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Subject: APM Q4 2005 News
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      <TABLE height=3D"15%" cellSpacing=3D0 cellPadding=3D0 =
width=3D"100%" align=3Dleft=20
      border=3D0>
        <TBODY>
        <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>4th Quarter=20
            2005</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>
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      <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/q4-05/apmnews_q4-05.ht=
m#Golf">McCarthy=20
              Grill </A>
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#buffett">Buffett=20
              Visit</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#tortoise">Tortoise=20
              CEO Visit</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#berges">Marcey=20
              Berges Visit</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#CERN">Cerner=20
              Visit</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#blurb">Stock=20
              Updates - GRMN &amp; EGOV</A>=20
              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#perform">Portfolio=20
              Performance</A>=20
              <LI><A title=3D"2005 APM Performance Report"=20
              =
href=3D"http://www2.business.ku.edu/apm/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/q4-05/apmnews_q4-05.ht=
m#donors">Donors</A>=20

              <LI><A=20
              =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.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 height=3D10><!-- =
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/q4-05/apmnews_q4-05.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/q4-05/apmnews_q4-05.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/q4-05/apmnews_q4-05.ht=
m#Performance"><STRONG>4th=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/q4-05/apmnews_q4-05.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/q4-05/apmnews_q4-05.ht=
m#Performance"><STRONG>SP500</STRONG></A></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">3.0%</A>=20
                  </DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">1.6%</A></DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">3.0%</A></DIV></TD></TR>
              <TR class=3Dperformancetotal>
                <TD class=3Dperformancetotal><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance"><STRONG>SP600</STRONG></A></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">2.1%</A></DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">0.1%</A></DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">2.1%</A></DIV></TD></TR>
              <TR class=3Dperformancetotal>
                <TD class=3Dperformancetotal><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance"><STRONG>NASDAQ</STRONG></A></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">1.7%</A></DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">2.5%</A></DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">1.7%</A></DIV></TD></TR>
              <TR class=3Dperformancetotal>
                <TD class=3Dperformancetotal><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance"><STRONG>APM=20
                  Managed </STRONG></A></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">34.0%</A></DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">19.9%</A></DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance">34%</A></DIV></TD></TR>
              <TR class=3Dperformancetotal>
                <TD class=3Dperformancetotal><A=20
                  =
href=3D"http://www2.business.ku.edu/apm/newsletter/q4-05/apmnews_q4-05.ht=
m#Performance"><STRONG>APM=20
                  Total</STRONG></A></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>31.8%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>16.9%</DIV></TD>
                <TD class=3Dperformancetotal>
                  <DIV align=3Dcenter>31.8%</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><A =
name=3DGolf></A>Kent McCarthy=20
            Grills APM Class</P>
            <P class=3Dauthor align=3Dleft>By Group 3: Hunter Davis, =
Kyle Bateman,=20
            Rex Reinhardt</P>
            <P class=3DmainParagraph align=3Dleft>The class is =
especially thankful=20
            to <STRONG>Kent McCarthy</STRONG>, CEO of Jayhawk Capital =
and<IMG=20
            height=3D179 hspace=3D4=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q4-05_newsletter/smallkenti=
nclass2_halloween2005.jpg"=20
            width=3D213 align=3Dright> Executive Lecturer, for the APM =
class who=20
            contributed his time and knowledge to the class on three =
separate=20
            occasions this quarter. </P>
            <P class=3DmainParagraph>On October 31, Mr. McCarthy took =
time away=20
            from enjoying his children's Halloween to speak to the class =
