ARMSTRONG ASSOCIATES INC, 485APOS, 1996-08-30

ARMSTRONG ASSOCIATES INC
485APOS, 1996-08-30

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MANUALLY SIGNED
THIS DOCUMENT CONTAINS 50 PAGES.

FILE NO. 2-27539
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 30, 1996

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 41 [ x ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 27 [ x ]
(Check appropriate box or boxes)

ARMSTRONG ASSOCIATES, INC.
(Exact Name of Registrant as Specified in Charter)

750 North St. Paul, LB 13, Suite 1300, Dallas, Texas 75201
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (214) 720-9101

C. K. Lawson Copy to:
President
Armstrong Associates, Inc. Byron F. Egan
750 North St. Paul, LB 13 Jackson & Walker, L.L.P.
Suite 1300 901 Main Street, Suite 6000
Dallas, Texas 75201 Dallas, Texas 75202-3797
(Name and Address for Agent for Service)

Approximate Date of Proposed Public Offering: October 29, 1996
<TABLE>
<CAPTION>
It is proposed that this filing will become effective (check appropriate box)
<S> <C>
___immediately upon filing pursuant to paragraph (b) ___on (date) pursuant to paragraph (a)(i)
___on (date) pursuant to paragraph (b) ___75 days after filing pursuant to paragraph (a)(ii)
_X_60 days after filing pursuant to paragraph (a)(i) ___on (date) pursuant to paragraph (a)(ii) of Rule 485.
</TABLE>

If appropriate, check the following box:
___ this post-effective admendment designates a new effective date for a
previously filed post-effective amendment

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT BEING OFFERING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
---------------- ---------- -------- -------------- ---
<S> <C> <C> <C> <C>
Common Stock ($1.00 Par Value) 300,000 Shares $10.15* $3,045,000* $1,050.00*

* Proposed maximum offering price per share, proposed maximum aggregate
offering price and registration fee calculated in accordance with Rule
457(d) on the basis of the registrant's per share net asset value on
August 22, 1996.
</TABLE>

CROSS REFERENCE SHEET

Between Items of Part A of Form N-1A and Prospectus

Form N-1A Item Location in Prospectus
- -------------- ----------------------
<S> <C>
1. Cover Page . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . Summary of Fund Expenses
3. Condensed Financial Information. . . . . Condensed Financial Information
4. General Description of Registrant. . . . Introduction to Armstrong
Associates, Inc.; Investment Objective and Policies of
Armstrong; Information on Shares of the Fund
5. Management of the Fund . . . . . . . . . Operation of the Fund; Brokerage Allocation
5A. Management's Discussion of
Fund Performance . . . . . . . . . . . . Management's Discussion of Fund Performance
6. Capital Stock and Other Securities . . . Information on Shares of the
Fund; Dividends, Capital Gains Distributions and Federa
Tax Information
7. Purchase of Securities Being Offered . . Pricing of Fund Shares for Purchase and Redemption;
How to Purchase Shares of the Fund;
Tax-Sheltered Retirement Plans; Shareholder Services;
Information on Shares of the Fund
8. Redemption or Repurchase . . . . . . . . Redemption of Fund Shares
9. Legal Proceedings. . . . . . . . . . . . *

BETWEEN ITEMS OF PART B OF FORM N-1A AND STATEMENT OF ADDITIONAL INFORMATION

Location in Statement
Form N-1A Item of Additional Information
- -------------- -------------------------

10. Cover Page . . . . . . . . . . . . . . . Cover Page
11. Table of Contents. . . . . . . . . . . . Table of Contents
12. General Information and History. . . . . *
13. Investment Objectives and Policies . . . Investment Objective and Policies
14. Management of the Registrant . . . . . . Directors and Officers
15. Control Persons and Principal
Holders of Securities. . . . . . . . . Directors and Officers
16. Investment Advisory and Other Services . Investment Adviser; Other Information
17. Brokerage Allocation . . . . . . . . . . Brokerage Allocation
18. Capital Stock and Other Securities . . . Information on Shares of the Fund (in the Prospectus)
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . Pricing of Shares; Redemption of Shares
20. Tax Status . . . . . . . . . . . . . . . Dividends and Federal Income Taxes
21. Underwriters . . . . . . . . . . . . . . *
22. Calculation of Performance Data. . . . . Calculation of Performance Data
23. Financial Statements . . . . . . . . . . Financial Statements

* Inapplicable or negative

</TABLE>

[LOGO] ARMSTRONG ASSOCIATES INC.

