Home » Writings and Commentary » Onyx Report Touring 2006


T S, I N C.


G, 2 0 0 6






870,520 MILES

999,870,520 MILES



INVESTOR MEETING: July 15, 2006, 7p.m.
at 111 West Jackson – Suite 1108








to those that chose to ride from Day One.


to those that chose to follow another route.


both parties, ‘this’ would be nothing.


will continue to motivate.













The Money 8



Conclusions 23



Appendix 27

















I. Philosophies

















June 30, 2006






Your chairman has maintained a strong affinity, if not an
obsession for both physical and capital infrastructure since childhood. I continue
to marvel in awe with respect to the manner in which people, goods, and
services seamlessly orchestrate movements from corner to corner of the
universe. How does one navigate from Dayton, Ohio to Naples, Florida? How does
Iranian crude oil extract itself from rock formations thousands of feet
underground and move into the combustion chambers of Boston commuters? How is
it that wages earned by laborers toiling on an Idaho ranch recycle themselves
into tax dollars, steel, and concrete?


Indeed the transport and transfer of production, capital,
and wealth is breathtaking.


The process is nearly so complete that the infrastructure
goes largely unnoticed to the individual. The strengths of this well-oiled
machine are taken for granted, particularly during times of prosperity. It is
the free market competition to satiate supply and demand which enables the
invisible hand of Adam Smith to pave the way. The fact that accidents, or
financial meltdowns do not occur with greater frequency is a testament to the
viability of the system.


Although we respect the status quo, do not confuse reverence
for naiveté. We are well aware of the negative byproducts of capital markets:
social stratification, mania, greed, and inevitable bust. These are issues that
we have touched upon briefly with prior writings, but believe to be subjects
beyond the scope of our message. As our evolution as a corporate entity
demonstrates, we operate within the system to manufacture our ends as true


Let us delve further into our presentation of the parallels
of transportation and capital infrastructure. At minimum, transportation
enables matter to fulfill needs. Amoeba float towards nutrients, livestock roam
the prairie to graze, and individuals encircle the globe seeking the most
permitting situation for survival. As societies organize, capital provides the
framework that promotes transport through a plethora a barriers. These are the
stories of Horatio Alger, Madame C.J. Walker, Robert Johnson, Rockefeller, and
Carnegie. These are the stories of everyday, working-class people that have
tapped capital markets in order to fund educations, homes, and retirements.


Blessed is he whom is able to globetrot across oceans,
traverse rugged mountains, navigate scorching desert, and bridge daunting
waterways. Not only has advancement and engineering created adequate
infrastructure to facilitate the transport of the individual, but the theme of
equity capital has constructed an infinite amount of links and crossings so
that one may master his universe without exerting one iota of physical


As we shall demonstrate, access to capital is the
possibility to control real estate, oil platforms, storefronts, software,
packages, and media separated by thousands of miles from the comfort of one’s
very own home. Indeed, the dual engines of transport and capital infrastructure
provide access to materials which enable the individual to construct a legacy
that will stand the test of time.


Of course, progress is manifested by the advancement of the
aggregate, rather than the achievements of one individual.


Amazing, is the fact that the human race may dominate
without superior, size, speed, grace, or strength. Domination is achieved by
establishing one’s position as the most intelligent animal.


Such is the manner in which we choose to operate.


This is equally a philosophical endeavor as it is an
exercise of wealth creation. We do not create with the intention of introducing
radical thoughts, nor do we wish to structure a platform in which to deliver
propaganda. We present in a manner that the casual reader may ascertain our
thought process and business maxims without an avalanche of jargon.


We select an image as the standard bearer to this report
that initially appears to have been presented without merit. Recognizing our
preceding discourse, the Interstate 94 shield gracing the cover collects some
degree of symbolism. With the following analysis, the 94 shield is nothing
short of essential.


Of course, ONYX INVESTMENTS, INCORPORATED is headquartered
in Chicago, Illinois. I-94 is both a critical route throughout Chicagoland and
a vital link accommodating traffic throughout the industrial Upper Midwest. The
route traces its beginnings as an expressway connecting the war-time
manufacturing centers of Ypsilanti, Michigan to a stable base of Detroit labor.
Ironically, a brief review of the spending habits of this company and chairman
represent our own version of mobilization: our war chest is built from cash and
stock. We ration capital in order to prepare for the inevitable skirmishes of
market downturns—the inevitable economic warfare of recession and bust.


Military analogies aside, we recognize that the efficient
navigation of the area without utilizing the route is impossible. Interstate 94
designates a ribbon of asphalt that not only serves as the vital artery of
Detroit, Chicago, Milwaukee, and The Twin Cities, but straddles numerous routes
into the Eastern Seaboard and Deep South. Of course, this commonality has
calmed the nerves of many a lost traveler upon the sight of ‘I-94’ reassurance
signage. Contrary to the infinite value accorded courtesy of the road,
motorists may tour 94 free of charge, with the exception of The Tri-State
Tollway from Lake-Cook to the Wisconsin line.


In like manner, we endeavor to represent an indispensable
link between the client and his financial goals; the individual and his needs.
In like manner, we endeavor to represent a shield of reassurance, maintaining a
regular pattern of value oriented management throughout any and all
macroeconomic conditions. However, in variance to the 94 Freeway, access to this
highway may only come with a price.


As we undertake the presentation of our portfolio, readers
may note that we have begun the process of constructing a toll road which is
impossible to circumvent. We may describe ourselves as booth operators,
collecting payments along principal arteries of capital-traffic: energy,
insurance, electronics, consumer staples, industrials, footwear, housing, and
logistics. Payment is mandatory.


What academics may deem to be ‘diversification,’ we describe
as an omnipresent toll road.


Alarmingly for those that have balked, or submitted to a
mere patronizing utilization of our services, our toll road cannot be avoided.
Although the on-ramps are infinite, this expressway has been built without
exits. In fact, our Capital Expressway is an essential route for those in which
we have yet to make an acquaintance. We collect small tolls on unfathomable
amounts of gasoline burned, soft drinks consumed, materials shipped, homes
purchased, and electrical gadgetry enjoyed. Again, avoidance is only to the detriment
of one’s convenience.


At the time of this writing, Interstates 90 and 94 (Dan Ryan)
are undergoing a massive reconstruction project. Work has been scheduled to
improve access ramps, surfacing, and overall traffic flow. Construction along
the most vital link in the Chicago transportation network has not only snarled
traffic along the corridor, but disrupted patterns along a number of alternate
routes. The increased congestion of parallel thoroughfares is quite noticeable,
with vehicle counts doubling from Stony Island to Lake Shore. Also, veterans of
public transportation have become cranky, inconvenienced by the influx of rider
ship along the Chicago Transit Authority and Metra commuter trains.


Perhaps the gross upheaval is simply punishment for decades
of neglect. The Dan Ryan has carried a level of traffic exceeding multiples of
capacity over the course of twenty years with minimal maintenance.


Lessons learned from the observation of a roadway project
are par for the course for both prudent money management and a productive life
outlook: the perpetual thirst for improvement, the maddening phenomenon in
which the neglect or ignorance of a particular area always debilitates the
functioning of others, and lastly, the fact that the situation must often
worsen before one may prosper.


We heed these maxims as we acquire knowledge of all
financial instruments in order to capitalize upon their respective strengths
and weaknesses in the name of diversification. We heed these maxims so that our
conviction may be galvanized during the inevitable storms of business and
market turbulence.


Like every tangible creation of mankind, the highway is not
perfection. The quirks of the system are numerous to the careful observer: East
and West signage of The Edens / Kennedy / Ryan / Ford which clearly track a
north and south orientation through The Windy City; the maddening dual-plex of
the Virginia panhandle, where drivers apparently are traveling north and south
simultaneously along I-77 / 81; the disappearance of I-95 in Central New
Jersey; the lack of a decent connection from Jersey across lower Manhattan into
Long Island; and the ‘Not in my Backyard’ mentality of Baltimore-Washington
which has stalled the interstate system of the area in a phase of immaturity.
Both cities carry a famous tendency to abandon major projects, characterized by
the ‘ghost’ ramps to nowhere of Baltimore, Maryland.