about=20
            his thoughts on Oplink, Golden Meditech, and Internacional =
de=20
            Ceramica. Regarding Oplink, the class members discussed =
their=20
            feelings about the recent conference call and the impact of =
their=20
            letters written to the board asking for a share repurchase. =
The=20
            general feeling about the conference call was positive: =
Oplink=20
            reported quarterly revenue up 20% sequentially and several =
other=20
            investors were more vocal in their concerns about the excess =
cash.=20
            In retrospect, it also would seem that their letters did =
have some=20
            impact because shortly thereafter, the board announced a =
reverse=20
            7-for-1 stock split (although Mr. McCarthy remains somewhat=20
            skeptical about the timing of the announcement, which =
coincided=20
            with<IMG height=3D210 hspace=3D4=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q4-05_newsletter/annie_char=
lie_halloween2005.jpg"=20
            width=3D127 align=3Dright> management incentive stock =
options). As a=20
            special treat for the Halloween class, Kent's children -=20
            <STRONG>Annie</STRONG>, <STRONG>Charlie</STRONG> and=20
            <STRONG>Molly</STRONG> visited class and passed out treats. =
</P>
            <P class=3DmainParagraph>On November 14, Mr. McCarthy again =
called in=20
            to the class to discuss his thoughts on their Golden =
Meditech=20
            (HK:8180) and Interceramic reports. When valuing Golden =
Meditech,=20
            Mr. McCarthy thought it wise to look at individual segment =
growth=20
            rates and model each using multiples. The real story behind =
the=20
            company is their low enterprise Value and their investment =
in China=20
            Medical (NASDAQ:CMED). The two companies' enterprise values =
are=20
            almost equal, but China Medical's P/S ratio is 11 vs. Golden =

            Meditech's P/S of 7.5. Golden Meditech's sales do not =
include their=20
            investment in China Medical. However, for a company like=20
            Interceramic, he stated that it is best to value it using =
EBITDA and=20
            an appropriate multiple. After questioning each group about =
the=20
            assumptions they had made, McCarthy asserted his belief that =
the=20
            proper EBITDA multiple for Interceramic is 8x, and that it =
can grow=20
            its EBITDA to $70 million by 2007.</P>
            <P class=3DmainParagraph>On December 5, Mr. McCarthy again =
called in=20
            to the class to wrap up any<IMG height=3D180 hspace=3D4=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q4-05_newsletter/smallmolly=
_halloween2005Dscn0683.jpg"=20
            width=3D186 align=3Dright> remaining questions that students =
may have=20
            had. Several questions about Oplink revealed that Mr. =
McCarthy was=20
            waiting on revenue growth results from the next conference =
call to=20
            determine whether or not the stock had any more room for =
growth=20
            (following the reverse split, the stock price went up over =
30%). He=20
            was pessimistic about the possibility of a share repurchase =
anytime=20
            in the near future, but commented on some advantages that a=20
            consolidation in the industry could have for the company =96 =
notably,=20
            the possible acquisition of ailing Bookham. Mr. McCarthy =
also=20
            revealed that he holds Golden Meditech in high regard, and =
advised=20
            the class that it would be a good idea to further increase =
their=20
            position in the company, even at the cost of selling some of =

            Oplink.</P>
            <P class=3DmainParagraph><SPAN class=3DmainHeading><IMG =
height=3D171=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q4-05_newsletter/robinsonla=
yup_small.jpg"=20
            width=3D112 align=3Dright></SPAN></P>
            <P class=3DmainHeading>APM Scholarship Recipient</P>
            <P class=3DmainParagraph>This year as in the past the APM =
portfolio=20
            financed a basketball scholarship. The beneficiary of the =
$19,000=20
            scholarship is Russell Robinson.</P>
            <P class=3D"mainParagraph style2">Thanks to KUSports.com and =

            photographer Thad Allender for this shot of RR. </P>
            <P class=3D"mainParagraph style2">&nbsp;</P>
            <P class=3D"mainParagraph style2">&nbsp;</P>
            <P class=3DmainHeading><A name=3Dbuffett></A>APM again =
visits Warren=20
            Buffett </P>
            <P class=3Dauthor>By Group 4: Lyndsey Long, Lindsey =
Phillips, Daniel=20
            Sailors, and Jill Seferovich </P>
            <P class=3DmainParagraph>On Friday, December 5, students and =
