Welcome back to Condor Monthly, Condor Capital's monthly client newsletter. In this issue, we introduce Condor Capital's upcoming email delivery of your quarterly statements, discuss our recent decision to purchase Wellpoint, Inc. (WLP), and share with you some advice for parents of children who have recently gone off to college.

What's New at Condor Capital

In an effort to provide the best possible service to our clients, Condor Capital is developing a platform which will allow us to email your quarterly statements to you in a password-protected file. This will allow us to deliver them a week earlier than paper statements, and should ease the burden of storing so many paper documents. Please do not confuse this with e-delivery platforms from Schwab and Fidelity, which can deliver your trade confirmations and monthly custodian statements online. If you have any questions about the program, or would like to enroll, please call Jeanette Lucas at Condor Capital on (732) 356-7323 or email her at jeanette@condorcapital.com.

I just returned from three days in Seattle, Washington, attending the Charles Schwab IMPACT conference. This conference presents an annual opportunity to discuss investment management ideas and methodologies with peers from across the country. It also provides a unique venue to meet with Schwab's top executives and discuss both the state of the industry as well as the ways in which Schwab can help Condor serve you better.

From the Portfolio Manager

WellPoint, Inc (WLP)

By now, many of you may be familiar with the upcoming Medicare Part D plan which will be rolled out in January 2006. Part D will offer prescription drug plans to the 20 million Medicare participants. In our search for potential beneficiaries of this plan, Condor recently identified WellPoint, Inc. as an ideal candidate. WellPoint, the largest health insurance provider in the U.S., was formed as a result of the merger between Anthem and WellPoint Health Networks in 2004. The company provides health, medical, dental, and vision benefits, as well as pharmacy benefits, life insurance, life and disability insurance benefits, and long-term care insurance to its 28 million members. WellPoint operates primarily under the Blue Cross and Blue Shield names.

Industry Trends Look Promising:

Presently, the 100 largest health insurers control 48% of the market, up from 27% in 1995. Further consolidation is anticipated as health insurers expand to cut costs through economies of scale. Scale helps companies negotiate bigger discounts from hospitals and doctors, which results in lower costs. Large players like WellPoint have become far more sophisticated in their utilization of technology to control and predict future costs, thereby controlling the bidding process and competition for new lives to insure.

In fact, WellPoint agreed to buy WellChoice, Inc. on September 27, 2005 for $6.5 billion in order to expand into New York. WellChoice will bring WellPoint 5 million customers in New York and increase the number of Americans covered by the company to 33 million, expanding its lead over number two player United Health Group's 25 million. New York is a very attractive market for insurers, with a lot of large companies headquartered there that can use their national coverage.

Valuation and Growth:

WellPoint is selling at a very attractive valuation relative to its growth rate. Earnings in 2006 are expected to grow a robust 18% and its P/E ratio is just 16 times, a discount to its peer group. The company's estimated long-term earnings growth is a respectable 15% with a PEG ratio of only 1.2 times.


Helping Your Child Make a Successful Transition to College

Many children recently made their first trek to college. Deciding what to bring to college - clothes, linens, toiletries, small appliances (e.g., alarm clock, lamp, hair dryer, radio/CD player), study supplies, a few favorite personal belongings, a computer, etc. - was certainly important, but there are actually other issues that may be more critical. The beginning of college life is an exciting time that will certainly be filled with inevitable highs and lows. Knowing what to expect may make it easier for your child (and you) to cope. Research shows that the first eight weeks of college are widely regarded as the hardest, a time when your child must adjust to new people and situations in every facet of his or her life. However, this period is also considered the most crucial. The academic, social, and personal skills that your child develops can help lay the groundwork for a successful college experience. While you can't tag along in your child's suitcase (and really, you wouldn't want to), there are ways you can help him or her make the adjustment to college easier.

Money and safety concerns

Talking with your child about money and safety issues can help pave the way for responsible decision making at college.
· Money management: Agree on a reasonable monthly spending amount so your child won't be tempted to overspend at college. Will you be providing a certain amount of spending money each month? Will your child have a credit card, and if so, will it be used for emergencies (preferable) or everyday expenses? Ideally, your child should establish an account with a bank that has an ATM on campus and know how to balance a checkbook.
· Alcohol and drugs: Though you may have already had this conversation with your child in high school, the stakes are higher now because you won't be around to see what's going on. Reiterate the dangers of alcohol and drugs, and the potentially volatile mix of alcohol/drugs and strangers.
· Safety: Discuss the importance of being aware of one's surroundings and traveling in groups, especially at night. Remind your child to call a taxi (on your dime, if necessary) if a driver's sobriety is in question, or to call a campus escort service if one is available.

The blues

No parent wants to see a child struggle, but during the first few weeks away from home, it's common for students to experience a range of emotions from exhilaration and happiness to anxiety, confusion, nervousness, and exhaustion. Typical issues involve homesickness, difficulty managing time and unlimited freedom, academic pressure, roommate conflict, social awkwardness, and feelings of self-doubt. As a parent, you'll want to be as supportive as you can and keep the lines of communication open. Let your child know that it's okay to call you at any time to talk, and that it's not necessary to put on a "brave face" for you. Then you'll need to walk a fine line between offering support and encouragement and actually telling your child what to do. After all, finding the skills to adapt and thrive is part of what college is all about. Just keep those care packages coming!

Making the grade

Finally, talk with your child about the importance of good study habits, since academics is the reason he or she is attending college in the first place. Remind your child to study in a quiet place at a time of day when he or she is most alert, and to seek out a professor's help if necessary. Also, encourage your child not to give up because of one poor grade, but to be persistent and dedicated in his or her studying efforts. Hard work is bound to pay off!