Whereas contrary signage and gaps within the transportation
network are rarities, explicit directives concerning financials are
nonexistent. There are no highway posts telegraphing which investments should
be purchased. There are no mile markers designating the distance from a
fruitful retirement. There are no lane markings, traffic signals, and guard
rails representing the boundaries of perfectly efficient money management.
There is no formulaic route of magic traversing the landscape as both systems are
incomplete due to both human error and necessity.


Similar to capital, the road may exacerbate fear, greed,
mania, and division. We require no further evidence than 94’s Detroit, St.
Joseph / Benton Harbor, Gary, and Chicago. The story has been repeated time and
time again throughout the industrial Mid West—the rise and fall of
manufacturing and labor. The Gilded Age initiated the boom, with industry
flocking to the area, attracted to its waterways, resources, and hub-like
logistics. Labor followed, cajoled by the job creation and stability of
America’s workshop. As protectionism declined during a period of relative
international stability, competition intensified and manufacturing
opportunities migrated overseas. The proud Steel Belt has oxidized into Rust;
the deterioration blatant from Pittsburgh to St. Louis.


For example, the freeway system has indirectly ushered
forward the decline of the city of Detroit. The powerful Big Three comprised of
Chrysler, Ford, and General Motors effectively christened The Motor City as the
birthplace of suburban sprawl. Obviously, automotive executives strove to
expand the market and sought to fortify a presence. Lawmakers, coddled by the
industry conveniently ignored the concept of mass transportation, constructing
an over-built network of spaghetti-like tangles of road. To this day,
attempting to navigate The Motor City without a vehicle is laughable—public
transportation in Southeast Michigan is an utter farce.


As manufacturing declined, well-heeled residents fled,
utilizing the freeway to abandon the city. Commuters from Pontiac to Allen Park
could jet set around the region along the Chrysler, Southfield, and Fisher.
Commercial inner city boulevards and areas such as Woodward from downtown to 8
Mile became useless albatrosses in terms of moving traffic and were
consequently economically, politically, and socially devastated. Sociologists
refer to the phenomenon as ‘white flight.’ Regardless of racial demographics,
the capital flight has been immeasurable.


The transfer of wealth accommodated by the freeway resembles
that of capital markets. Suburban Oakland County, Michigan represents one of
the nation’s wealthiest enclaves—the city of Detroit, a textbook example of
urban blight. Capital markets are brutal— constantly rewarding strategic
ownership with greener pastures, while systematically obliterating the debtor.


We identify strategic ownership and the term ‘assets’ with
the slimmest of definitions. Assets represent only those items purchased
demonstrating a realistic opportunity for capital appreciation. Ownership
produces income in the form of regular payments or deferred capital gains.
These are items in which owners are entitled to collect income merely for the
execution of the transaction. Wealth is transferred from the consumer-debtor,
to the owner.


The debtor owns little to nothing. Ironically, he has been
conditioned to appraise capital markets with suspicion. He fears the loss of
investment capital, yet continues to purchase material items that guarantee
losses. At the point of sale, vehicles often depreciate by 30%, clothing
depreciates to nil, and the value of electronics nearly vanishes. Rare is the
investment that will collapse towards zero the moment of purchase. An
investment guaranteed to depreciate is nonexistent.


The debtor labors for the investor. He toils at the
workplace to generate income for bondholders and shareholders alike. His
consumption habits also act to line the pockets of stakeholders. Monies spent
on gasoline, entertainment, and services flow back to the investor in the form
of income and capital appreciation.


The consumer-debtor may find himself struggling within a
value trap of his own creation. The value trap on Wall Street describes an
investment which may appear to be a bargain, but in reality is a black hole of
future losses. Shoppers often claim that an item has been purchased ‘on sale,’
casually neglecting the idea that monies have still been spent.


Utilizing nominal price as the sole determination of value
is a dangerous precept. Price, without background means nothing. In the
investment realm, share price is arbitrary. We may demonstrate in the following
section the fact that stock priced at over $3,000 per share is a tremendous
value relative to stock priced in the $30 range. Obviously, opportunity cost,
time value of money, and a mechanical understanding of percentages must take
precedent over ‘price’ with every transaction.


For the sake of simplicity, we present a vehicle priced at
$30,000 with a corresponding monthly payment of $500 over five years. Although
the item may be priced at $30,000, the value of the durable good is indeed
larger. $500 invested monthly at 12% yields $41,243.18 over the course of five
years. Going forward, the lump sum of $41,243.18 generating historical returns
morphs into $449,243.55 over twenty years. The hapless consumer has destroyed
nearly half of one million dollars for a liability, masquerading as an ‘asset’
that will eventually depreciate into scrap metal. Discovering additional
insult, our scenario has not factored the outflows of interest payments
concerning the vehicle.


Presenting the consumer-debtor with an investment agreement,
featuring a $500 monthly commitment and duration of five years may represent an
invitation for ridicule. Of course, the material buyer will forge ahead with
the vehicle purchase without a second thought of true opportunity cost.


Certainly, shareholders will gladly accept payment,
reinvesting monies from the consumer’s pocket back into the system.


The numbers do not lie. Misinterpretation is the difference
maker and a lack of respect for the percentages leads to self sabotage. We
maintain a contradictory presence within two worlds: as financial advisors, the
ignorance concerning ‘price’ and ‘value’ is perturbing to the point of disgust;
as investors, this ignorance is the fundamental basis of suppressed snickering
in public and slaphappy guffawing behind closed doors. The mission of smart
money is to exploit this price / value differential.


We define opportunity cost as the value of what one has
forsaken by the execution of a particular transaction. Under our prior example,
we presented the sticker-price of a vehicle to be $30,000—opportunity cost
approaching $500,000.


Although the systematic valuation of opportunity cost is an
inexact science, we must always respect the idea. The compilation of minute
transactions will determine the location of millions of dollars of wealth in
the aggregate. Investing is a process in which a few timely decisions may
manifest themselves into enormous wealth, while a number of missteps lead to
mediocrity, or at worst, ruin. The game is far from easy.


At this point, our rationale to exercise discretion and
restraint should be obvious. As stewards of capital and information, our chief
responsibility is to protect the interests of shareholders. Discretion enables
the company the ability to minimize competition while preserving investor
privacy. However, we respect our responsibility to present adequate information
that enables stakeholders and prospective partners to perform rational


Without question, the most vital section of this report
follows. Subsequent information is indeed powerful and its misuse may lead to
frustration and the loss of value. Yes, we are gatekeepers, often protecting
the client from his own self.


In other words, do not try this at home.
















II. The Money





Without further ado, we present the capitalization of ONYX






ExxonMobil Corporation



Best Buy Company,
Incorporated (BBY)



Minnesota Mining and
Manufacturing (MMM)



Berkshire Hathaway Class B



United Parcel Service, Inc.
Class B (UPS)



Federal National Mortgage
Assn. (FNM)



Coca Cola Company (KO)



Nike Incorporated Class B



Electronic Arts (ERTS)



Danaher Corporation (DHR)



Starbucks Corporation






Total Equities



Cash, Cash Equivalents
Available for Withdrawal






The preceding may be supplemented by items under the title
‘Kofi Bofah.’ Although the following positions remain outside of our corporate
umbrella, the delineation between the chairman and the company is blurry as
‘Kofi Bofah’ and ONYX INVESTMENTS, INCORPORATED may be perceived as
interchangeable. In order to maintain some semblance of executive privacy,
positions are listed in order of importance and valuations are conservatively
estimated in the aggregate. Personal holdings within ONYX have not been
itemized so as to avoid a ‘double count’ in capitalization amongst the two




Relative Value





ExxonMobil Corporation

Increasingly Adequate


5— S. Drexel Blvd.