faculty=20
            from the University of Kansas <IMG height=3D261 hspace=3D4=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q4-05_newsletter/buffett_jo=
hnson.jpg"=20
            width=3D257 align=3Dright> traveled to Omaha, Nebraska for a =
private=20
            meeting with Berkshire Hathaway founder and famed investor,=20
            <STRONG>Warren Buffett</STRONG>. Two teams from Professor=20
            <STRONG>Mark Hirschey</STRONG> =92s Security Analysis class =
pitched=20
            investment ideas in a private session with Mr. Buffett. Each =
group=20
            in that class had selected a company they believed would be =
a good=20
            addition to the Berkshire Hathaway family and worked all =
semester to=20
            develop an investment proposal. </P>
            <P class=3DmainParagraph>The companies presented were Pella =
Corp., the=20
            top quality and expensive window manufacturer, and Schwan =
Food=20
            Company. Schwan racks up more than $3 billion in annual =
revenue from=20
            selling ice cream, other dairy products, and Red Baron =
frozen pizza.=20
            Alfred Schwan himself met with the students earlier in the =
week to=20
            hear their plan, which put a price tag of $5.2 billion on =
his=20
            business. Students performed skits in which they =
demonstrated their=20
            support for each investment choice.</P>
            <P class=3DmainParagraph><SPAN class=3DmainParagraph>Mr. =
Buffett said he=20
            plans on following up with both Schwan and Pella. If he acts =
on=20
            these investment suggestions after evaluating the =
opportunity, the=20
            students each will receive two Berkshire B shares. =
Throughout the=20
            year, several college groups make the same trip to Omaha. =
However,=20
            KU has made a lasting impression with its students=92 =
creativity,=20
            professionalism, and enthusiasm. KU is the only student =
group to=20
            receive two Berkshire B shares if Mr. Buffett acts on its =
investment=20
            proposals, while most other groups receive just one B share. =
Among=20
            the APM students who participated in the skits were =
<STRONG>Hunter=20
            Davis</STRONG>, <STRONG>Alex Fitzke</STRONG>, =
<STRONG>Matthew=20
            Johnson</STRONG>, and <STRONG>Daniel Sailors</STRONG>, and =
TA=20
            <STRONG>Jason Mitchell</STRONG>. Matt Johnson portrayed Mr. =
Buffet=20
            in the first investment presentation. </SPAN></P>
            <P class=3DmainParagraph><SPAN =
class=3DmainParagraph><BR></SPAN><SPAN=20
            class=3DmainHeading><IMG height=3D70=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q4-05_newsletter/tortoise_l=
ogo.jpg"=20
            width=3D487 align=3DtextTop><A name=3Dtortoise></A>Tortoise =
CEO Returns to=20
            APM</SPAN><SPAN class=3DmainParagraph><BR></SPAN><SPAN =
class=3Dauthor>By=20
            Group 1: Brian Conklin, Thomas Roelofsen, Thailiem Tran, and =
Justin=20
            Waters</SPAN></P>
            <P class=3DmainParagraph><SPAN class=3DmainParagraph>The =
2005 fall=20
            semester APM class welcomed back <STRONG>David =
Shulte</STRONG>,=20
            President and CEO of Tortoise Capital Advisors. Tortoise =
functions=20
            as the managing advisor of Tortoise Energy Infrastructure=20
            Corporation (TYG), Tortoise Energy Capital Corporation =
(TYY), and=20
            Tortoise North American Energy Corporation (TYN). All three =
funds=20
            are closed-end pure-play mutual funds with a direct focus on =
Energy=20
            Infrastructure Master Limited Partnerships (MLPs) and =
Canadian=20
            Income and Royalty Trusts. </SPAN></P>
            <P class=3DmainParagraph><SPAN =
class=3DmainParagraph>Tortoise was the=20
            first of just a few mutual funds to invest directly in MLPs =
and led=20
            the competition with its February 2004 IPO of TYG. Tortoise=20
            pioneered the tax strategy that allows investment companies =
to=20
            invest in MLPs. Since then, TYG has seen its stock =
appreciate over=20
            10% from $25.00 at the IPO to $27.55 (as of 12/14/05) and =
has been=20
            paying out dividends, which are currently at a 6.6% yield.=20
            </SPAN></P>
            <P class=3DmainParagraph>During his visit, David Shulte =
introduced the=20
            class to TYY, which IPO=92d in May 2005, with a road-show =
pitch=20
            usually presented to institutional investors around the =
country.=20
            Shulte wanted the class to get a feel for such environments =
and=20
            encouraged the class to ask tough questions. Institutional =
investors=20
            are able to invest in MLPs through Tortoise=92s funds, =