A NO-LOAD MUTUAL FUND
Armstrong Associates is a no-load mutual fund. There are no sales
commissions charged by the Fund when you buy or redeem shares.

INVESTMENT OBJECTIVE
Armstrong's investment objective is capital growth. The Fund
seeks to obtain this objective through emphasis on investments in
common stocks and by varying the proportions of common stocks and
short-term debt investments in its portfolio.

PROSPECTUS INFORMATION
This Prospectus concisely sets forth information an investor
should know about the Fund before investing. It should be
retained for future reference.

A Statement of Additional Information about the Fund has been
filed with the Securities and Exchange Commission and is
available without charge from the Fund upon request.

For additional information call or write:

Armstrong Associates, Inc.
750 N. St. Paul, LB 13
Suite 1300
Dallas, Texas 75201
Telephone (214) 720-9101

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this Prospectus and the Statement of Additional Information is
October 28, 1996.

[LOGO] ARMSTRONG ASSOCIATES INC.

SUMMARY OF FUND EXPENSES
The following table illustrates all expenses and fees that a
shareholder of the Fund will incur. The purpose of this table is to
assist the investor in understanding the various expenses that an
investor in the Fund will bear directly or indirectly.

Shareholder Transaction Expenses

Sales Load Imposed on Purchases none
Sale Load Imposed on Reinvested
Dividends none
Deferred Sales Load none
Redemption Fees none

Annual Fund Operating Expenses
(as a percentage of average net assets)

Management Fees 0.80%
12b-1 Fees none
Accounting Services Fees 0.12%
Other Expenses 0.53%
-------
Total Operating Expenses 1.44%
=======

The following example illustrates the expenses that you would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate
of return and (2) redemption at the end of each time period. As noted in
the table above, the Fund charges no redemption fees of any kind.

1 Year 3 Years 5 Years 10 Years
------ ------- ------- ---------
$15 $46 $80 $182

This example assumes that the percentages set forth under "Annual Fund
Operating Expenses" remain the same during each of the periods shown, and
applies such percentages to a hypothetical $1,000 investment. The example
does not reflect or project investment return or the resulting value of an
investment. The assumed 5% annual rate of return is required by applicable
rules to be applied by all investment companies in projecting assumed
expenses beyond the first year and serves to reflect an assumed increase
in expenses over the years. Such 5% assumption does not in any way reflect
prior investment performance or project future investment performance.
Actual expenses may be greater or lesser than those shown.

CONDENSED FINANCIAL INFORMATION
The following condensed financial information has been audited by Grant
Thornton LLP, independent certified public accountants, beginning with the
year ended June 30, 1992. The report of such independent certified public
accountants appears in the Statement of Additional Information. The
information for years prior to 1992 has been audited by other independent
auditors whose report thereon is not included.

1975 1976 1977 1978 1979
---- ---- ---- ---- ----

Net asset value
Beginning of period $2.74 $3.81 $5.30 $5.68 $6.50
Income (loss) from
investment operations
Net investment
income .07 .03 .04 .08 .16
Net Realized and
unrealized gains
(losses) on investments 1.04 1.53 .38 .78 .84
----- ----- ----- ----- -----

Total from investment
operations 1.11 1.56 .42 .86 1.00
Less distributions
Dividends from net
investment income .04 .07 .04 .04 .11
Distributions from net
realized gains -- -- -- -- .33
----- ----- ----- ----- -----

Net asset value,
end of period $3.81 $5.30 $5.68 $6.50 $7.06
===== ===== ===== ===== =====

Total return 41.46% 42.06% 8.05% 15.31% 15.17%
Ratios/supplemental data
Net assets, end of
period (000)'s $2,892 $3,785 $3,649 $3,886 $4,538
Ratio of expenses to
average net assets 1.5 1.5 1.5 1.5 1.5
Ratio of net investment
income to average
net assets 2.7 .8 1.9 1.6 2.3
Portfolio turnover rate 210% 113% 113% 151% 97%

(b) The fund had no senior securities or outstanding debt during the
twenty-two year period ended June 30, 1996.