Increasingly Adequate


Furnishings and Equipment



Cash and Cash Equivalents



2002 BMW 325i, 5 Speed,
60,000 miles

Depreciating Towards Nil






Approaching $100,000

Juxtaposition of the entities ‘Kofi Bofah’ and ONYX
INVESTMENTS, INC. is far from black and white, the separation may be described
best as a gray area. First and foremost, the idea of corporate immunity has
become a mirage at the executive level. The verdicts of prior litigation
demonstrate that no shield exists protecting the assets of upper management
from the outcome.


I recognize the status quo and am willing to pledge the
capital titled ‘Kofi Bofah’ to stem any crisis in liquidity.


In addition to ignoring this transparent corporate
‘barrier,’ the purchase of real property is an issue in which the idea of title
may become hazy. Computing equipment, office furnishings, and literature have
been bought with both cash and credit under the name of ‘Kofi Bofah.’ These
items could be pledged to the corporation in exchange for additional shares and
a larger stake in the business granted to ‘Kofi Bofah.’


Although the purchases have been executed for business
purposes, I have decided to maintain title of these items under ‘Kofi Bofah’
for a number of reasons. Business merchandise was purchased at the time that I
sought approval for the corporation from the Illinois Secretary of State.
Articles of incorporation for ‘ONYX INVESTMENTS’ were nonexistent during the
period. The paperwork essential to establish banking accounts was in transition
from Chicago to Springfield. Hence, the bulk, if not all start-up costs were
charged to ‘Kofi Bofah,’ not shareholder equity.


This is not a charity and I do not work for free. I
recognize that in the event of complete meltdown, shareholders would attempt to
lay claim to all assets under my possession regardless of title, leaving me
with little more than my under garments. Obviously, the documentation of assets
acquired with the intention of facilitating business is necessary.


However, the difficulty lies in valuation. Whereas millions
of individuals appraise the value of stock every second, the worth of illiquid
items such as furniture and technology is difficult to quantify with precision.
We wish to present a capitalization of the company that is without bias and
have omitted these durable goods from the ONYX balance sheet for this very


The past is often an inadequate basis for the future.
Capital goods purchased under ‘Kofi Bofah’ throughout the lifetime of the
business may be exchanged for shareholder equity going forward. Real property
or capital improvements may be purchased with funds drawn from ONYX
INVESTMENTS, INC and will be listed as shareholder equity capitalization as
conditions merit.


We are hopeful that the general onlooker may judge our
statistics to be satisfactory. Perhaps two camps will emerge. One camp will
remain stunned by the apparent lack of resources. One camp will remain stunned
by the apparent overabundance of resources.


We will address these camps with the following.

The above information does not account for separate accounts
managed by the enterprise. Although these separate accounts are invested in
similar fashion to the above, we have created a barrier between what we deem to
be longer term equity and larger amounts of funds which may be short term. We
do so for the purposes of liquidity, control, and taxation. Large outflows of
capital would be debilitating to investor psychology and sentiment. Hence, we
wish to only present positions which are relatively stable. Individuals whom
have and will enter into agreements to maintain separately managed accounts may
review their positions on a case by case basis. We will refrain from the
inclusion of these accounts as shareholder equity.


Recognize that the birth date of your chairman is May 12th,
1980. Obviously, having recently turned twenty-six, the role of the ally of
time in the process of wealth creation has been minimal. Strife, terrorism,
bust, and recession have been the hallmark during the majority of my working
years. September 11th, a collapsing technology sector, the painful
2000-2002 bear market, and a searing recession mark the timeline of my
ascension from wages to salary to commissions to Founder and Chairman. Of
course, we are not ones to manufacture excuses, but critics must appreciate the
reality. United States stocks have produced nothing during the current decade
and skyrocketing real estate has limited the options of decent, affordable
housing. In spite of limited growth in the aggregate, the environment has
become increasingly inflationary.


Establishing oneself as a young adult has never been more
difficult in the modern era.


The youth of the chairman aside, as we transcend the
start-up phase, the bulk of resources have been allocated towards efficient
execution, compliance, and research. At this stage, the foundation is
all-important, expansion being secondary. It is not the amount of our
capitalization which matters, rather the allocation of that capital that is the
key driver. We shun ramshackle growth simply for the sake of growth and have in
fact rejected more inflows than we have allowed. As a private enterprise, we
reserve the right to accept, reject, and return funds for whatever reason.
Regardless of amount, we deem particular types of personalities and monies to
be detrimental to the health of the firm.


We reserve the right to close accounts without explanation
and will continue to prune.


In spite of careful screening of the legitimacy of long term
investment capital, redemptions can and will occur without warning. Experience
has taught us the unhappy lesson that growing an investment vehicle while satisfying
redemptions and dealing with a listless market is comparable to slogging
through quicksand.

With the above in mind, perhaps our presentation maybe
perceived as remarkable. Addressing those that may have been dubious towards
our competence, we expend little energy upon counter-attack. Most likely, those
whom may be critical have invested nothing, or little more than a patronizing
pittance. Individuals must take heed that one’s reality is far from
all-inclusive. Simply because one has produced a dismal personal investment
record, or engaged in foolery at a young age does not require us all to do so.


One must never underestimate his contemporaries.


We did not incorporate in order to play games, nor are we
anxious to begin celebrating every small victory. Stakeholders must recognize
that management (of one) is far from satiated. As the cover page and basic
arithmetic indicate, comfort will be achieved with a capitalization of
$1,000,000. The ultimate goal of controlling one billion dollars may consume a


We are not in the business of providing stock tips. Equities
presented within the portfolio do no signal the endorsement of the position as
a legitimate option for the individual investor. In the spirit of
diversification, we strongly advise against the purchase of these securities
for one’s individual account. Inevitable downturns in the particular stock will
present an alarming quagmire as both the separate portfolio of the investor and
his ONYX stake may plunge into the red.


Although the company promotes the long term ownership of
businesses, the firm has and will engage in shorter term trading
activities as conditions merit. The portfolio is constantly in flux, running
the gamut from a zero equity policy, shunning stocks; to embracing markets with
full investment. We will not telegraph any specific investment program.


The portfolio has remained concentrated, with equities held
at any one moment ranging from two to eleven. In total, we have held stakes in
thirteen different businesses since our incorporation. Obviously, positions
will jostle amongst themselves in terms of size due to relative appreciation,
capital inflows, and sales.


As interest rates remain low by historical standards, we
maintain a negative bias towards fixed income and cash. The appearance of
larger levels of cash on the balance sheet of ONYX INVESTMENTS indicates
increasing bearishness towards stocks. Exceptional levels of cash are a useless
asset itemized under ‘Kofi Bofah.’ Certificates, treasuries, and investment
grade bonds do not offer competitive yields relative to the interest expense of
a thirty year mortgage.


The bank is shameful, aggressively peddling measly 2-4%
certificates to the customer, and recycling that capital into 6% mortgages and
13% revolving debt payments from the very same individual. The skullduggery is
certified with a wink towards colleagues following every Federal Reserve rate


Due to inflation, cash is death. Purchasing power is slashed
by nearly half every twenty years. As inflation intensifies, big business often
has difficulty transferring the increasing prices of materials into the market
and onto sales. Central Bankers must influence higher rates of interest in
order to reign in the economy and maintain price stability. Fixed income is
simply agonizing as interest rates rise and the investor is trapped with a
deteriorating asset that cannot compete with newer issues featuring higher
rates of interest. Rising interest rates eventually add to the costs of
borrowing, wrecking balance sheets and liquidity, crimping profits. Stock
market investing is nothing short of brutal during times of profit slowdowns.


Rip Van-Winkle is cognizant of the idea that inflation is on
the up-tick and the Federal Reserve Bank is predictably raising interest rates.
Although robust, corporate earnings represent the last shoe to drop.


In other words, pick your poison.


