From Barron's 8-6-07: David Richards' largest holding.

From Barron's 8-6-07: "General Electric [GE] is now my second-largest holding after Microsoft [MSFT]. I bought it in February when I decided to diversify my holdings from just oil and gold and Microsoft and Berkshire Hathaway [BRKA]. GE was selling at $34 to $35 a share. It is a question of valuation and it is a question of international exposure and it is a question of a strong financial balance sheet. It is also a question of [GE CEO Jeffrey] Immelt. I like Immelt. He has had about five years to clean up what he inherited. If he is not there, he is almost there. The earnings for '08 are going to be around $2.50 a share, and I bought the stock at 14 times earnings with a 3% yield. It now trades at 16 times. Given my outlook for the global economy, for a company of that quality with its participation in aircraft and locomotives and power plants and international finance, what is the risk at 16 times earnings?"

From Barron's 8-6-07: "With Coca-Cola, the amount of its earnings that are coming out of the U.S. are between 25% and 30% and its unit case-volume growth around the world is often in double digits. Bottled drinks in many parts of the world are growing rapidly, and are considered luxury items. If you are worried about clean water in the world, Coke and Pepsi deliver clean water and their business is getting bigger. They probably can grow at 10% or 11%, maybe even 12%, in earnings. You can buy these companies at P/Es [price/earnings ratios] that you haven't seen for years, and at prices that probably existed back in 1998-'99. At these levels, they make very good long-term investments. They are not going to make you rich, but they are going to go up, and they are going to go up more than the returns you can get anywhere else."

From Barron's 8-6-07: "If you are worried about clean water in the world, Coke and Pepsi deliver clean water and their business is getting bigger. They probably can grow at 10% or 11%, maybe even 12%, in earnings. You can buy these companies at P/Es [price/earnings ratios] that you haven't seen for years, and at prices that probably existed back in 1998-'99. At these levels, they make very good long-term investments. They are not going to make you rich, but they are going to go up, and they are going to go up more than the returns you can get anywhere else."

From Barron's 8-6-07: "I also like Johnson & Johnson [JNJ] and Eli Lilly [LLY]. The natural buyers of these big companies, the big pension funds, have abandoned them in favor of hedge funds, private equity, international investment and bond arbitrage. These companies are selling at 15 times earnings, when they used to sell at 25 to 30 times earnings."

From Barron's 8-6-07: "I also like Johnson & Johnson [JNJ] and Eli Lilly [LLY]. The natural buyers of these big companies, the big pension funds, have abandoned them in favor of hedge funds, private equity, international investment and bond arbitrage. These companies are selling at 15 times earnings, when they used to sell at 25 to 30 times earnings."

From Barron's 8-6-07: What oil companies do you like? "The two biggest are ConocoPhillips [COP] and BP. BP is attractive because it has lagged so much. ExxonMobil [XOM] and Chevron [CVX] are up 50% to 60% in the last few years and BP [BP] is up 5% or 10%. It used to sell along with the rest of them.

From Barron's 8-6-07: What oil companies do you like? "The two biggest are ConocoPhillips [COP] and BP. BP is attractive because it has lagged so much. ExxonMobil [XOM] and Chevron [CVX] are up 50% to 60% in the last few years and BP [BP] is up 5% or 10%. It used to sell along with the rest of them.