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Letter to the Editor

January 1999 Investment Update

Stop the presses! The black cloud of future despair forecast for First Priority Group in October, as its stock was sliding into obscurity, may have a silver lining. As First Priority Group's stock was sliding under $1.50 per share from a year high of over $6, American Information Company, Inc. of California was accumulating a 19 percent ownership position in FPG. American Information does business as Consumer Car Club, and its business is running the website www.carclub.com, which offers new and used cars for sale as well as advertising/offering car loans and insurance.

It would appear that Consumer Car Club will tie into First Priority Group's shop network and expand its services offered to car owners via its website. With internet-related stocks selling at unbelievable multiples of earnings, or lack of earnings, perhaps FPG's management and stockholders have hit the jackpot. When we look at Form SC13D, filed with the SEC on December 16th, however, it shows that AIC has negotiated options with key present FPG stockholders ranging from $1 per share in 1999 to $5 per share, expiring in 2001, hardly a get-rich program or a tribute to today's management, considering the stock has sold for over $6 in 1998.

FPG also announced that it was going to issue an additional 33 million shares to be used in putting together their "merger." Based on the fact that today there are only 8.25 million shares outstanding this will be quite a jump. FPG now sells for 1.74 times per share sales with a negative 27 percent return on assets and a negative 39 percent return on equity.

Since this is the last Investment Update of the year, it is only fitting to acknowledge that while our stock picks for the INSIGHT Fund outperformed the industry as a whole they dropped in value 14 percent while the Dow is up 13 percent for the year - not great, but we will keep at it.

In February I will announce our picks for 1999, one of which will be The Boyd Group, headquartered in Winnipeg, Canada, the only publicly traded pure collision repair industry stock.

-Charles Baker-

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