TWST: Would you start with an overview of Atlanta Investment Counsel and your responsibilities there?

Mr. Davenport: Atlanta Investment Counsel, LLC, was formed in 1998 and I am the President of the firm. Our only client is the mutual fund that I manage and that is the Wisdom Fund. We are a small investment boutique in Atlanta, Georgia, with only three employees. We probably will start a separate account service by the end of the year. The principals of Atlanta Investment Counsel, LLC, are Dr. John M. Templeton Jr., Gail Zimmerman and John Donaldson.

TWST: Tell us about the Wisdom Fund and its investment philosophy.

Mr. Davenport: The Wisdom Fund was started because of our belief that Warren Buffett is considered one of the greatest investors of all time due to his investment strategy and philosophy. He has created quite a bit of wealth for his shareholders over all these many years. We began to see that in the last eight to nine years the stock market had placed a substantial premium on the price of Berkshire Hathaway (BRK). We think that Berkshire trades at a pretty significant premium to what it is actually worth based on book value. Standard and Poor's has a 'hold' recommendation on Berkshire Hathaway right now and has for the last year. They think that the current price is higher than it should be. However, that's something that Warren Buffett cannot control. The stock market does that. The Wisdom Fund was started with the goal to eliminate the real problem that we saw with Berkshire Hathaway, that being the overvaluation. The Fund would buy all the publicly traded securities that Berkshire Hathaway owns like American Express (AXP), Coca-Cola (KO) and Wells Fargo (WFC), and own them in the same percentages that Berkshire does. For the privately held companies that Berkshire owns, we purchase what we feel would be the best proxies. For example, Berkshire purchased Benjamin Moore Paint and Shaw Industries several years ago. Since the Wisdom Fund could not purchase shares of those companies, I bought Sherwin-Williams (SHW) and Mohawk Industries (MHK) as our proxies. In summary, we attempt to emulate the investment portfolio, both public and private holdings, of Berkshire Hathaway.

TWST: So, if Berkshire Hathaway has 5% of its portfolio in Coca-Cola, you would buy 5% in Coca-Cola for your Wisdom Fund?

Mr. Davenport: Yes, we will own Coca-Cola in the Fund and in the same percentage that Berkshire does. Or at least as close as we can possibly can.

TWST: Tell us about the actual decision-making process in your emulation of Berkshire Hathaway's portfolio.

Mr. Davenport: Warren Buffett makes no secret of, I believe, what he looks for in companies. In fact, at his annual meetings, he always talks about the Value Line Investment Survey being a great source of information for him. He likes to look at companies that have long-term track records. I try to look at the same kind of financial ratios that Buffett might look at when I have to find a proxy for the Fund. There are four different areas that I look for. One of them would be free cash flow, and that certainly is very, very important to Buffett. I believe that he looks for free cash flow of at least $50 million or more each year. So I try to look for that number also. I believe, from reading past annual reports and going to the annual meetings of Berkshire Hathaway, that net profit margin is very important to Warren. So I try to look for companies that at least have 15% or more net profit margins. Return on equity is something that Warren Buffett talks about a lot and I look for at least a 15% return on equity for the preceding three years. The Wisdom Fund primarily owns companies with a market cap of at least $500 million. Buffett has a strict valuation discipline that incorporates a margin of safety into the price he pays. And so do we. Successful investors spend a great deal of time calculating the fair value of a company before they consider buying the stock. You just can't pay whatever the stock market is currently asking for the stock. I think many people in our industry tend to chase stocks and tend to probably pay more than they should. We try to make sure that we have a margin of safety.

TWST: Are there any differences in your investment buys or sells, compared to Berkshire Hathaway?

Mr. Davenport: The only difference would be that we attempt to find proxies to replicate Buffett's private holdings. That's where our portfolio will differ from Berkshire Hathaway. In some instances, I might have two or three stocks that are trying to replicate one of his. A good example would is that Berkshire Hathaway owns Dairy Queen. Warren Buffett certainly likes their Dilly Bars, and since we can't own Dairy Queen, the Fund owns McDonald's (MCD) and Yum! Brands International (YUM). The Fund has also owned Wendy's (WEN). So, where we differ is that depending on the size of the privately held company he has, the Fund may have two, three or even four proxies trying to replicate that one investment that Berkshire owns. So the only difference would be just in the holdings we have for our proxies.

TWST: The performance of Berkshire Hathaway of course has been quite outstanding. How has your Wisdom Fund fared?

Mr. Davenport: We track the performance of our Fund versus Berkshire Hathaway and the S&P 500. The Fund began on February 16, 1999. Since that day, the Fund has outperformed Berkshire and the S&P 500. The Wisdom Fund Institutional Class has an average annualized return of +5.20% vs. Berkshire's +3.09% and the S&P 500's +1.63% since our inception date. Of course there are quarters where Berkshire will outperform the Wisdom Fund and vice versa. We feel the key to our outperformance is due to the premium in the price of Berkshire Hathaway that I previously talked about.

TWST: One advantage with the Wisdom Fund would be that if Berkshire Hathaway had a problem with one of its own companies and the Wisdom Fund had bought a proxy holding, you wouldn't experience the problems that Berkshire Hathaway had.

Mr. Davenport: That's certainly true, unless it was an industry-specific problem.

TWST: How many holdings are there in the Fund?

Mr. Davenport: Right now, it is a little larger than normal with 49 equity holdings. We have held bonds in the Fund when Berkshire has owned bonds. We have held high yield corporates in the past and own some international bonds right now.

TWST: Is that a fluctuating number or are you always fully invested?

