3DmainHeading><A=20
            name=3Dgarmin></A>Insights from Kevin Rauckman, CFO, Garmin, =

            LTD.</SPAN><BR><SPAN class=3Dauthor>Group 1 - Rachel =
Aronovich, Brad=20
            Framke, Alex Ketzner, Sam Klein, Chris Routh</SPAN></P>
            <P class=3DmainParagraph>On March 8, 2006, the Spring 2006 =
APM class=20
            welcomed Mr.<STRONG> Kevin Rauckman</STRONG>, Chief =
Financial=20
            Officer of Garmin, Ltd., to discuss Garmin=92s recent<IMG =
height=3D280=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q1_2006_newsletter/kevinr.j=
pg"=20
            width=3D200 align=3Dright> performance and overall business. =
Mr.=20
            Rauckman is a native of Lawrence, KS, and he graduated from =
the=20
            University of Kansas with an MBA in accounting. He has been =
with=20
            Garmin since January 1999, and stated his experience has =
been=20
            tremendous. The opportunity to listen to Mr. Rauckman =
provided for=20
            an excellent learning experience as well as the chance to =
get an=20
            inside perspective on the company=92s operations.</P>
            <P class=3DmainParagraph>Mr. Rauckman began with a =
discussion of=20
            Garmin=92s product offering and business model. He stated =
the strategy=20
            going forward in the consumer market, which is the main =
source of=20
            revenue, is to vary product offerings in respect to features =
and=20
            prices. Many of the features of both consumer and aviation =
products=20
            are a result of partnerships Garmin has pursued, which =
include=20
            companies such as Sprint, Cessna and Honda. The future looks =

            promising due to international and domestic opportunities, =
Garmin=92s=20
            emphasis on innovation, and history of consistent sales and =
income=20
            growth.</P>
            <P class=3DmainParagraph>Mr. Rauckman also enthusiastically =
answered=20
            questions from students that covered topics from growth=20
            opportunities and acquisition activities to specific =
products and=20
            financial statements. For instance, he discussed Garmin=92s =
Nuvi=20
            product, a portable GPS device with various features for any =
type of=20
            traveler. Garmin is continuing in its pursuit to add more=20
            technologies to the Nuvi, such as blue tooth technology, an =
MP3=20
            player and additional language options. Several growth =
opportunities=20
            are also available to Garmin; for example, in the aviation =
segment,=20
            Garmin has yet to enter into the Bizjet market. The Asian =
market and=20
            automotive industry also remain areas Garmin sees potential =
for=20
            growth. With respect to the financials, he stressed a strong =
balance=20
            sheet with lots of cash for acquisitions, high margins in =
the=20
            aviation segment, a strong commitment to research and =
development,=20
            and increased marketing spending in recent years. </P>
            <P class=3DmainParagraph>The APM class would like to thank =
Mr.=20
            Rauckman for his time and useful insights.<BR></P>
            <P class=3DmainParagraph><SPAN class=3DmainHeading><A=20
            name=3Dgmed></A>Golden Meditech</SPAN><BR><SPAN =
class=3Dauthor>Group 8 -=20
            Shiheng Cai, Carlos Lock, Anvita Mishra, Paul O'Connell, =
Shae=20
            Spence</SPAN> </P>
            <P class=3DmainParagraph>Executive lecturer <STRONG>Kent=20
            McCarthy</STRONG> and the APM class both agree that Chinese=20
            securities may represent some of the most compelling value=20
            investments today. The China markets have significantly =
lagged other=20
            emerging markets for several years so that many listed =
companies,=20
            despite their strong financials and growth prospects, offer =
uncommon=20
            opportunity for investment. Positive market reforms and a =
heightened=20
            awareness of strong economic growth in China have begun to =
attract=20
            both internal and international investment to the these =
markets,=20
