2003 – Another Outstanding Year for The National Investor!

Once again, The National Investor buries the competition (and the major stock indices) – 2003 portfolio UP 85.9%!

            In 2003, we enjoyed our greatest investment success since 1999.   As verified by the well-known Hulbert Financial Digest, our recommendations in the year just past demonstrated that The National Investor continues to handily beat the major stock market averages—and virtually all of our competition—in any weather!

            Last year, the average annualized return of our recommendations was 85.9%.  This compares favorably to the approximate 25% gains last year for the Dow Jones Industrials and the S&P 500, and even to the torrid 50% gains last year for the Nasdaq!  2003 was the seventh consecutive year in which our recommendations beat the broadest market average—the Wilshire 5000—by double digits.  In fact—with the exception of 2002, when we “only” beat the Wilshire by 13%--we have never failed to beat that average by AT LEAST 25%!

            As always, I look back on what was a very successful year by asking “what if?”  As long-time subscribers know, if anything I tend to be overly cautious at times; both where the overall market is concerned, as well as when I see our recommended stocks become too expensive for my tastes.  One of my big “what ifs” from last year concerns one of the year’s most explosive stocks anywhere—Taser International (NASD-TASR.)  I was almost alone in pounding the table for this dynamic little company early in the year, when its share price languished undeservedly in the low single digits.  Later, as it got back toward its all-time highs around $20 per share, I suggested placing a stop-loss order to protect our gains.  It was soon triggered.

            Since that time, Taser’s shares have soared into the stratosphere, trading at well over $130 each recently!  I’d sure like to have that one back. . .

            On the flip side, I have a great sense of satisfaction for our overall market-beating performance last year.  This is especially true since—unlike virtually all of the other services that posted numbers similar to ours in 2003—I was skeptical that the overall market would do as well as it ultimately did.  I wrote last year—and continue to warn—that, eventually, our markets will suffer from the steady decline in the value of the dollar, as well as from the growing structural imbalances in both our economy and national finances.

            Nevertheless, I acknowledged that the dollar’s decline—the one trend we could all hang our hats on for the year—would open up profitable opportunities in most areas which traditionally benefit from a weakening U.S. currency.   We took advantage of many such opportunities last year; and we continue to do so as we move farther into 2004.

            Further—though we clearly got out of a few companies like Taser too early—our timing in taking profits elsewhere was dead on!  Most notably, and similar to a call I made in mid-2002—I once again advised lightening up on gold-related stocks at that sector’s most recent peak back in December.  In all these cases, one of the things I’ve always reminded my subscribers is that, whether my timing is perfect (as with the gold shares) or imperfect (as with Taser), nobody ever went broke by taking profits!

            Following is a list of those stocks we exited from during the year 2003.  Keep in mind that these are not the only ones that were factored into our performance for last year.  We continue to either buy or hold several others that boosted our performance in 2003 and that remain as active recommendations for my subscribers.

Initial                         Final

STOCKS                                  Purch. Date     Date Sold             Gain/Loss %

Tesoro Petro. (NYSE-TSO)                 6/21/00                         4/7/03                          +145.0%

Endocare (NASD-ENDO)                  10/31/02                      4/28/03                         +43.9%

Idacorp (NYSE-IDA)                          11/18/02                        6/3/03                           +23.2%

Calpine (NYSE-CPN)                          11/20/02                        7/1/03                           +106.3%

Taser Int’l. (NASD-TASR)                 9/26/01                         7/1/03                           +100.0%

Duke Energy (NYSE-DUK)                11/18/02                       7/10/03                          +8.2%

Amer. Cap. Strat.(NASD-ACAS)       7/16/02                       8/1/03                             +16.4%

Conmed Corp. (NASD-CNMD)           7/16/02                     8/1/03                              +3.9%

Hub Int’l. (NYSE-HBG)                        11/5/02                      8/1/03                              +38.5%

Bema Gold (AMEX-BGO)                  4/30/03                      8/7/03                               +67.9%

Seitel (OTCBB-SEIEQ)                        1/18/00                      11/5/03                           - 93.2%

Conolog Corp. (NASD-CNLG)          3/19/01                     11/5/03                            - 52.7%

ATMOS Energy (NYSE-ATO)           6/4/97                       11/25/03                           +39.3%

Goldcorp (NYSE-GG)                          7/23/02                     12/4/03                              +61.3%

Meridian Gold (NYSE-MDG)              7/23/02                    12/4/03                             +30.3%

Placer Dome (NYSE-PDG)                   4/30/03                    12/4/03                             +86.3%

Wheaton River (AMEX-WHT)          9/25/03                   12/4/03                              +59.0%

(NOTE:  Returns for some of the above, as reported at the sale dates in The National Investor, included in some cases dividends paid, as well as trading recommendations during the holding period.)

            In this new year ahead, I expect the same kind of general environment to hold for a while as we’ve seen in the recent past.  A weak dollar, Federal Reserve pump-priming, momentum and all the rest should, at the least, keep stocks stable generally, if not slowly rising.  Volatility will increase, however; and I will continue to advocate those stocks and sectors which stand the best chance of adding to subscribers’ wealth, while at the same time providing the best chances of weathering any sudden storms that might come along.

            Sincerely,

            Chris Temple – Editor/Publisher

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