Sold O’Reilly Automotive

Reluctantly, we sold ORLY and redeployed the cash. It has been a good performer but we needed to reduce the number of stocks in the portfolio (moving torward a total of 20 stocks). Although ORLY remains a quality company, the project average return dropped to 7.5%. We have replaced it with a stock of comparable quality and higher return.

Company Description: O’Reilly Automotive, Inc. supplies automotive aftermarket parts, tools, equipment, and accessories to both “do-it yourself” customers and professional mechanics or service technicians. Operates stores in Texas, Missouri, Oklahoma, Kansas, Iowa, Arkansas, Louisiana, Nebraska, and Illinois. Acquired Hi-Lo Automotive, 1/98. Has 1,132 stores (3/04), about 12,635 employees, and 26,300 stockholders. Directors and Executive Officers own 11.1% of common stock; Wasatch Advisors, 12.4%; T. Rowe Price and Associates, 9.2% (3/04 Proxy). Chairman: Charles O’Reilly, Jr. President and Chief Executive Officer: David E. O’Reilly. Incorporated: MO. Address: 233 South Patterson, Springfield, MO 65801. Telephone: 417-862-6708. Internet: www.oreillyauto.com.