See accompanying report of independent certified public accountants.

ARMSTRONG ASSOCIATES INC.

Per Share Income and Capital Changes for a Share Outstanding Throughout the Year Ended June 30 (a)

1980 1981 1982 1983 1984 1985 1986 1987
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>

$ 7.06 $ 7.74 $ 9.37 $ 7.10 $ 10.22 $ 7.29 $ 7.65 $ 8.72
.23 .24 .41 .21 .16 .24 .14 .10
1.40 2.62 (1.28) 3.72 (2.51) 1.02 1.17 1.51
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
1.63 2.86 (.87) 3.93 (2.35) 1.26 1.31 1.61
.13 .23 .19 .43 .20 .14 .24 .16
.82 1.00 1.21 .38 .38 .76 -- .51
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 7.74 $ 9.37 $ 7.10 $ 10.22 $ 7.29 $ 7.65 $ 8.72 $ 9.66
24.08% 38.04% (9.87)% 61.27% (24.01)% 19.10% 17.80% 20.00%
5,777 8,277 7,669 12,869 9,788 10,957 11,714 12,294
1.6 1.5 1.7 1.6 1.6 1.7 1.6 1.7
3.2 2.7 5.6 2.4 1.9 3.1 1.6 1.0
131% 60% 34% 59% 96% 53% 54% 51%
</TABLE>

[WIDE TABLE CONTINUED FROM ABOVE]
<TABLE>
<CAPTION>

1988 1989 1990 1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 9.66 $ 7.17 $ 7.74 $ 7.38 $ 6.87 $ 7.08 $ 8.26 $ 8.19 $ 9.70
.09 .24 .23 .16 .06 .02 -- .02 .05
(.53) .67 .19 (.27) .33 1.19 .10 2.12 1.10
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(.44) .91 .42 (.11) .39 1.21 .10 2.14 1.15
.14 .11 .24 .23 .15 .02 -- .04 .02
1.91 .23 .54 .17 .03 .01 .17 .59 .38
$ 7.17 $ 7.74 $ 7.38 $ 6.87 $ 7.08 $ 8.26 $ 8.19 $ 9.70 $ 10.45
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(6.27)% 13.23% 5.93% (0.92)% 5.79% 17.12% 1.13% 27.32% 12.09%
10,435 9,887 9,770 9,228 9,366 9,680 9,255 11,961 13,100
2.0 1.9 1.8 1.9 1.9 1.8 1.8 1.8 1.4
1.3 3.0 2.9 2.3 .8 .2 -- .2 .5
20% 46% 44% 24% 35% 17% 15% 12% 19%

</TABLE>

[LOGO] ARMSTRONG ASSOCIATES INC.

WHAT IS A MUTUAL FUND?
Briefly stated, a mutual fund combines money from investors and invests
in a portfolio of securities selected in line with the particular
investment objective of the fund. Investors own an undivided, pro-rata
interest in the portfolio, represented by the shares of the fund. In
the case of a no-load fund, such as Armstrong Associates, fund shares
are purchased and redeemed at net asset value, which means that no
sales commissions are added to or deducted from the value of the fund
shares on purchase or redemption.

INTRODUCTION TO ARMSTRONG ASSOCIATES, INC.
Armstrong Associates, Inc. ("Armstrong" or the "Fund") is a no-load,
diversified, open-end mutual fund which offers investors a
participation in a diversified portfolio of common stocks that is
professionally managed with the objective of capital growth.

Investors in the Fund have an investment that is liquid. Fund shares
can be purchased or redeemed at net asset value with no sales
commissions. In addition to providing diversification, liquidity and
professional management, the Fund provides the recordkeeping and
brokerage commission negotiation and arranges for safekeeping of
securities involved with the day-to-day operation of a securities
portfolio.