            causing them to gain traction. </P>
            <P class=3DmainParagraph>One Chinese security that the class =
is very=20
            excited about is Golden Meditech (8180 on the HKEX and GMDTF =
on the=20
            Pink Sheets). That excitement is evident by the 12.82% =
position that=20
            it holds in the portfolio (or roughly $155k). This also =
mirrors the=20
            sentiment of Jayhawk Capital Management, which owns 13.8% of =
the=20
            shares of the Golden Meditech. The company operates in six =
separate=20
            segments, including production of ABRS medical devices and =
supplies,=20
            medical device distribution, Tang herbal that is approved =
for the=20
            treatment of Aids, Cord Blood Bank storage, mobile phone=20
            distribution (vital sign medical monitoring service), and a =
large=20
            equity ownership in China Medical (CMED, tumor =
treatment).</P>
            <P class=3DmainParagraph>APM believes that Golden Meditech =
is=20
            significantly undervalued. Golden Meditech recently entered =
into an=20
            agreement to divest 20 million shares (2 M ADRs) back to =
CMED,=20
            reducing Golden Meditech ownership in the company from 18.3% =
to 11%.=20
            Subtracting from Golden Meditech=92s March market cap of =
about $400M,=20
            the $92M attributable to its 11% stake in CMED and the cash =
recently=20
            received for 7% of CMED, its five other segments are valued =
at=20
            roughly $196 million or 5.0 times 2007 potential earnings of =
$40=20
            million. </P>
            <P class=3DmainParagraph>CMED itself trades on the NASDAQ at =
31 times=20
            earnings. Some might argue that Golden Meditech trades at a =
discount=20
            to such comparable NASDAQ listed companies because stocks =
that trade=20
            on the GEM (Growth Equity Market) in Hong Kong are less =
attractive=20
            to institutional buyers. Also, Golden Meditech has multiple =
lines of=20
            business that are seemingly unrelated, some are not yet =
profitable,=20
            and the overall strategy is not well understood, giving =
potential=20
            investors pause for concern. </P>
            <P class=3DmainParagraph>On the other hand, management has =
an=20
            outstanding acquisition track record of capitalizing on its =
equity=20
            positions, and this ability negates the fears expressed by =
covering=20
            analysts, After all, Golden Meditech purchased a 25% =
interest in=20
            CMED for HK$38mm in 2003, and two years later CMED was =
producing=20
            HK$45mm in pre-tax profits. In August of 2005, CMED was =
listed on=20
            the NASDAQ and Golden Meditech benefited with approximately =
HK$117mm=20
            in exceptional gains from the offering. We are hopeful that =
a=20
            listing of Golden Meditech itself on NASDAQ could be on the =
horizon=20
            so that it could enjoy this kind of multiple expansion =
afforded its=20
            comparables, and that would be beneficial to investors.</P>
            <P class=3DmainParagraph><SPAN class=3DmainParagraph>We =
think Golden=20
            Meditech could be poised for a breakout year. We look =
forward to=20
            continually evaluating our position in Golden Meditech and =
keeping=20
            track of how our analysis and forecasts pan out over the =
coming=20
            months. <BR></SPAN></P>
            <P class=3DmainParagraph><IMG height=3D87=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q1_2006_newsletter/oplk.jpg=
"=20
            width=3D267 align=3Dmiddle><A name=3Doplink></A></P>
            <P class=3DmainParagraph><SPAN class=3DmainHeading>2006 APM =
Fall Class=20
            Letter-Writing Efforts Make Impact</SPAN><BR><SPAN =
class=3Dauthor>Kyle=20
            Bateman</SPAN></P>
            <P class=3DmainParagraph>Under the guidance of <STRONG>Kent=20
            McCarthy</STRONG>, the Fall 2006 APM class spent =
considerable time=20
            and effort dissecting Oplink, Inc. financials to gain a =
better=20
            understanding of why the company would not approve a share=20