We will now undertake the task of presenting brief summaries
concerning our respective equities. Statistics are not to be mistaken for
indicators of performance; rather we present gauges of value.


XOM—ExxonMobil Corporation—Irving, Texas


$36,810 (600 Shares @ $61.35)

Price to Earnings: 10.47

Earnings Yield: 9.55%

Dividend Yield: 2.09%


ExxonMobil Corporation is the blue-ist of the blue chips,
the epitome of not only Big Oil, but Big Business. This is arguably the most
successful enterprise ever, rivaled only by General Electric in terms of
longevity as a mega cap. Boasting a market capitalization of $350 Billion, 2005
revenues of $370 Billion and a net income of $36 Billion, Exxon is Big


Of course, the numbers are gaudy, as the integrated oil
company is the largest publicly traded outfit in the world by several measures.
Employing approximately 85,000 employees, the efficiency of its labor pool
would overwhelm a substantial list of entire nations.


Indeed, John D. Rockefeller, superior dealmaker would be
proud of his creation. From the rise of Standard Oil, to its subsequent
breakup, to the reunion of Standard Oil of New Jersey (Exxon) and Standard Oil
of New York (Mobil), the company has maintained the qualities of its
exceptional founder: seamless integration, conservative financials, and
ruthless execution.


The 1999 merger of Exxon and Mobil Corporations has proven
to be an unparalleled coup, spearheaded by the legendary Lee Raymond during a
time of industry glut and depressed energy prices. With regards to the hundreds
of billions of dollars in shareholder wealth manufactured by the former
chairman, he may have earned every single penny of his $400 million retirement


Nonetheless, the firm has accepted the baton from Microsoft
and Wal*Mart as the most despised enterprise on the planet. The allegations of
price gouging, the swash-buckling disposition of the Texas oil man, the
enormous Lee Raymond retirement package, and the unapologetic ignorance of
global warming have only added to the backlash. Lawmakers continue to incite
the rage, agitating constituents with an all-to-convenient Big Oil scapegoat.


Irrespective of the glare, ExxonMobil shares represent the
most important position of ONYX INVESTMENTS. XOM has supplied the framework
under girding our road to riches. Not only has the company remained dominant in
terms of allocation and returns, but a significant portion of start-up capital
for this company was a product of liquidated Exxon shares originally purchased
by your chairman. Recognize that from start-up, ONYX has become a miniature
conglomerate in which no sector has maintained a greater impact than Big Oil.


XOM has generated both superior capital appreciation and
exceptional dividend income throughout our history. Our hefty Exxon position
demonstrates that we are far from timid in regards to allocating capital
towards attractive issues. We aggressively purchased the stock during 2004,
tapering off our commitments through 2005, particularly in the aftermath of
Katrina. During 2004, $50 oil was a novelty; during 2005-2006 $70 oil became
the expectation. The Oil game has become speculative and we fear that our best
investment may hinder future performance, succumbing to the past mania.


Ironically, Exxon stock is sputtering, perhaps shares have
run out of gas.


Featuring a price / earnings multiple of ten and a dividend
yield north of 2%, Exxon shares appear to be a compelling value. In terms of
price to earnings, XOM is a bargain, Fannie Mae representing the only other
equity of the portfolio which is cheaper. In reality, these attractive figures
may represent an investment boobie-trap.


Cyclical stocks, particularly those privy to the boom and
bust of a certain commodity trade in patterns which are contrary to textbook
investing. Typically, low price earnings ratios indicate value. Obviously,
purchasing stock for $9 per every $1 of earnings is a greater bargain than a
similar investment charging $20 per every $1 of earnings. However, in the case
of cyclical issues, the opposite is true: exceptionally low price to earnings
ratios often indicate richly, if not overvalued stocks.


As earnings are the denominator, bloated profits increase
the divisor, presenting a price to earnings ratio which is irrationally low.
Although oil continues to stubbornly cling to $70 per barrel, deterioration or
even a collapse in price is to be expected. The laws of supply and demand
perpetuate a cycle of limited supply, high prices, reduced demand, bloated
supplies, reduced profits, and limited supply again. The cycle is one of
extreme volatility in the commodity arena where pricing power is nonexistent.


Although Exxon, British Petroleum, ChevronTexaco, Royal
Dutch, and the Organization of Petroleum Exporting Countries (OPEC) all may
generate headlines touting their perceived clout, it is impossible for any one
entity or group of entities to collude and control proven global crude oil
reserves north of 1 trillion barrels and demand exceeding 80 million barrels
per day.


Not even Rockefeller could introduce price stability to the
commodity during a time when it was assumed that Black Gold could only be
located in the hinterlands of Pennsylvania.


The beginning of the end of the commodity boom may culminate
with Exxon profits enduring a 50% reduction. All things being equal, the price
to earnings ratio would skyrocket north of 20—too rich of a price to pay for a
stodgy behemoth.


We recognized the risks and looked to build a supporting
cast around our star throughout the mania punctuated by Hurricane Season 2005.




BBY—Best Buy Company—Richfield, Minnesota


$13,710 (250 Shares @ $54.84)

Price to Earnings: 22.57

Earnings Yield: 4.43%

Dividend Yield: .73%


Perhaps there is a new Sherriff in town. 2006 has marked a
coming out party of sorts for the Minnesota retailer. In fact, returns have
easily outpaced ExxonMobil, with positions nearly doubling in value within the
past year. Returning a scintillating 240% over the past 40 months, BBY is no
stranger to success. In spite of its history as a story stock, we have been
pleasantly surprised that an equity purchased as a hedge to the downturn of
commodity markets was to perform with such brilliance. Our only regret being
that we did not subscribe to larger purchases.


Similar to the relationship of Shaquille O’Neal and recent
National Basketball Association Finals M.V.P. Dwyane Wade of the Miami Heat,
this new kid on the block refuses to accept defeat, rising to the occasion,
effectively neutralizing the tragic weaknesses of an aging superstar.


Best Buy has stabilized the portfolio upon the numerous
occasions in which Exxon has crumbled, falling victim to sagging oil prices.
Although BBY is far from the Oil giant in terms of stature, Best Buy has
carried the portfolio throughout 2006 as Wade has been the true driving force
of the Heat throughout the season.


Obviously, a bet on Best Buy is a bet on the consumer. The
consumer has demonstrated extraordinary resilience in spite of skyrocketing
energy costs, higher interest rates, and deteriorating real estate. The
American consumer, the champion of the world’s economy will never be defeated.


Patriotism and clichés aside, Best Buy continues to execute
as a Wall Street darling. The emergence of the company is nothing short of
extraordinary, from regional consumer electronics retailer, to the unquestioned
leader of the space. Best Buy has thoroughly thrashed rival Circuit City, with
Wal*Mart representing the only serious ‘competition.’


As Exxon may represent a value trap, Best Buy is the
inverse. The risk stems from the purchase of what has been viewed as a ‘growth’
enterprise while the company transitions into maturity. Growth stocks carry
rich premiums relative to earnings and are far from cheap. BBY trades at over
20x current earnings, meaning that investors literally must wait 20 years to
break even on the investment. The rationale is the possibility of future
earnings growth accelerating and creating value over time. As Wal*Mart and Microsoft
investors will attest, the danger is overpaying for an issue formerly noted for
its sprightly growth, but has matured into an aging, immobile, lumbering


This ‘growth trap’ is similar to offering a maximum contract
to the likes of Gary Payton—or even worse, the Michael Jordan debacle in


Although the dividend appears measly, executives have
demonstrated confidence in long term growth and continue to aggressively
increase the amount of capital returned to investors. Over time, current
purchases yielding scant dividend yields of .7% may evolve into lucrative
beneficiaries of dividend income north of 10% of invested capital, the result
of improved earnings.


Obviously, one does not purchase Best Buy for the dividend.
This is a growth stock, capital appreciation being the attraction.