whereas they=20
            are not able to invest in the underlying MLP companies.</P>
            <P class=3DmainParagraph>Also while in class, Shulte =
discussed the=20
            historical risk-return of MLPs. In the last ten years, MLPs =
have=20
            yielded a higher return than the stock market while at the =
same time=20
            taking on less risk. The annual return over a 10 year period =
for=20
            MLPs has averaged nearly 20% compared to the S&amp;P 500 =
index=20
            returning approximately 10%. Much of this reduction in risk =
is due=20
            to the fact that MLPs get paid for the volume that passes =
through=20
            their systems. They never actually take ownership of the =
products=20
            shipped and, therefore, are not directly affected by =
commodity=20
            prices. Because of this fact, MLPs tend to have predictable =
and=20
            stable cash flows which are past on to investors in the form =
of=20
            distributions.</P>
            <P class=3DmainParagraph>Schulte=92s=92 visit was a great =
learning=20
            experience for the class. He thoroughly demonstrated to the =
class an=20
            alternative way to invest in MLPs and further diversify our=20
            portfolio. Together, TYY and TYG make up approximately 2.4% =
of the=20
            APM portfolio. </P>
            <P class=3DmainParagraph>We are also pleased to announce =
that=20
            <STRONG>Jamie Melzer</STRONG>, Spring 2005 APM student and =
current=20
            TA, has been an intern at Tortoise since June 2005.</P>
            <P class=3DmainParagraph><BR><SPAN class=3DmainHeading><A=20
            name=3Dberges></A>Marcey Berges- Jayhawk Capital =
visit</SPAN></P>
            <P class=3DmainParagraph><SPAN class=3Dauthor>By Group 3: =
Hunter Davis,=20
            Kyle Bateman, Rex Reinhardt</SPAN></P>
            <P class=3DmainParagraph><STRONG>Marcey Berges</STRONG>, CFO =
of=20
            Jayhawk Capital and APM alumna, visited the class on =
November 14 to=20
            speak about the mechanics of hedge funds as well as those =
aspects=20
            specific to Jayhawk Capital. First Ms. Berges opened the =
class to a=20
            general discussion about how hedge funds operate, including =
SEC=20
            requirements and regulations, fee structures, and investing=20
            strategies. </P>
            <P class=3DmainParagraph>She then shifted focus to the =
specifics of=20
            Jayhawk Capital. Although Jayhawk does not disclose any =
detailed=20
            information about portfolio holdings to its 150 investors or =
to the=20
            public, Ms. Berges did divulge that 70% of its funds are =
managed=20
            directly by Jayhawk personnel, with the remaining 30% by =
other=20
            select money managers. She also noted that the fund =
especially=20
            emphasized tax efficiency. Providing insight into daily =
operations=20
            at a hedge fund, Ms. Berges was blunt in admitting the =
particularly=20
            long and hard hours required, but also noted that her career =
was=20
            full of excitement and diversity.</P>
            <P class=3DmainHeading><A name=3DCERN></A>Stock Blog: Cerner =
Corporation=20
            (CERN)</P>
            <P class=3Dauthor>By Group 5: Charles Collier, Jonathan =
Cooley and=20
            Alexandra Fitzke</P>
            <P class=3DmainParagraph>On November 7, <STRONG>Allen =
Kells</STRONG>,=20
            Cerner=92s IR director, visited the Applied Portfolio =
Management class=20
            to talk about his company. He addressed such issues as =
government=20
            support for increased IT solutions in the healthcare =
industry and=20
            industry growth. Kells noted that the company=92s growth =
prospects are=20
            excellent as the healthcare industry explodes. Students=92 =
impressions=20
            were that Cerner has only begun to scratch the surface of =
its key=20
            markets.</P>
            <P class=3DmainParagraph><SPAN class=3DmainParagraph>Fueled =
by=20
            impressive third quarter results, Cerner=92s stock price =
increased=20
            over the last three months by approximately 12% to $95.15 as =
of=20
            December 7, 2005. For the third quarter 2005, revenues =
increased 28%=20
            year over year. Cerner should continue to experience rapid =
growth in=20
            the future due to the demographics in America. As the graph =
below=20
            shows, America=92s population is aging and will be in need =
of more=20
            efficient healthcare systems. Cerner will be in a prime =
position to=20
            provide those systems. </SPAN></P>
            <P></P>
            <P class=3DmainHeading align=3Dleft><A =
name=3Dblurb></A>Stock Updates </P>