            repurchase program, despite having $186 million in excess =
cash on=20
            their balance sheet. The groups pursued an aggressive =
letter-writing=20
            strategy to select board members in hopes of making an =
impact on the=20
            board=92s decision process on how to use the cash. Mr. =
McCarthy=20
            continuously promised that the students=92 letters would be =
taken=20
            seriously and even had the potential to make an impact on =
the=20
            company. In light of recent events taken by Oplink, it =
appears his=20
            promise has come true.</P>
            <P class=3DmainParagraph>Mr. Herbert Chang, Oplink chairman =
of the=20
            board, received particular attention in the letter-writing =
strategy=20
            because of his outspoken resistance to a share repurchase, =
and also=20
            because a hedge fund that he owns that could have a conflict =
of=20
            interest with Oplink. It was speculated by the class that =
Mr. Chang=20
            might be opposing a share-repurchase because he had plans =
for Oplink=20
            to use its cash to make acquisitions of some tech companies =
that he=20
            himself owned through his InveStar Capital and Forefront =
Venture=20
            fund. Several letters addressed to Mr. Chang aggressively =
asserted=20
            that his refusal to consider a share repurchase was =
neglectful of=20
            the interests of the shareholders and even hinted that the =
conflict=20
            of interest issue could result in legal action.</P>
            <P class=3DmainParagraph>On February 16, 2006, Mr. Chang =
announced=20
            that he would be stepping down from his position of chairman =
to=20
            =93pursue other interests.=94 Although the board of =
directors has yet to=20
            implement a share repurchase program, the resignation of =
Herbert=20
            Chang proves that the letter-writing was indeed taken =
seriously and=20
            that the class has something to show for their efforts.</P>
            <P><SPAN class=3DmainHeading><A name=3Dshort></A>Short =
Updates=20
            </SPAN><BR><SPAN class=3Dauthor>Group 5 -Chris Bennett, =
Carolyn=20
            Cornett, Kevin Knipp, Anthony Marnell </SPAN></P>
            <P><SPAN class=3Dsubtitle>BHBC</SPAN><IMG height=3D146=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q1_2006_newsletter/bhbc.jpg=
"=20
            width=3D133 align=3Dright><BR><SPAN =
class=3DmainParagraph>Beverly Hills=20
            Bancorp Inc. is a financial holding company that operates in =

            southern California and surrounding states. They focus on =
the=20
            origination of real estate loans, specifically in commercial =
and=20
            multifamily uses, making up 50% and 45% of its loan =
portfolio=20
            respectively. BHBC=92s investment subsidiary.</SPAN></P>
            <P class=3DmainParagraph>On March 9, 2006, BHBC declared its =
regular=20
            quarterly dividend of 12 1/2 cents, payable on April 1. The=20
            portfolio will receive $500 from the 4,000 shares that it =
currently=20
            holds. The fund sold 1,000 shares in BHBC for $9.98 per =
share on=20
            December 15th, increasing the total number of shares sold =
during the=20
            year to 4,500. The stock is currently trading at $10.37 per =
share, a=20
            3.9% increase since December 15, 2005.</P>
            <P><IMG height=3D69=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q1_2006_newsletter/lsb.jpg"=
=20
            width=3D158 align=3Dmiddle></P>
            <P><SPAN class=3Dsubtitle>LXU</SPAN><BR><SPAN =
class=3DmainParagraph>LSB=20
            Industries focuses on two distinct business segments: the=20
            engineering and manufacturing of air conditioning and =
heating units=20
            and chemical manufacturing producing fertilizer-grade =
ammonium=20
            nitrate. </SPAN></P>
            <P class=3DmainParagraph>The APM portfolio contains both LXU =
common=20
            and preferred shares. The aggregate 1,000 preferred shares =
were=20
            purchased for an average cost of $27 per share, first in =