MMM—Minnesota Mining and Manufacturing (3M)—St. Paul,


$10,661.64 (132 Shares @

Price to Earnings: 18.53

Earnings Yield: 5.40%

Dividend Yield: 2.28%


Characterized by stable cash flow, healthy dividends, and
adequate growth, the strong industrial is essential. Economically sensitive,
these stocks may move in tandem with the general outlook. Superior enterprises
continue to generate growth amongst periods of economic contraction and


Comparable industrial conglomerates include United
Technologies (UTX) and General Electric (GE). As UTX and GE have proven
formidable long term generators of shareholder wealth, our choice upon a
suitable equity to represent the sector presented intense difficulty. Of
course, the metric of value swung the decision in favor of the one-time
hardscrabble organization from the uncompromising Northern Minnesota Iron
Ranges. The selection has been vindicated as 3M has remained a leading
performer within the Dow Jones Industrials throughout.


General Electric has deteriorated from the nimble machine
led by Jack Welch, arguably designated as the superior manager of the era into,
an unwieldy behemoth unable to extract noticeable value from a $340 billion
capitalization. Although the stock touts an impressive dividend, we are
cautious of any enterprise heavily reliant upon financials within a challenging
interest rate environment. Intelligent money recognizes that GE Capital is
responsible for a significant slice of overall GE profit.


GE stock has been suffocated by confusion. Is General
Electric an industrial or a bank?


Although banking is essential to capitalism, investors may
note that we have shunned the sector. Essentially, financials profit by deftly
managing the yield curve or the interest rate differential across duration. For
instance, profits are magnified by borrowing over the short term at 3%, and
executing a long term loan at 7%. The ‘spread’ or net interest margin is 4%. As
the Fed continues to hike interest rates, short term rates have risen, while
long term rates have stagnated. The result is a ‘flattening’ of the yield curve
in which the interest rate differential over time is negligible. Fundamentally,
it is impossible to profit by borrowing funds at 5% and loaning those monies
out to capture 5%. Although surprisingly agile during the Fed’s tightening campaign,
the Citigroups, Merills, and Goldmans have all recently plunged
disproportionately—the victims of ‘hawkish’ Fed rhetoric. The Fed has signaled
its intent to facilitate price stability by continuing the upwards march of
interest rates.


General Electric stock has been brutalized. While the banks
marched higher, GE shares were held captive by an industrial bent. While the
industrials stabilized, General Electric has been trounced right along with the
banks. It has been the worst of both worlds since the departure of Welch for
hapless GE holders.


The retirement of Welch marks another avenue connecting our
purveyor of Scotch Tape, sandpaper, Post-Its, health care supplies, and
transportation materials to General Electric. Three candidates emerged to
replace the legend. While Jeffrey Immelt won the position, Bob Nardelli
defected to captain Home Depot, and James McNerney, formerly the head of GE
Aircraft Engines, abdicated to lead 3M.


McNerney was to eventually return to his aerospace roots and
exchange the title of 3M Chief Executive for that of Boeing. The resignation of
this respected gentleman initiated investor panic, creating a buying
opportunity in MMM shares. Wall Street was not pleased with management
back-peddling to fill a leadership void. The St. Paul conglomerate was to
select George Buckley, formerly of Brunswick, Corporation as successor. Mr.
Buckley has demonstrated staunch decision making, willing to shed underperforming
units, in order to bolster shareholder value.


Although McNerney may have been disheartened by losing the
battle over GE, he continues to win the war. Boeing and 3M stock have levitated
under his leadership, while shares led by his former rivals have imploded.


We will continue to monitor our MMM selection closely, as
the industrial sector presents several viable candidates for the slot.


BRK.B—Berkshire Hathaway, Incorporated Class B—Omaha,


$9,129 (3 Shares @ $3,043)

Price to Earnings: 17.59

Earnings Yield: 5.69%

Dividend Yield: Nil


Berkshire Hathaway is the investment vehicle of a genius—the
canvas of legendary Warren Buffet. With the exception of William Gates’
Microsoft money and Sam Walton’s Wal*Mart wealth, The Oracle of Omaha is second
to none in the order of this generation’s empire builders. He remains affixed
upon the pantheon of businesspersons and has built the bulk, if not all of his
fortune upon the mastery of equity markets. These facts alone should provide
adequate rationale for investment.


Essentially, Exxon has functioned as the catalyst to
strengthen our portfolio while the broader market is reeling due to rising oil
prices. Hedging our Exxon stock and the direction of crude oil prices are Best
Buy and The United Parcel Service. BRK is our last line of defense, providing a
margin of safety amongst periods of extreme systematic weakness, or brutal


Whereas the industrials, particularly General Electric tend
to ebb and flow with almost perfect correlation to the overall market and
economic outlook, Berkshire exhibits contrary tendencies. Berkshire Hathaway
and Warren Buffett are rough barometers for the level of speculation or fear
that may permeate the market.


Amongst times of irrational exuberance, Buffett’s investment
maxims centering on value are dismissed, Berkshire stock is dumped, and Buffett
rapidly fossilizes into an investment dinosaur. As speculators drive the market
higher, Berkshire critics emerge. Hot-shot money managers and thirsty
journalists are convinced that Buffett is finished. ‘Value’ is out and ‘growth’
is in because this time, things are different.


Berkshire Hathaway, capitalized at $140 Billion is a
conglomerate built from stodgy, old-line insurance, consumer goods, and
industrial enterprises. The company has exploded from a capitalization of
roughly $100,000 managed by a cheeky twenty six year old kid into a cash flow
juggernaut with significant stakes in slices of Americana: 151.6 million
shares, 12% or $7.8 billion of American Express; 43.8 million shares, 5.6% or
$1.8 billion of Anheuser Busch; 200 million shares, 8.4% or $8 billion of Coca
Cola; 100 million shares, 3% or $5.8 billion of Proctor and Gamble via
Gillette; 19.9 million shares, .5% or $933 million of Wal*Mart; and 95 million
shares, 5.7% or $6 billion of Wells Fargo. With the exception of Wal*Mart,
these positions have remained fixtures of the Berkshire portfolio for decades.


The roster of wholly owned subsidiaries is equally
conservative, yet impressive: GEICO, Fruit of the Loom, Dairy Queen, Shaw
Industries, McLane, Buffalo News, Nebraska Furniture Mart, See’s Candy, General
Re, and Scott Fetzer.


Whereas we depict ONYX INVESTMENTS as an omnipresent toll
road, Berkshire is Main Street, U.S.A. This is not the home of cutting edge
technology, cockamamie enterprises, initial public offerings, Google,
moneypit.com, gimmickry, or any exotic M.I.T. Geek algorithm trading
strategies. This is the home of insurance, candy, razors, shampoo, banking, and
furnishings. Buffett’s Main Street is not about ‘the next big thing,’ rather
the equity is a manifestation of the tried and true.


To critics, this is boring. Berkshire is some boring
company, run by some boring geezer, in some boring Midwest backwater cow-town.


Although 1999 was a banner year for stocks, the year
represents one of the worst periods in the history of Berkshire Hathaway.
Markets were gripped by mania, fueled by the arrival of a ‘New Economy’ and
stocks set records daily. Technology chiefs, bankers, and analysts meteorically
rose from obscurity and became rock-stars. Investors became inebriated with
risk: businesses exhibiting little chance for survival were the shares in high
demand. Investor psychology had been dominated by mob rule. The decision making
of otherwise intelligent men and women had degenerated beneath the logic of a
kindergartner. Perhaps the coup de grace was Corvis Corporation, an enterprise
which debuted as a publicly traded entity with $0 in revenues.


Buffett, was not convinced that ‘this time, things were
different’ and remained on the sidelines. Of course, his stock, reputation, and
supporters were hammered mercilessly.

Class B issues shed roughly $1000 per share amidst the peak
of the bull market.


