PORTFOLIO REVIEW 2005
MCLAUGHLIN INVESTMENTS BEGAN 2005 WITH $451,681.00 IN ASSETS AND FINISHED ON 12/31/2005 WITH $470,944.00 IN ASSETS. A GAIN OF $19,263.00 FOR THE YEAR.

WHAT DOES THIS MEAN? HOW DOES THIS RELATE TO YOU AS A PARTNER?

WELL IT MEANS WE DID RATHER POORLY. OUR GAIN OF $19,262 IS ONLY A TOTAL RETURN ON INVESTMENT OF 4.26% FOR THE YEAR; AS COMPARISON THE TOTAL RETURN ON INVESTMENT OF THE S&P500 INDEX GAINED 4.91% AND THE DJ INDUSTRIALS GAINED 1.71%. OUR INTENTION IS TO SURPASS THESE INDEXES BY A SUBSTANTIAL MARGIN. TOTAL RETURN ON INVESTMENT IS THE GAIN ON THE INVESTMENT WHEN CAPITAL GAINS AND DIVIDENDS ARE REINVESTED.

THIS RELATES TO PARTNERS BY NOT HAVING THEIR SHARE GROW AS WE WOULD LIKE AND INTENDED. IF OUR LONG TERM GOAL IS TO DISTRIBUTE $1,000,000 TO EACH MAJOR PARTNER THEN WE MUST WORK SMARTER. REMEMBER THERE ARE FIVE MAJOR PARTNERS AND 5 MINOR PARTNERS AND THE SHARE OF EACH PARTNER VARIES BY THEIR ORIGINAL CONTRIBUTION.

A MAJOR UNDER-PERFORMING ASSET, GENERAL MOTORS, WAS DISPOSED OF IN 2005 FOR A LOSS OF ABOUT $30,000. SEVERAL MINOR ASSETS WERE SOLD FOR SHORT TERM PROFITS, SUCH AS CANDIES SHOES, FOR PROFITS OF ABOUT $10,000. A COMPLETE BREAKDOWN OF TRANSACTIONS WILL BE ON FORM K-1 DISTRIBUTED FOR TAX PURPOSES IN APRIL. MOST TRANSACTIONS ARE DESIGNED TO HAVE MINIMAL TAX IMPACT ON PARTNERS.

THERE IS NO REASON WHY ANY PARTNER SHOULD BE IGNORING THIS INFORMATION. WHAT YOU SEE, HEAR, THINK OR EXPERIENCE ABOUT THESE COMPANIES IS IMPORTANT INFORMATION. YOUR FEEDBACK CAN MAKE OR LOSE YOU MONEY. DO NOT RELY ON OTHERS TO MAKE YOU RICH.

MCLAUGHLIN INVESTMENTS' METHODOLOGY IS BASED ON VALUE INVESTING. BASICALLY WE ARE SEEKING MAJOR COMPANIES THAT ARE SELLING AT A REASONABLE PRICE TO EARNINGS (P/E) AND HAVE A SUBSTANTIAL DIVIDEND. IN 2006 WE ARE MOVING TOWARD HAVING DIVIDENDS REINVESTED IN THE COMPANY ISSUING THEM, AS THEY ARE RECEIVED. FORMERLY DIVIDENDS WERE RECEIVED IN CASH AND INVESTED IN OTHER STOCKS. THIS CHANGE WAS MADE TO RECOGNIZE THAT IF WE ARE HOLDING A STOCK FOR THE LONG TERM AND BELIEVE IN ITS MERITS THEN REINVESTING THE DIVIDENDS IS THE MOST EFFECTIVE TO PARTICIPATE IN ITS GROWTH. THE KEY TO EVERTHING IS THE SELECTION OF SOUND COMPANIES WITH LONG TERM TRACK RECORDS OF GROWTH IN VALUE AND A REASONABLE DIVIDEND.

WHAT ARE YOUR RECOMMENDATIONS?

BELOW IS A CURRENT LIST OF PARTNERSHIP HOLDINGS. COMPANY NAME, NUMBER OF SHARES, RECENT SHARE VALUE AND TOTAL VALUE OF THE SHARES IS SHOWN.

Description
Quantity
Price
Market Value

ABBOTT LABORATORIES
202.547
Cash
39.74
8,049.22

KONINKLIJKE AHOLD N V
400
Cash
7.75
3,100.00

APPLIED MATERIALS INC
300
Cash
18.34
5,502.00

BANK OF AMERICA CORP
404.2626
Cash
46.68
18,870.98

BHP BILLITON LTD
1,008.5319
Cash
35.82
36,125.61

CATERPILLAR INC
1,024.4186
Cash
58.90
60,338.26
>
COMCAST CORP
206
Cash
26.42
5,442.52
CVP
CENTERPLATE INC
310.2305
Cash
12.95
4,017.48

CHEVRON CORP
284.1319
Cash
58.64
16,661.49

DUPONT E I DE NEMOURS CO
625.3004
Cash
42.72
26,712.83

DIAMONDS TRUST SERIES 1
100.9179
Cash
108.44
10,943.54

DIRECTV GROUP INC
535
Cash
14.42
7,714.70

HOSPIRA INC
20
Cash
43.80
876.00

I C O S CORP
200
Cash
28.21
5,642.00

INTERNATIONAL PAPER CO
1,040
Cash
33.70
35,048.00

JPMORGAN CHASE AND CO
373.4522
Cash
39.57
14,777.51

KINDER MORGAN INC
284.5917
Cash
94.12
26,785.77
>
LOWES COMPANIES INC
200.2059
Cash
66.08
13,229.61

LUCENT TECHNOLOGIES INC
400
Cash
2.72
1,088.00

3M COMPANY
229.2299
Cash
78.46
17,985.38

ALTRIA GROUP INC
858.9544
Cash
75.39
64,756.57

NOVELL INC
500
Cash
8.71
4,355.00

THE NEWS CORPORATION LTD
118
Cash
15.43
1,820.74

PFIZER INC.
233.7875
Cash
24.35
5,692.73

RITE AID CORP
700
Cash
3.46
2,422.00
>
AARON RENTS INC
1,575
Cash
21.48
33,831.00

RAYTHEON CO NEW
31
Cash
39.83
1,234.73

RETAIL VENTURES INC
100
Cash
12.49
1,249.00

WAL-MART STORES INC
85.2724
Cash
46.27
3,945.56

EXXON MOBIL CORP
649.3303
Cash
58.62
38,063.74


Summary of Total Market Value

Total Account Market Value - Net
$ 476,281.97
Total Cash Market Value
$ 476,281.97