2001 at=20
            $20-21 per share, and then again in 2005 for $46 per share. =
The=20
            shares are now trading at $58.00 (117% return). Half of the=20
            aggregate 6,000 common shares were purchased in 2003 between =
$1.40=20
            and $3.00 per share, and the remainder in 2005 for $6.12. At =
an=20
            average cost of $4.40 and currently trading at $8.10, the =
shares=20
            have a 84% return.</P>
            <P class=3DmainParagraph>The class has reviewed a model that =
predicts=20
            LXU earnings based on plant production and ammonium nitrate =
and=20
            natural gas prices. From this analysis, it seems that the =
plant in=20
            El Dorado will become profitable this year, putting the =
company=20
            in-line to experience positive price gains. <SPAN=20
            class=3DmainParagraph></SPAN></P>
            <P class=3DmainHeading><A name=3Dharry></A>Alumnus Message =
about Giving=20
            </P>
            <P class=3DmainParagraph><STRONG>Harry Falk </STRONG>(APM =
S02) sent a=20
            great e-mail about giving to the University and APM. I asked =
him for=20
            a personal update, but he thought it more important to =
mention the=20
            importance of giving to current students and alumni. Here's =
the=20
            message that Harry would like to relay: </P>
            <P class=3DmainParagraph>I would want it to be about giving =
back to=20
            the University and particularly APM. This was actually my =
first=20
            donation to KU, outside of Alumni dues, and I chose to make =
to APM,=20
            not just because of the positive experience I had in the =
class but=20
            because I feel I understand what the money is being used =
for/going=85.=20
            I believe Mr. McCarthy will match my donation (which is very =

            important with a young family and mortgage payment, if =
giving $100=20
            turns into $200 with the match, I feel I contributed even =
more). I=20
            have a tremendous amount of respect for the entire finance =
faculty,=20
            whom I found to be passionate, not just about the subject =
they=20
            teach, but about supporting this class. </P>
            <P class=3DmainParagraph>I would also recommend reminding =
people to=20
            see what their company offers in terms of matching =
contributions and=20
            automatic payroll deductions for donations. Wells will match =
$ for=20
            $, which was another reason for the donation, I felt between =
Mr.=20
            McCarthy's match and Wells match, I was netting more money =
for the=20
            school with my small donation. I might have only given $100 =
but=20
            overnight I turned into a $300 donation. Additionally, Wells =
offers=20
            payroll deductions for donations so that I don't actually =
have to=20
            cut a check and mail it in, they either do it as a one time=20
            deduction or take it out over the entire year, which makes =
donating=20
            a lot easier.</P>
            <P class=3DmainParagraph>Well said, Harry! </P>
            <P class=3DmainParagraph>
            <P class=3DmainHeading><A name=3Dalums></A>Alumni News </P>
            <P class=3DmainParagraph><STRONG>Allen Tikwart </STRONG>(APM =
F96)=20
            recently moved to MVP Asset Management LLC where he =
co-manages an=20
            onshore and offshore hedge fund-of funds. It is a =
multi-strategy=20
            fund that strives to achieve historical equity market =
returns with=20
            fixed income risk. </P>
            <P class=3DmainParagraph><STRONG>Ruben Sigala </STRONG>(APM =
S96)=20
            recently accepted a position as Director of Pricing for =
Harrah's=20
            Entertainment in Las Vegas.</P>
            <P class=3DmainParagraph><STRONG>Lian Kuitang</STRONG> (APM =
F03)=20
            recently accepted a position in Beijing as a Business =
Associate for=20
            AIGBC, a AIG consulting firm dealing in cooperation with =
China=92s=20
            largest general insurer, PICC, a public firm listed on HK =
exchange.=20
            </P>