Of course, the euphoria could not be sustained. Spring 2000
marked the beginning of the end, exposing the bull market as more smoke and
mirrors than real earnings. Executives were jailed, analysts ridiculed, and
‘New Economy’ businesses were abandoned. Technology stocks were devastated,
marked by the NASDAQ collapsing from a peak north of 5000 to lows south of
2000. The ensuing 2000-2002 bear market was nothing short of excruciating.
Speculators were routed— out of money and out of work. Berkshire stock began to
levitate through the malaise and Buffett was vindicated.


Berkshire Hathaway trades with negative correlation to the
vicissitudes of mania. Ominously for broad market investors, the stock has
remained mired in a tight range, through the majority of the past two years.
Ominously for broad market investors, roughly $40 Billion of cash remain on the
balance sheet. Buffett has complained of a lack of investment opportunities,
citing unrealistic asset valuations and is reluctant to allocate.


Money-changers take heed. Bets placed on an aggressive
investment program are bets placed against Buffett.


Are investors feeling lucky?


UPS—United Parcel Service, Incorporated Class B—Atlanta,


$8,233 (100 Shares @ $82.33)

Price to Earnings: 23

Earnings Yield: 4.35%

Dividend Yield: 1.85%


Essentially an airline stock, albeit an exceptionally
effective carrier. The United Parcel Service ranks as the ninth largest airline
globally in terms of the size of its airplane fleet. Contrary to the
misfortunes of the airlines, UPS is a profit machine and economic bellwether.


Packages do not need to be fed. Packages do not complain
about connecting flights. Packages do not require leg room and can be
transported within close quarters. Packages are ready to move anytime from


Benefits of moving cargo rather than people aside, the
company has the luxury of operating within an oligopoly in which the market is
dominated by only a few players. Federal Express, the United States Post
Office, and Germany’s Deutsche Post AG’s DHL control roughly 90% of the
overnight delivery business. The barriers to entry preventing legitimate
competition from entering the arena are nearly insurmountable. Establishing a
worldwide network with the ability to deliver materials from each and every zip
code to each and every corner of the world is unfathomable. Logistically,
execution of the task without any constraints of time is daunting.
Logistically, execution of the task with the stipulation of mandatory overnight
delivery is an absolute miracle.


We would not initiate competition against carriers FedEx or
UPS if $50 billion miraculously appeared in our bank account. Establishing an
entity with the expectation of stealing market share from the established
networks and FedEx, UPS, DHL, and U.S. Post Office would be nothing short of
lunacy—a one way ticket to the poorhouse.


Due to the lack of competition, customers know they must pay
to play. Although the skyrocketing prices of jet fuel have decimated profits in
the airline sector, the bottom line of the delivery sector has continued to
surge. United Parcel Service has demonstrated the pricing power to include
additional surcharges to delivery services for rising fuel costs. Customers
must comply, as rival FedEx has also shown the capacity to apply these


Obviously, the importance of the United Parcel Service as a
facilitator of commercial activities cannot be overstated. Still, what has
Brown done for us?


UPS, similar to Best Buy, 3M, Coca Cola, and Nike represents
measured diversification. The group quietly enjoys the benefits of technology
and international investment with a fraction of the risks. United Parcel
Service crests upon the waves of both e-commerce and globalization. Best Buy
functions as the conduit linking the consumer to technology; while 3M, Coca
Cola, and Nike derive the bulk of their profits overseas, hedging against U.S.
economic and dollar deterioration.


Again, what has Brown done for us?


UPS is a reliable enterprise, generating sufficient earnings
and dividend growth, allowing international exposure without slogging through
the labyrinth of foreign policy. The stock mitigates risks specific to our
portfolio, serving as another counter to ExxonMobil, as the transportation
group demonstrates negative correlations to crude oil. Indeed, The Dow Jones
Transportation Index has repeatedly surpassed records throughout the first half
of 2006, amongst moderating energy prices. Lastly, UPS facilitates e-commerce;
hence technology sector exposure is generated without the risks of dumping
money into ‘thenextbigthing.net,’ a firm destined to merge with










We itemize the smaller, complimentary selections of our







Div. Yld.











Fannie Mae

Washington, D.C.






Coca Cola

Atlanta, GA







Beaverton, OR






Electronic Arts

Redwood City, CA







Washington, D.C.







Seattle, WA












We will discuss these issues in the aggregate as their
individual movements are relatively immaterial to performance. The trading
patterns and behaviors of a number of these issues are similar to the lager
positions described prior. Thus, elaborate discussion pertaining to these
bit-players would serve as little more than repetitive discourse. Coca Cola and
Nike represent dominant, mature consumer equities out of the Berkshire
playbook, whereas Danaher is effectively a private equity company masquerading
as an industrial conglomerate. DHR is one part Berkshire, one part 3M.


DHR is the leading performer of the group and should have
garnered a larger amount of our investment capital. The Washington company
controlled by the Rales family gleams cash flow from a variety of businesses
including tools, water purification, and health care. Notably, the growth of
DHR has completely outpaced Berkshire over the past decade, with only a
fraction of the notoriety.


Electronic Arts is a consumer electronics purveyor
specializing in video game software. Generally, ERTS exhibits comparable
characteristics to Best Buy. However, as the gaming industry confronts a
sluggish transition period profits have collapsed. Gamers are reluctant to
purchase the entertainment until the next generation of machines has been
properly introduced. Our two electronic outfits represent polar opposites: BBY
has skyrocketed, ERTS has been thoroughly trounced.


Originally, with Best Buy fitting the bill as a
quasi-technology stock, we did not deem the inclusion of ERTS to be a
necessity. The stock only became a legitimate entry of the balance sheet as the
shares were torpedoed by a brutal sell-off.


Statistically, at 57x earnings, the stock is wildly
expensive. Statistically, at 10x earnings Exxon is a compelling bargain. Common
sense indicates otherwise. Exxon boasts bloated profits exacerbated by an
irrational supply / demand equation. Electronic Arts is the victim of the
supply chain gaffes at Microsoft and Sony, depressing profits to abnormal
levels. As indicated within prior sections ‘e’ and earnings are the divisor,
skewing the p/e’s of stocks towards irrelevance during abnormal times. Electronic
Arts may very well be a bargain.


The Federal National Mortgage Association, better known as
Fannie Mae represents another equity which has been dumped and scorned by
investors. The government sponsored entity responsible for facilitating
liquidity within the mortgage market has been the victim of a deteriorating
real estate sector, daunting interest rate environment, and self-imposed
accounting shenanigans. At best, the future direction of the enterprise may be
described as murky; its recent history may be described as nothing short of disastrous.


Earnings per share, price to earnings ratios, and all other
estimates of value remain useless. The question being, what exactly are earnings?


We feel that by any measure, the stock is cheap. With a
price to earnings ratio of 6, and an earnings yield of 16%, the stock trumps
all comers—stocks, bonds, and real estate in terms of value. Entertaining a
wild scenario of former executives overstating earnings by double the actual,
FNM would still trade at a multiple of less than fifteen. We feel that a price
ranging from six to fifteen is more than adequate compensation for the risks.


This is an entity that possesses the power to tap credit
markets, borrowing at favorable rates given its ties to the Federal government.
The proper use of leverage creates a profit machine, as Fannie was crowned a
Wall Street darling throughout the eighties and nineties. However, a return to
the Fannie of old remains in doubt with lawmakers encircling the beleaguered
firm calling for heightened regulation, larger capital requirements, and a
restricted mortgage portfolio. We will continue to exercise patience with the
investment, collecting dividends while purchasing strategically.