Mr. Davenport: Berkshire Hathaway currently holds a large percentage of its assets in cash and cash equivalents and has for the last several years. Warren Buffet has said that he just doesn't see a lot of suitable investments. The Wisdom Fund has on average held about 20% of its assets in cash and short-term Treasury bills. This is a much larger amount in cash than most mutual funds have. We hold the cash for equity purchases, for when Berkshire might make a purchase.

TWST: What are some of the holdings that you feel are representative of the portfolio and tell us what some of your top holdings are and the percentage of assets?

Mr. Davenport: The largest holding in the fund is Coca-Cola, just like Berkshire. Procter & Gamble (PG), which purchased Gillette, has become our second largest holding and Buffett has even added to his holdings of Procter & Gamble. American Express is the third largest and another long-term holding of Berkshire Hathaway. Some of the next largest holdings are actually proxies for Berkshire's insurance holdings. Allstate (ALL) is about 4.5% of the portfolio. White Mountains Insurance (WTM) has a 5% position in the portfolio. Washington Post (WPO) is a stock that Berkshire has owned for many, many years, and that's about a 3.6% position in our portfolio. Another large holding is Kinder Morgan (KMI), the natural gas transmission company, with about a 3.5% position in our portfolio. Kinder Morgan is in our portfolio as a proxy for a natural gas pipeline that Berkshire purchased a couple of years ago.

TWST: What about the sell discipline? Is that exactly the same as Berkshire Hathaway?

Mr. Davenport: I wish I knew what Berkshire's sell discipline actually is. Since we follow as closely as we can what Berkshire buys and sells, we will sell our holdings after he sells his. Since we don't know when that will happen, we always act after he does.

TWST: What about the risk factors? Do they have any part of your approach or is it purely dependent on Berkshire Hathaway or do you have any extra risk protection?

Mr. Davenport: We carry a large cash position like Berkshire Hathaway does, and we follow what he does. The cash position helps performance when the market declines. We don't have any predetermined selling price on any of our holdings. One of our holdings, Sherwin-Williams, is a proxy for Benjamin Moore. A Rhode Island judge entered a judgment against Sherwin-Williams the last week of February and this adverse ruling caused the stock price to decline by a double-digit amount. Even though quite a few mutual funds sold their Sherwin-Williams stock, I chose not to sell our shares. In fact, this was a classic buying opportunity to add more shares.

TWST: Your proxy company, in this case Sherwin Williams, if you did decide to sell, would you then buy another proxy, another paint company, to emulate Benjamin Moore?

Mr. Davenport: If I were to sell the holding in the future, I would buy another paint company to take its place. But only if I could find a proxy that has similar characteristics to Benjamin Moore and selling at discount to its fair value.

TWST: Who are your typical investors?

Mr. Davenport: Our typical investors are usually older investors who know who Warren Buffett is and understand the investment philosophy as practiced by Warren. Every investor is trying to buy assets for less than they are really worth. This idea comes from Benjamin Graham and David Dodd in their classic book, Security Analysis (1934). Our shareholders are looking for a mutual fund that follows a disciplined buy and hold approach to investing, and would like to invest like Warren Buffett, but through a mutual fund.

TWST: The Wisdom Fund is not affiliated in any way with Berkshire Hathaway, but do you have any connection with the management of Berkshire Hathaway?

Mr. Davenport: No, we have no association with them at all and our prospectus states on the front page that we are in no way associated with Berkshire Hathaway. We don't want to give anyone the opinion that we are. I have no prior knowledge of any buys or sells of the holdings of Berkshire. We certainly have no inside information. I do own one share of Berkshire Hathaway because I enjoy going to the annual meeting each year in Omaha. I enjoy hearing Mr. Buffett and Mr. Munger speak and meeting other like-minded value investors. I want to make sure that people do realize that we are just trying to follow his investment strategy with no ties to their organization at all.

TWST: One good reason for investing in the Wisdom Fund is that it is much cheaper than buying one share of Berkshire Hathaway.

Mr. Davenport: Our minimum is only $2,000 and $250 for an IRA. Our share price as of 2/28/06 was $12.70 per share and Berkshire's Class B was about $2,886 per share.

TWST: Tell us about the Class B, Class C or any other type of shares in the Wisdom Fund?

Mr. Davenport: We do have four classes of shares. We have a Class A, Class B, a Class C and then our institutional class. The A, B, and C classes are sold primarily through financial and investment firms. Investors can also purchase the Fund through Fidelity Investments, TD Ameritrade, E-Trade and others.

TWST: What have I overlooked?

Mr. Davenport: I think that you've asked a lot of good questions and I really can't think of anything else that I could think of at the moment except that we are trying to create wealth for individuals. It is important for your readers to know what we do not do. We do not try to time the market, we do not jump in and out of hot sectors of the market and we certainly do not invest in momentum stocks. Like Mr. Buffett, we are classic buy and hold investors.

TWST: Are there any other money management firms out there that try to emulate Berkshire Hathaway?

Mr. Davenport: We, in fact, are the only mutual fund out of probably 11,000 mutual funds that actually replicates his portfolio. There are many disciples of Warren Buffett, and I certainly consider myself one. Many of the other managers deviate from Buffett's strategy in some form or fashion. Some of those managers will hold Berkshire in their portfolios. We do not own Berkshire shares in the Fund. So that does make us unique and different, because no one else actually tries to replicate Berkshire Hathaway's portfolio.

TWST: With Berkshire Hathaway as a benchmark, you've still been able to outperform.

Mr. Davenport: That is correct.

TWST: Thank you. (PS)

Note: Opinions and recommendations are as of 3/2/06.

C. DOUGLAS DAVENPORT Atlanta Investment Counsel, LLC 3717 Haddon Hall Road, NW Suite 200 Atlanta, GA 30327 (877) 352-0020

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