We had a decent month...

If you have any questions or comments, please direct them to the Kua`aina Partners message board:

http://boards.fool.com/messages.asp?id=1330599000179000

I will occasionally post updates about the KARB Port here, but to stay up-to-date with it, please go to that message board.

PORTFOLIO PERFORMANCE

Containing the five Alterna Port stock selections. This port is up 32.7% for the year.

        # Shares   In At   Close 1/29  Total$   change
CMGI       108     55.50    122.000  13,176.00  119.8%
NTAP       126     47.50     53.000   6,678.00   11.6%
BRCM        48    123.75    133.125   6,390.00    7.6%
SEPR        68     88.25    114.750   7,803.00   30.0% 
CTXS        62     96.38     90.625   5,618.75   -6.0%
Total                                 39,665.75  32.7%

Performance Comparisons:

                     YTD
KARB PORT           32.7%
RB PORT             12.17%
S&P   500            4.07%
NASDAQ              14.28%

THE GOAL OF THE KUA`AINA-ALTERNA-RULE-BREAKER PORT

The Kua`aina Partners message board discusses alternative ways to apply The Motley Fool's philosophies. The board is in the process of creating three model ports: the Kua`aina-Alterna-Rule-Breaker (KARB Port), and the Kua`aina-Alterna-Rule-Maker (KARM Port), and the Kua`aina-Alterna-BOring (KABO Port).

The goal of the KARB Port and of the KARM Port is to employ the Foolish Philosophies of rule breakers and rule makers, respectively, and produce small portfolios consisting of 5-8 stocks, none of which are currently in the Rule Breaker Port and Rule Maker Port. We would like to show how normal people like us can apply the Foolish Philosophies to acquire stocks that are not in The Motley Fool's portfolios, and still have reasonable performance.

DISCLAIMER FOR THE KARB PORT

Our intention is to choose rule breaker stocks for long-term buy and hold. Some members of the Kua`aina Partners investment club have allocated their real money into each of these picks so far, and we intend to stay in them through future ups and downs.

We want to emphasize that as rule breakers, these companies are particularly risky and volatile, and we do not recommend that you allocate any of your hard-earned cash to them until you understand what that means. We are only putting a small amount of our money into these picks initially, so we're willing to risk losing everything we put into these stocks for the opportunity for big growth in one or more of the picks. There are no guarantees here.

BACKGROUND OF THE KARB PORT

In late 1998 and early 1999, the Rule Breaker Port added three new stocks -- ATHM, AMGN, and <to-be-announced>. We think it would be interesting to see if another basket of rule breaker stocks would have approximately the same performance. Note that this means we will not be selecting Tweener and Rule Maker stocks, even though we believe such stocks do also have their place in a well-balanced real money portfolio.

The Rule Breaker Port chose ATHM, AMGN, and <to-be-announced> by selecting leaders in potentially high-growth industries: broadband Internet access, biotech, and <to-be-announced>. After reviewing the posts on the Rule Breaker board, and following up with a perusal of the message boards corresponding to companies discussed on the Rule Breaker board, we have determined five other potentially high-growth industries:

1. Online direct marketing. We believe the leader in this industry is the rulebreaker CMGi (CMGI).

2. Network storage and caching appliances. We believe the leader in this industry is the rulebreaker Network Appliance (NTAP).

3. Broadband communication semiconductor chips and boxes. We believe the leader in this industry is the rulebreaker Broadcom (BRCM).

4. Isomers and metabolites of existing drugs. We believe the leader in this industry is the rulebreaker Sepracor (SEPR).

5. Thin-client network software. We believe the leader in this industry is the rulebreaker Citrix (CTXS).

We now provide more information about these five companies, and we set up the new ports...

MORE INFORMATION ABOUT CMGI

1. CMGI as a Rule Breaker

See posts 66, 514, 569, and 830 on the Rule Breaker board:

http://boards.fool.com/message.asp?id=1030051000028000

http://boards.fool.com/message.asp?id=1030051000153001

http://boards.fool.com/message.asp?id=1030051000183000

http://boards.fool.com/message.asp?id=1030051000253000

2. CMGI Company Information

http://quotes.fool.com/snapshot/snapshot.asp?symbols=CMGI

3. CMGI Message Board

http://boards.fool.com/messages.asp?id=1080158000239005

MORE INFORMATION ABOUT NTAP

1. NTAP as a Rule Breaker

See posts 76, 1039, and 1053 on the Rule Breaker board:

http://boards.fool.com/message.asp?id=1030051000036000

http://boards.fool.com/message.asp?id=1030051000320000

http://boards.fool.com/message.asp?id=1030051000320002

2. NTAP Company Information

http://quotes.fool.com/snapshot/snapshot.asp?symbols=NTAP

3. NTAP Message Board

http://boards.fool.com/messages.asp?id=1190046000040001

MORE INFORMATION ABOUT BRCM

1. BRCM as a Rule Breaker

See posts 359, 644, 645, 833, and 951 on the Rule Breaker board:

http://boards.fool.com/message.asp?id=1030051000123000

http://boards.fool.com/message.asp?id=1030051000123000

http://boards.fool.com/message.asp?id=1030051000199000

http://boards.fool.com/message.asp?id=1030051000199001

http://boards.fool.com/message.asp?id=1030051000199004

http://boards.fool.com/message.asp?id=1030051000295000

2. BRCM Company Information

http://quotes.fool.com/snapshot/snapshot.asp?symbols=BRCM

3. BRCM Message Board

http://boards.fool.com/messages.asp?id=1070408000055001

MORE INFORMATION ABOUT SEPR

1. SEPR as a Rule Breaker

See posts 251, 755, and 781 on the Rule Breaker board:

http://boards.fool.com/message.asp?id=1030051000093000

http://boards.fool.com/message.asp?id=1030051000231000

http://boards.fool.com/message.asp?id=1030051000231001

2. SEPR Company Information

http://quotes.fool.com/snapshot/snapshot.asp?symbols=SEPR

3. SEPR Message Board

http://boards.fool.com/messages.asp?id=1240067000022000

MORE INFORMATION ABOUT CTXS

1. CTXS as a Rule Breaker

See posts 605, 621, 627, and 628 on the Rule Breaker board:

http://boards.fool.com/message.asp?id=1030051000191000

http://boards.fool.com/message.asp?id=1030051000191001

http://boards.fool.com/message.asp?id=1030051000191002

http://boards.fool.com/message.asp?id=1030051000191003

2. CTXS Company Information

http://quotes.fool.com/snapshot/snapshot.asp?symbols=CTXS

3. CTXS Message Board

http://boards.fool.com/messages.asp?id=1080146000027003


FREQUENTLY ASKED QUESTIONS ABOUT THE KARB-PORT

http://boards.fool.com/message.asp?id=1330599000181000