Overall, the trend is obvious. As we brace for a listless
market, value trumps growth. Although merely a diversion during bull markets,
the dividend takes precedence during periods of market turbulence. Obviously,
dividends represent essential components of the profit picture with markets
generating scant single-digit returns, or even losses. Stocks paying healthy
dividends are often mature businesses, returning profits to shareholders,
rather than retaining earnings to fuel growth. Also, due to the time value of
money, quarterly dividends mitigate risks to the shareholder. $1 today in the
form of a dividend is more secure than $1 tomorrow in the form of a capital


Berkshire Hathaway and Starbucks are the outliers. Berkshire
has remained a key component in spite of its nonexistent dividend. Starbucks
trades at 55x earnings and is indeed, exorbitant. The coffee maker has blazed a
trail of exponential earnings growth and shares have rarely, if ever appeared
cheap. Were Starbucks to maintain such an impressive trajectory, the purchase
of SBUX at a fifty five multiple to current earnings would prove to be a steal
in retrospect. As for Berkshire, we cannot scoff at the notion of Warren
Buffett, the legendary Oracle of Omaha foregoing the dividend, preserving
capital to direct towards more stocks, businesses, and profits.


Indeed, Berkshire stock, trading at $3,000 for B; $90,000
for A is a bargain relative to $35 Starbucks stock. Share price is arbitrary,
earnings being the true indicator of value. $3,000 buys one share of BRK, 85
shares of SBUX. $3,000 entitles the investor to approximately $176.50 of BRK
earnings, $58.60 of SBUX profits. For readers that remain ignorant to the
definition of price and value, we have some lovely Arkansas oceanfront property
for sale.














III. Conclusions







As we conclude our report, we have come full circle, having
presented our philosophies, the manifestations of our ideas in stock, and the
sequence of events and phenomena which act to further galvanize our beliefs.


It is a firm aptly named ONYX INVESTMENTS, as we operate
within several groupings of contrary realms, similar to the layered black and
white stone. We are both advisors and investors; diplomats and capitalists. We
continue to build an enterprise with ‘old money’ principles, without the ‘old
money’ connections. Communications usually present both sides of the coin,
rather than exposing personal commitment to a particular issue. Through it all,
we remain privy to the virtues and vicissitudes of capitalism. We must embrace
a system which stratifies, layering society in a manner comparable to
geological formations. Whereas the wind, water, and fire structuring rock are
natural, class divisions are imperfect material creations of man. Such is the
gift and the curse of money.


Perhaps we are engaged in a life journey in which the
material and the numbers mean nothing. Perhaps we are little puppies, chasing
our tails, exerting intense energy and movement, yet moving nowhere. We may be
playful hamsters, sprinting along wheels that are stationary. Of course, in our
own respective worlds, we are all important. Of course, a tick on the rear end
of a rhinoceros feels that he is also all important.


Perhaps we should all take a page from the philanthropy of
Rockefeller, Carnegie, Gates and Buffett. Perhaps we should all take a page
from the leadership of George Washington, Alexander Hamilton, Frederick
Douglass, Abraham Lincoln, and Dr. Martin Luther King. The theme of investment
is the theme of sacrificing instant gratification in order to eventually
harvest and share larger amounts.


Men and women have built enterprises, gifted fortunes,
dodged bullets, risked persecution, carried shackles, fought, and perished so
that we may be positioned heretofore. We must respect the responsibility,
investing time, energy, and monies in order to enhance the choices and
potential of the future. We must not be parasitic, affixed upon the rump of the
society, squandering resources, deeming our respective present to be all


Noble sentiments aside, I wish to personalize my motivation
to build wealth.


I have selected relevant signage to mark the sections of
this draft that that are symbolic to the journey that I have embarked upon. The
importance of the Interstate 94 shield has already been thoroughly presented.
Route 29, commemorates my Silver Spring, Maryland upbringing; U.S. 1, marks
both the 1st phase of this company and my East Coast and Southern
roots; and 15-501, marks my college years in Chapel Hill, NC where crude
thoughts began to crystallize into philosophies. The report is book ended by
the Interstate 95 / 495 dual plex, representing the Capital Beltway. Life
events tend to reinforce and strengthen particular notions, manufacturing an
infinite loop.


Route 29’s Silver Spring, Maryland of the late eighties and
nineties was a pivot for the Washington, D.C. area. Situated between the
wealthy enclaves of Northwest Washington, Chevy Chase, Bethesda, Potomac, and
Fairfax to the west; and depressed sections of Northeast and Prince Georges to
the south and east, the suburb centered as the vortex of class division.


The character of the city was without definition, confused
by a lack of clear boundaries. Although maps identify Silver Spring, White Oak,
Colesville, Layhill, Glenmont, and Fairland as distinct, the Post Office seems
to have awkwardly meshed the entire eastern third of Montgomery County under
the name ‘Silver Spring.’


Silver Spring became a city synonymous with the elite cul de
sac and the abandoned, lawless ‘downtown.’ Briggs Chaney, White Oak, and
Langley Park were neighborhoods that simultaneously conveyed the serenity of
suburbia along with a renegade thug culture. Well-heeled suburban commuters
shared 29, New Hampshire, I-95, and the B / W Parkway with drug traffickers and
criminals from D.C. to Baltimore. Contingent upon the source, the term ‘Silver
Spring’ delivered contrary connotations: one part, comfortable suburbia, one
part danger.


The confusion manifested itself in the area youth. The
product was often comical, with suburbanites of means masquerading as
lawbreakers—as if criminal activity was critical for survival; and their poorer
neighbors masquerading as old money—as if material goods were essential for
survival. Perhaps the excitement lay within the presentation of a particular
image: Was one rich, a thug, or both?


Time enables the appreciation of choice. We are often
confronted with decisions, or forks in the road that may be initially perceived
as minor, yet will eventually alter the course dramatically. We have all
witnessed the manifestations of prior junctions or actions along the route. As
I appraise my own travels, the path is cleared and lit by the meteoric rise of
acquaintances; yet littered with the unfulfilled potential of peers by the
wayside. I remain fortunate to be of a background of crossroads—those that have
selected the straight and narrow, and those that have succumbed to the
self-sabotage of riskier paths.


The opposing themes of the place and era were stark, yet the
under girding idea remains a thirst for capital. This was the Nation’s Capital.
This was also The Murder Capital. At the same time that George Bush was
fighting a ‘War on Drugs,’ the infamous mayor, Marion Barry was being busted
for drugs. The Georgetown Hoyas basketball program, led the dignified John
Thompson, commanded respect. Arguably, the program’s biggest fan, drug kingpin
Rayful Edmund commanded greater respect. Lawmakers, lobbyists, and business
persons operating ‘inside the Beltway,’ were the benchmarks of power, while
large swaths of inner city District of Columbia were the environs of the


Although gentrification, Anthony Williams, and Big
Government, have transformed the area beyond recognition, particular ideas
remain central. Washington is a political city in which one must pay to play.
The lack of capital and connections in an area built upon connections which
lords over a nation built upon capital, which in turn lords over the Empire of
Western Thought built upon both capital and connections is complete torture.


All inhabitants of the area are privy to the differences
amongst the ‘haves’ and the ‘have-nots,’ and remain susceptible to a form of
desperation, if not hysteria to advance. Perhaps money is not the ultimate
goal; rather it is the appearance of remaining within the moneyed class which
takes precedence. As a young Washingtonian, society dictates that being ‘broke’
in America is not an option.


Of course, this rough outlook was to become refined at
Chapel Hill, further chiseled upon the exchange of my 85, 95, 29, and 495
shields for 90, 94, 41, and 294 bearers.


Ultimately, my experiences at The University of North
Carolina, demonstrated that the appearance of riches is insignificant, perhaps
detrimental to the goal. The hint of money fuels unrealistic expectations
amongst peers. Money is the most effective cosmetic and aphrodisiac, and one
whom applies his means liberally through extravagance facilitates the
confusion. Is one attracted to the person, or is one attracted to the money?
Indeed a fool with money is quite popular, as he cannot ascertain that he has
been stripped of his personality, converted into a tool.


Upon entry into working society, I recognize that particular
scenarios which may appear to be all-important in the present may in fact
eventually become frivolous. The goal is what matters, any major diversions to
the object being nuisances. The goal is the freedom that capital enables. In my
world, material items and transactions executed simply to appear moneyed are
meaningless distractions—extravagance being without merit.