            <P class=3DmainParagraph><STRONG>Tim Burger </STRONG>(APM =
S05) passed=20
            his Level I CFA. Congratulations!</P>
            <P class=3DmainParagraph><STRONG>Patrick Quinn </STRONG>(APM =
S05) is=20
            interning at Perry Capital in New York prior to Graduate =
School at=20
            Wisconsin's Applied Security Analysis Program. </P>
            <P class=3DmainParagraph><STRONG>Harry Falk </STRONG>(APM =
S02)=20
            welcomed his first child in late 2004 (Harry V). He and is =
family=20
            live in Lodi, CA. Harry works at Wells Fargo in Sacramento =
as a=20
            Relationship Manager in the Real Estate Group doing =
construction=20
            loans.</P>
            <P class=3DmainParagraph><STRONG>Carolyn Mohr </STRONG>(APM =
S05)=20
            recently passed the CPA exam. <BR></P>
            <P class=3DmainParagraph><STRONG>Alums send us your news! It =
is great=20
            to hear from you. </STRONG></P>
            <P class=3DmainParagraph><SPAN class=3DmainHeading><A=20
            name=3Ddonors></A></SPAN></P>
            <P class=3DmainParagraph><SPAN class=3DmainHeading>Thanks to =
all our=20
            Recent Donors!</SPAN></P>
            <TABLE cellSpacing=3D2 width=3D400 border=3D0>
              <TBODY>
              <TR class=3Dstyle1>
                <TD class=3Ddonor>David Reynoldson </TD>
                <TD class=3Ddonor>Gregory Baugh </TD></TR>
              <TR class=3Dperformancetotal>
                <TD class=3Ddonor>Charles D. and Marie McCarthy</TD>
                <TD>Fred Coulson </TD></TR>
              <TR class=3Dperformancetotal>
                <TD>Gene Diederich</TD>
                <TD><SPAN class=3Ddonor>Teal Dakan</SPAN></TD></TR>
              <TR class=3Dperformancetotal>
                <TD><SPAN class=3Ddonor>Jim and Julie Colahan =
</SPAN></TD>
                <TD class=3Ddonor>Jon Blumb</TD></TR>
              <TR class=3Dperformancetotal>
                <TD><SPAN class=3Ddonor>Scott F. Jones </SPAN></TD>
                <TD class=3Ddonor>Todd and Colleen Preheim</TD></TR>
              <TR class=3Dperformancetotal>
                <TD><SPAN class=3Ddonor>Jim MacMurray</SPAN></TD>
                <TD>Amos Smith </TD></TR>
              <TR class=3Dperformancetotal>
                <TD>Simon Michael </TD>
                <TD>John Katzer </TD></TR>
              <TR class=3Dperformancetotal>
                <TD><SPAN class=3Ddonor>Harry Falk IV </SPAN></TD>
                <TD><SPAN class=3Ddonor>Jeff Morrison=20
</SPAN></TD></TR></TBODY></TABLE>
            <P class=3DmainParagraph><A name=3Dcontribute></A>If you =
would like to=20
            donate, Kent is still matching alumni donations 2:1 and all =
other=20
            1:1. The matching program may end soon, so send your =
contributions=20
            to <BR><BR><SPAN class=3Dsmalltext>School of Business=20
            Endowment<BR>Applied Portfolio Management<BR>c/o Gregory J. =
Lamb=20
            <BR>KU School of Business<BR>1300 Sunnyside =
Avenue<BR>Lawrence,=20
            Kansas=20
        66045-7585</SPAN><BR></P><!-- InstanceEndEditable =
--></TD></TR></TBODY></TABLE>
      <TABLE width=3D"100%" border=3D0>
        <TBODY>
        <TR>
          <TD class=3Dcopyright vAlign=3Dcenter align=3Dmiddle>Copyright =
2004,=20
            Applied Portfolio Management Program<BR>University of Kansas =
School=20
            of Business</TD></TR></TBODY></TABLE></TD>
    <TD class=3Drightpane vAlign=3Dtop align=3Dleft>
      <P>&nbsp;</P></TD>
    <TD><IMG height=3D167 alt=3D""=20
      =
src=3D"http://www2.business.ku.edu/apm/newsletter/templates/spacer.gif"=20
      width=3D1 border=3D0></TD></TR></TBODY></TABLE><!-- InstanceEnd =
--></BODY></HTML>

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------=_NextPart_000_0069_01C7EBDB.9F90CA60
Content-Type: text/css;
	charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable
Content-Location: http://www2.business.ku.edu/apm/css/apm_styles.css

.leftpane {
	BORDER-RIGHT: #666666 1px solid; PADDING-RIGHT: 0px; PADDING-LEFT: 0px; =
FONT-SIZE: 10px; BACKGROUND-IMAGE: url(left_bgnd.jpg); PADDING-BOTTOM: =
0px; PADDING-TOP: 0px; BACKGROUND-REPEAT: repeat-x; FONT-FAMILY: Tahoma, =
Verdana, Arial
}