            <P class=3Dauthor align=3Dleft>By Group 2: Matt Berger, Dan =
Hearshman,=20
            Matt Johnson, and Grant Miner </P>
            <P class=3DmainParagraph align=3Dleft><STRONG>NIC, Inc.=20
            (EGOV)<STRONG><STRONG><STRONG><STRONG><IMG height=3D71 =
hspace=3D4=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q4-05_newsletter/egov_logo.=
gif"=20
            width=3D196 align=3Dright=20
            border=3D1></STRONG></STRONG></STRONG></STRONG></STRONG></P>
            <P class=3DmainParagraph>NIC, Inc. provides eGovernment =
services to=20
            federal, state, and=20
            loca<STRONG></STRONG>l<STRONG><STRONG></STRONG></STRONG> =
governments=20
            in the United States. Founded in 1991 and headquartered in=20
            Olathe,<STRONG></STRONG> KS, NIC=92s main business is portal =

            outsourcing, in which it enters into contracts to design, =
build, and=20
            operate Web-based portals. =
NIC<STRONG><STRONG></STRONG></STRONG>=20
            currently has 18 states under contract. </P>
            <P class=3DmainParagraph>On October 3, <STRONG>Steve =
Kovzan</STRONG>,=20
            VP of Finance at NIC, Inc., gave the company=92s <BR>=93road =
show=20
            presentation=94 to the APM class. Mr. Kovzan spoke =
confidently about=20
            NIC=92s growth prospects, pointing to the market opportunity =
in the=20
            remaining 33 states. He also suggested that non-DMV =
transactions=20
            would be a major growth driver going forward.</P>
            <P><SPAN class=3DmainParagraph>APM purchased 1500 shares of =
NIC at=20
            $4.18 this past May on a recommendation from a Spring 2005 =
student=20
            presentation. The stock traded at $6.10 as of December 9, =
2005,=20
            representing an unrecognized gain of 42.5%.</SPAN></P>
            <P><BR><SPAN class=3DmainParagraph><STRONG>Joseph A. Banks =
(JOSB)=20
            <STRONG><IMG height=3D121 hspace=3D5=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q4-05_newsletter/josb_logo.=
jpg"=20
            width=3D143 align=3Dright></STRONG></STRONG></SPAN><SPAN=20
            class=3DmainParagraph></SPAN>=20
            <P class=3DmainParagraph>APM sold the remaining 350 shares =
of JOS A.=20
            Bank Clothiers, Inc. at $48/share on November 21, 2005 on =
the=20
            recommendation of <STRONG>Jim MacMurray</STRONG>, alumnus =
stock=20
            mentor. APM=92s original position was taken in Fall 2001 and =
has been=20
            bought and sold several times, as the stock has become =
undervalued=20
            and overvalued respectively. This particular holding had =
been in the=20
            portfolio since November 20, 2003. Since then JOSB has =
performed=20
            quite well for the portfolio as it was up 104% on the year =
and 181%=20
            from November 2003. The effective annual return on JOSB has =
been 68%=20
            <BR></P>
            <P class=3DmainHeading align=3Dleft><A =
name=3Dperform></A><SPAN=20
            class=3DmainHeading>APM Portfolio Crosses $1M =
mark.</SPAN></P>
            <P class=3DmainParagraph align=3Dleft>The APM portfolio =
finished the=20
            year at $1,070,033, up from $826,004 at the beginning of =
2005.=20
            Crossing the $1 million mark was a major highlight of the =
year. We=20
            have many students, speakers, alums, friends, and mentors to =
thank=20
            for getting us to this point. The class benefits from so =
many of you=20
            willing to share your time, ideas, and even jobs.The =
portfolio=20
            benefits from your intellectual input and from your direct =
financial=20
            support. </P>
            <P class=3DmainParagraph>The biggest 2005 winners were Jos. =
A Bank=20
            Clothiers Inc. (JOSB), Valero (VLO), and Golden Meditech =
(HK:8180).=20
            Valero first entered the portfolio in 2002 on the =
recommendation of=20
            Robert Tracy. We realized profits on part of our position as =
VLO has=20
            been up 144% in 2005. Our effective annual return on Valero =
has been=20
            29%. Golden Meditech is a new holding that trades on the =
Hong Kong=20
            GEM exchange. We initally bought Golden Meditech in July, =
2005 at=20
            0.14 USD. Currently Golden Meditech is trading at 0.26 USD. =
Our=20
            holding period return has been 40%. </P>
            <P class=3DmainParagraph>Some long-term holdings that we =
sold in 2005=20
            were Western Wireless - 160% annual return; American Italian =
Pasta -=20
            11% annual return; M&amp;F Worldwide - 21% annual return; =
Novastar=20
            Financial - 49% annual return; and America Service Group - =
75%=20
            annual return.</P>
            <P class=3DmainParagraph>Some new additions in the 4th =