There is little need to become celebratory as little has
been accomplished.


True friends will ride regardless. I understand that those
that have remained in my corner from Day One will remain supportive
unconditionally. These individuals are on board because of their relationship
with ‘Kofi Bofah’—indifferent to the rationale behind ONYX INVESTMENTS holding
1000 shares of Exxon, rather than 1000 shares of
supercalifragilisticexpialidocious. Likewise, the individual must recognize
whom his true friends are, or with which personalities and acts that he may
pledge allegiance towards his ultimate goal.


Although the double-entendre and word play between these
lines are many, we have merely revealed the tip of the iceberg. One, readers
must be granted the credit to evaluate the work without handholding. Two, we
must not show our entire hand. Lastly, we wish to preserve material for future


We are hopeful that readers may enjoy the ride along our
Road to Riches…











IV. Appendix



Exhibit A – Performance


We present our performance in
comparison to the broader market Standard and Poors 500 Index. Energy has been
the key component. Of course past returns are no indicator of the future and we
may not telegraph future movements. Perhaps the only information which truly




S&P 500 Index














Exhibit B – Essential Literature


Although no works have been
cited directly, we itemize literature which has been critical to our
philosophies. Our thoughts emerge as the product of our studies and experiences.
It is doubtful that we have formulated statements which have not been
previously articulated. Recommended writings suggest that scholars appreciate
all angles of the argument. We appreciate statesmanship, economics, and
struggle. Certainly, historical knowledge is vital:









Alexander Hamilton

Essential to U.S.


The House of Morgan

The rise of banking.



Rockefeller, #1 capitalist.


Black Rose

CJ Walker story. All is possible.


Common Stocks…

The intangibles of


The Great Gatsby

There is a little Gatsby in
all of us.


The Intelligent Investor


Graham, Dodd

Security Analysis

The Dean’s textbook.

Hamilton, Madison, Jay

The Federalist Papers

Arguments that built a


Benjamin Franklin

Statesman. Scientist.


Employment, Interest, Money

The role of govt. and


Rich Dad. Poor Dad.

Mentality separating rich
and poor.



Top biography on genius


The Prince

Ruthless focus upon the



Account of ’82-’04 boom,


Kaffir Boy

Apartheid in S. Africa.

Marx, Engels

Communist Manifesto

Attack upon capitalism.


The Wealth of Nations

Pure capitalism.


The Prize

The world’s quest for oil.









Exhibit C – ‘Ghost’ Stocks


Stocks that have been bought
and sold, or shares which we have seriously contemplated purchasing. Investors
may note that even our secondary ideas have provided exceptional returns. Sales
may have been executed following run-ups deemed to be unsustainable. Purchases
may have been foregone due to pricing or diversification reasons. Although the
fundamentals may appear favorable, we remain averse to intense concentrations
of oil and industrials. We remain hopeful that these ‘ghost’ stocks do not
return to haunt us:






Accounting shenanigans and
ouster of Greenberg were buying opportunity.


Top independent oil
exploration dealmaker.


CAT nirvana: stock rides
commodity, construction boom.


Luxury leather goods maker,
shares bought and sold.


Financials inevitable
necessity, but daunting interest rate environment prevails.

General Motors

Terrible business.
Excellent price.


Excellent business.
Terrible price.

K-Mart / Sears

K-Mart merged into Sears
Holdings, shares bought and sold.


Golden Arches an ideal stop
along toll road.

Valero Energy

Top oil refiner

Whole Foods

Excellent business.
Terrible price.


Exhibit D – Favorite Tours


My goal is to drive all fifty
states. I have already covered the map from Florida to Massachusetts; New York
to Minnesota; Georgia to Michigan. Hence, I maintain extensive understanding of
East Coast, Southern, and Midwest infrastructure. Investors will be in good
hands if my knowledge of stocks approaches the halfway mark of my knowledge of
the road way:








GW Bridge to Battery

New York, New York.

I-20, 75,85,285


ATL is the standard of urban
highway construction.

Interstate 40

Blue Ridge / Gt. Smokies

One of the most beautiful
sections of the country.

Interstate 75

Lexington – Cincinnati

KY bluegrass country, OH
River Valley approach.

Interstate 76

Pennsylvania Turnpike

Engineering marvel as the earliest
of interstates.

I – 90 / 94

Junction – Cermak

Striking Chicago views.
Incredible urban freeway.

Interstate 95

Miami – Maine

The Main Street of the East
Coast. This is Home.

‘TO – 95’

Del. Bridge – N.J. Turnpike

Completion signaled the dominance
of the automobile.

‘TO – 90’

Chicago Skyway

Adventure Begins.

Interstate 278

Staten Isle / BKLN / QNS

Verrazano to BQE. The most
challenging of drives.

Interstate 395

14th Street

Best Washington, D.C.

Interstate 495

Montgomery County

Lovely foliage and curvature
along Capital Beltway.

N.J. 495

Turnpike – Lincoln Tunnel

Descending helix fronts
Midtown Manhattan.

U.S. 15-501

Durham – Chapel Hill

Landscaped to shield sprawl.

U.S. 29

Northwest – Columbia, MD

Memory Lane.

U.S. 1

S. Dixie Highway

Miami’s Finest.

U.S. 41

Lake Shore Drive

FDR Midwest.

Sheridan Road

Evanston – Lake County

The immaculate homes of
Chicago’s executive belt.

N / A

Washington, D.C.

Radiating streets, circles,
incomplete freeways, quirky grid, and city quadrants confuse outsiders;
galvanize native Washingtonians.


Exhibit E – Unpleasant Drives


Given the fact that I am in
love with the road, these segments must be exceptionally painful. Midwest
Interstate driving is absolute torture. The Pennsylvania / Ohio border along
the turnpike and the quick jaunt across Cincinnati mark the beginning of the
end. Due to the lack of scenery and topographic relief, traversing the area is
comparable to an 80’s video game driving simulator. The vehicle appears
stationary, only the repetitive setting races into the foreground. At times,
these drives also mimic the lulls of wealth creation: the maddening idea of
making no progress.


The scenery does not change,
only the mile markers [statements] alert the driver [investor] that movement
has occurred.


Surfacing is atrocious, due
to the freeze – thaw of the harsh winters and boiling summers. City-scapes are
marred by abandoned industrial eyesores. Signage is vague, running the gamut
from ‘West Suburbs,’ and ‘Northwest Suburbs,’ to ‘Ohio,’ ‘Indiana,’ ‘Wisconsin,’
and ‘Bridge to Canada.’


Chicago is indeed an
oasis—emerging skyward from the prairie as if a mirage. ‘Chicago via 90 Toll
Road / Chicago via 94’ along Interstate 65 in NW Indiana is a sight for sore










Crumbling freeways the
facilitators of suburban sprawl.

Interstate 65


CHI control signage in Indy:
200 miles of farm stench.

Interstate 74


See above. Replace cities
with Indy and Cinci.

Interstate 80

Youngstown – New Jersey

NYC listed as control city
in Ohio. Distance: 450 miles.

Interstate 85

Petersburg – N. Carolina

The loneliest stretch of
interstate along the East Coast.

Interstate 90

NW Tollway, Elgin – WI

Must pay tolls every ten

I – 80 / 90

Indiana Toll Road

Monstrosity of refineries,
steel mills, and smog.

64 / Clark / LSll

Lincoln Park / Old Town

Crazy layout. Crazy
pedestrians. A total mess.

Stony / 79 / CHI

Skyway Interchange

3 way intersection, ugly
ramps, hobos hawking wares.


Chicago Control Signage

Apparently, no city exists
between Chicago and St. Louis; Chicago and Detroit; Chicago and Memphis;
Chicago and Wisconsin.


The City of Boston

No Grid. Quirky One Ways.
Narrow Streets. I-95 is ‘128.’ Difficult entry / exits to critical
expressways. Annoying I-90 Mass Pike Tolls.



Kofi Bofah, Chairman


June 2006