.toppane {
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BACKGROUND-COLOR: #990000
}
.headingsub {
	FONT-WEIGHT: bold; FONT-SIZE: 10px; COLOR: #cccccc; FONT-FAMILY: =
Verdana, Tahoma, Arial
}
.topright {
	BACKGROUND-POSITION: right top; BACKGROUND-IMAGE: =
url(topright_bgnd.jpg); BACKGROUND-REPEAT: repeat-y; BACKGROUND-COLOR: =
#990000
}
.topleft {
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top
}
.title1 {
	FONT-WEIGHT: bold; FONT-SIZE: 24px; COLOR: #cccccc; FONT-FAMILY: =
Tahoma, Verdana, Arial
}
.rightpane {
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url(rightpane.gif); BORDER-LEFT: #666666 1px solid; BACKGROUND-REPEAT: =
no-repeat; FONT-FAMILY: Tahoma, Verdana, Arial; BACKGROUND-COLOR: =
#cccccc
}
.leftnewsheading {
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Verdana, Tahoma, Arial; BACKGROUND-COLOR: #666666
}
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Arial
}
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}
A:link {
	COLOR: #666699; TEXT-DECORATION: none
}
A:hover {
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}
A:visited {
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}
bodyHeading {
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}
mainHeading {
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}
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4px
}
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1px; COLOR: #000000; TEXT-INDENT: 1em; PADDING-TOP: 1px; FONT-FAMILY: =
Tahoma, Verdana, Arial; TEXT-ALIGN: justify
}
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BORDER-BOTTOM: #666666 1px solid; FONT-FAMILY: Verdana, Tahoma, Arial
}
.performancetotal {
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Verdana, Arial
}
.performancefulltable {
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BORDER-LEFT: #666666 1px solid; BORDER-BOTTOM: #666666 1px solid
}
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}
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FONT-FAMILY: Verdana, Tahoma, Arial
}
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Arial; LETTER-SPACING: 4px
}
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Verdana, Tahoma, Arial, sans-serif
}
.link {
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Verdana, Tahoma, sans-serif; TEXT-DECORATION: underline
}
.perfomancelink {
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COLOR: #0066cc; FONT-FAMILY: Tahoma, Verdana, Arial; TEXT-DECORATION: =
underline
}
.list {
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LIST-STYLE-POSITION: inside; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; =
COLOR: #000066; TEXT-INDENT: 5em; PADDING-TOP: 1px; FONT-FAMILY: Tahoma, =
Verdana, Arial; LIST-STYLE-TYPE: disc; POSITION: relative; TOP: auto; =
TEXT-ALIGN: justify
}
.smallpurplelink {
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Verdana, Tahoma, Arial; TEXT-DECORATION: none
}
.smalltext {
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Arial
}
.smallpurplelink A:hover {
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}
A.smallpurplelink:hover {
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}
.mainHeadingBlue {
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#999999 1px solid; FONT-FAMILY: Verdana, Tahoma, Arial; LETTER-SPACING: =
4px
}
.donor {
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BORDER-LEFT: 0px; BORDER-BOTTOM: 0px; FONT-FAMILY: Tahoma, Verdana, =
Arial
}
.golfheader {
	FONT-WEIGHT: bold; FONT-SIZE: x-large; TEXT-TRANSFORM: capitalize; =
COLOR: #000066; FONT-STYLE: normal; FONT-FAMILY: Verdana, Tahoma, Arial, =
sans-serif; TEXT-ALIGN: center; FONT-VARIANT: normal
}
.golfsubheader {
	FONT-WEIGHT: normal; FONT-SIZE: large; TEXT-TRANSFORM: capitalize; =
COLOR: #970f1d; FONT-STYLE: normal; FONT-FAMILY: Verdana, Tahoma, Arial, =
sans-serif; TEXT-ALIGN: center; FONT-VARIANT: normal
}
.golfmain {
	FONT-WEIGHT: bold; FONT-SIZE: 14px; WORD-SPACING: 7px; COLOR: #000066; =
BORDER-BOTTOM: #999999 thin; FONT-FAMILY: Verdana, Tahoma, Arial; =
LETTER-SPACING: 4px; TEXT-ALIGN: center
}
.researchlist {
	FONT-SIZE: small; COLOR: #000033; FONT-STYLE: normal; FONT-FAMILY: =
Verdana, Tahoma, Arial, sans-serif; HEIGHT: auto; TEXT-ALIGN: left
}

------=_NextPart_000_0069_01C7EBDB.9F90CA60--