quarter of 2005=20
            were Winnebago (WGO) recommended by <STRONG>Mark =
Whitaker</STRONG>,=20
            Montpelier Reinsurance (MRH) recommended by F05 Group 3, and =

            Anheuser-Busch (BUD) recommended by F05 Group 6. We also =
entered=20
            into a synthetic short position on KFX with a short call and =
a long=20
            put suggested by Professor <STRONG>Paul Koch</STRONG>. </P>
            <P class=3DmainParagraph>For a full summary of the 2005 =
performance of=20
            all of the portfolio holdings see this <A=20
            title=3D"2005 APM Performance"=20
            =
href=3D"http://www2.business.ku.edu/apm/portfolio/2005Performance.pdf"=20
            target=3D_blank>special report</A>.</P>
            <P><IMG height=3D303=20
            =
src=3D"http://www2.business.ku.edu/apm/images/q4-05_newsletter/apm_chart.=
jpg"=20
            width=3D541></P>
            <P class=3DmainHeading><A name=3Dalums></A>Alumni News </P>
            <P class=3DmainParagraph><STRONG>Megan Wood </STRONG>(APM =
S05)=20
            recently accepted a position at LaSalle Bank in Chicago in =
the=20
            Capital Markets Program.</P>
            <P class=3DmainParagraph><STRONG>Jamie Melzer </STRONG>(APM =
S05)=20
            accepted a position with Jeffrey Williams &amp; Co. in New =
York.=20
</P>
            <P class=3DmainParagraph><STRONG>Tim Burger</STRONG> (APM =
S05)=20
            accepted a position in Kansas City with UMB.</P>
            <P class=3DmainParagraph><STRONG>Jason Riley </STRONG>(APM =
F04) has=20
            moved to a corporate finance position with Sabre Holdings in =

            Southlake, Tx. </P>
            <P class=3DmainParagraph><STRONG>Alums send us your news!=20
</STRONG></P>
            <P class=3DmainParagraph>&nbsp;</P>
            <P class=3DmainParagraph><SPAN class=3DmainHeading><A=20
            name=3Ddonors></A>Thanks to all our 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>Brianna Kelly </SPAN></TD>
                <TD><SPAN class=3Ddonor>Brandon Turner=20
            </SPAN></TD></TR></TBODY></TABLE>
            <P class=3DmainParagraph><A name=3Dcontribute></A>If you =
would like to=20
            donate, Kent is matching alumni donations 2:1 and all other =
1:1.=20
            Send your contributions to <BR><BR><SPAN =
class=3Dsmalltext>School of=20
            Business Endowment<BR>Applied Portfolio Management<BR>c/o =
Gregory J.=20
            Lamb <BR>KU School of Business<BR>1300 Sunnyside =
Avenue<BR>Lawrence,=20
            Kansas 66045-7585</SPAN></P>
            <P class=3DmainParagraph>&nbsp;</P>
            <P=20
        class=3DmainParagraph><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 =
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------=_NextPart_000_0080_01C7EBDB.A832DFA0
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

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}
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}
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}
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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
}
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url(rightpane.gif); BORDER-LEFT: #666666 1px solid; BACKGROUND-REPEAT: =
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}
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}
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A:link {
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}
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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}
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}
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}
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}
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}
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}
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}
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underline
}
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COLOR: #000066; TEXT-INDENT: 5em; PADDING-TOP: 1px; FONT-FAMILY: Tahoma, =
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}
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}
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}
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}
A.smallpurplelink:hover {
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}
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Arial
}
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}
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}
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}
.researchlist {
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Verdana, Tahoma, Arial, sans-serif; HEIGHT: auto; TEXT-ALIGN: left
}

------=_NextPart_000_0080_01C7EBDB.A832DFA0--
