THE STEWART REPORT HOTLINE SUMMARY

Monday, July 4, 2005
(Next HotLine Scheduled for Tuesday, August 9, 2005)

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Gold is doing well, I suppose. And, nationwide, the year-to-year escalation in home prices means that everyone in California, Florida and Nevada is either a real estate genius right now, or will be before the end of next week – when they get their brokers’ licenses.

Every criminal I've ever read about – or continue to know personally – is either out on bail, has been recently acquitted, does my taxes or is performing the final hours of their community service. So, we know the American legal system still works.

That's important for the financial markets – critical in fact – because, without these unjust justices and equally just injustices, there would be so much less to talk about … to print … to televise … to read.

Think about it. I mean really think about it.

I actually haven't, but I still know that everything artistic – from rap music and Country music, from classic rock to classical jazz, all the way to Tom Cruise’s rants about Brooke Shields and which Jennifer Ben Affleck married this month – would be adversely affected. Seriously, without REAL rock idols, without REAL film and TV stars, without all manner of REAL pseudo celebrities, how can there be REAL news? And, without REAL NEWS, how can there be tabloid magazines?

Well, obviously there can't. And it's axiomatic that, if the tabloids suffer, the grocery stores that sell the tabloids would suffer, too. The overall economic impact would be large.

Even if we make a 31.5% adjustment for the perversely positive counter-effect of a probable surge in low-cost production values – further diminishing entertainment standards in the already low-rent neighborhoods where “COPS” will likely continue to top TV’s new Fall line-up – the estimated 27% reduction in tabloid sales would spell a total disruption in America's cultural food chain. Predictably, there would be a corresponding incremental decline in the sale of Windex, Dorritos and most every brand of cat litter that doesn't "Smell Good and Taste Great."

In response to these economic statistics, Fed Chairman Alan Greenspan would undoubtedly continue with his current philosophy – you know, the one that led him to raise interest rates by a quarter-point last week. This was the ninth consecutive hike in rates – and it came on the same day that oil hit $60 per barrel and President Bush's approval ratings dipped lower than the number of times he reported for National Guard duty.

Obviously, these events should have prompted dramatic market action – but, amazingly, the Dow Jones Industrial Average continues to trade in a reasonably narrow range. At the time of the last HotLine, it was around 10,450. Since then, it's been as much as 300 points higher – and also as much as 150 points lower. Given this relatively narrow and determinedly undecided trading range, intellectually, it's difficult to say if we’re in a bull market, a bear market, a Bush market or a "blah" market – also known as "The Summer Doldrums."

Indeed, maybe that's all this is … The Summer Doldrums. Or, maybe it's because there has been so little in the way of REAL news.

Either way, this HotLine – quite by accident – turned into a strange little commentary. I hope that no one takes it personally – same as my equally sincere wish that each of you has a good, safe and happy Independence Day weekend!

In fact, maybe it's actually because of Independence Day itself. Perhaps I've spent too much time in the office and not quite enough time on enjoying my friends and family and the fruits of being a capitalist. Oops! That's easily the most farcical line I have ever written! In truth, I have very, very selfishly devoted my life to friends and family and Ferrari cars and the many other finer things that the securities markets (in part, through you) have enabled me to afford.

What is not farcical is my belief in our investments.

I won't tell you they are quote-unquote "solid" because, as you know, my attorney would kill me. And then the SEC would hang me. And rightfully so.

Besides, as you should also know, “solid” bores me – and, with complete disregard for outcome, solid will always bore me!

"Solid" is an Easter egg painted white. "Solid" is the $50 U.S. Savings Bond the Lions Club gave me when I was 13 years old for a speech I wrote titled, "What Freedom Means To Me." Ironically, later, at age 18, I tried to use that same speech to stay out of jail. A couple of hours later, I tried using that same Savings Bond to get out of jail. As per my girlfriend, as per the bondsman, as per the bank, the then-current redemption value was $6.20.

So, yes, I most definitely prefer the speculative. Speculative is good for the same reason that Caesar said, "Fortune favors the bold" – which, even more ironically, was one of the lines I used in the speech to win their cheesy $50 Savings Bond. True story.

But where was I? Oh, yes: “Why are our current stocks far, far better than merely solid?”

The answer: If you play these stocks out – all the way out – meaning all the way to their final conclusion – win, lose or draw – then, Net/Net, at the end of that day, I can virtually assure you that you'll be considerably richer. That’s what I plan to do – and I sincerely hope you play along with me.

As for this Report – or lack thereof?

Well, I certainly appreciate you allowing me to have some fun with words, and to vent a little social comment, as well as prove there's more than one Jon Stewart – and that, even though he made the cover of “Time,” I can at least spell my name rite (that’s a joke, son).

What’s not a joke is the fact that, frankly, since the last HotLine, there's been almost nothing new going on with our companies. Fortunately, what little news there is has all been good – and it’s easily accessible through your broker or by visiting our website: www.stewartreport.com.

As for Friday's quotes and my current recommendations, they are as follows:

International Card Establishment, Inc. (Nasdaq/BB: ICRD) – $0.30 – Long-term BUY

Emergency Filtration Products, Inc. (Nasdaq/BB: EMFP) – $0.47 – HOLD

Amarillo Biosciences, Inc. (Nasdaq/BB: AMAR) – $0.35 – Favorite Speculation: BUY

As always, thank you for listening – and for subscribing.

J. David Stewart
Analyst and Publisher, The Stewart Report

Note: David’s HotLines are also available 24/7 by dialing (949) 583-6057, and
entering your subscriber-protected, 2-digit Pass Code at the prompt.

Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Any opinions expressed herein are statements of our judgment on this date and are subject to change without notice. Acting as an investor, and also as a consultant to the Company, David Stewart purchased 250,000 shares of Amarillo Biosciences, restricted under Rule 144. J. David Stewart currently owns 100,000 shares of ICRD common stock. Affiliates of The Stewart Report may also have additional long or short positions in these and other securities discussed herein, including warrants and/or options, and may buy or sell same at their own discretion. This report contains or may contain forward-looking statements within the meaning of the "safe-harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. This report is intended for informational purposes only and does not have regard for or take into consideration the reader's investment objective, financial situation or suitability for this security. Consult with your financial advisor and perform your own due diligence. Copyright © The Stewart Report, 2005.