The Fund is designed for long-term investors who are seeking the
opportunity for higher long-term investment returns than the returns
available through fixed income investments and who can accept the
inherent market volatility associated with investments in common stocks
selected for capital growth. While the Fund shares can be expected to
fluctuate based on market conditions, Armstrong is not designed as a
vehicle for playing short-term market swings. Dividend and interest
income from the investors of the Fund is incidental to the primary
objective of capital growth.

INVESTMENT OBJECTIVE AND POLICIES OF ARMSTRONG
The investment objective of the Fund is capital growth. The Fund seeks
to obtain its investment objective through emphasis on investments in
common stocks and by varying the proportions of common stocks and
short-term debt investments in its portfolio.

The Fund normally invests in common stocks which offer the prospect of
earnings growth or asset enhancement over a one to three year period.
However, the Fund may sell securities within a relatively short period
if developments with the investment, the equity markets or the economy
indicate that a change would be advisable.

Short-term debt investments are utilized to reduce portfolio exposure
to equity markets and to obtain a return on funds not committed to
common stocks. Although common stocks are emphasized in its portfolio,
the Fund may also invest in securities convertible into or exercisable
for common stocks.

There can be no assurance that the Fund will achieve its objective of
capital growth. The market value of the securities in the portfolio of
any mutual fund which invests in stocks will fluctuate. The principal
risk factor associated with any investment in such a mutual fund is
that the market value of the portfolio securities may decrease and
result in a decrease in the value of the fund shares.

ARMSTRONG ASSOCIATES INC.

As a matter of fundamental policy, the Fund will not (1) acquire more
than 10% of any class of securities of any issuer, (2) with respect to
75% of its total assets, invest more than 5% of the value of its total
assets at the time of purchase in the securities of any one issuer, (3)
invest more than 25% of its assets in any one industry, (4) invest more
than 15% of the value of its total assets in securities with a limited
trading market, (5) make short sales of securities, or (6) borrow money
except for temporary purposes and then only in an amount not exceeding
5% of the value of the total assets of the Fund at the time when the
loan is made. These fundamental policies, as well as the investment
objective of the Fund, will not be changed unless authorized by a vote
of the majority of the outstanding shares of the Fund, although the
policies and techniques for seeking to attain the objective of the Fund
may be changed without shareholder approval.

MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE AND HISTORICAL DATA

Equity investments had a good year overall for the twelve month period
ending June 30, 1996, as measured by the broader market indices
although many technology related stocks, which had led the market
during the previous fiscal year, declined sharply as investors adjusted
to lower revenue growth and earning expectations in the face of slowing
rates of growth in demand and expanding capacity. Interest sensitive
stocks also lost ground during the first half of calendar 1996 as
interest rates climbed from the lows seen in 1995.

Despite some lack of visibility as to the near term direction of the
market during the year, stocks, on balance, outperformed fixed income
and cash equivalent investments. Specifically, the broad-based Value
Line Index, representing approximately 1,700 stocks (unweighted-price
only), advanced +13.88%. Bond prices showed a general price decline for
the year as reflected by the +4.57% total return recorded by the Lehman
Brothers U.S. Treasury Composite Index. For Comparison purposes, the
average non-government taxable money market fund tracked by Lipper
Analytical Services, Inc., had a return of +5.02%. Armstrong
Associates, following relatively strong performance for the 1995 fiscal
year, had a total return of +12.09% for the twelve months ending June
30, 1996. Cash equivalents that were held in Armstrong's portfolio as a
hedge against possible market vulnerability along with market price
declines in certain technology/communications stocks held back
investment performance while consumer non-durable issues, computer
software and speciality chemical companies and corporate restructuring
candidates contributed particularly positive results to Armstrong's
portfolio.

[LOGO] ARMSTRONG ASSOCIATES INC.

COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
ARMSTRONG ASSOCIATES, INC., THE S&P 500 INDEX
AND THE VALUE LINE COMPOSITE INDEX
FOR THE 10 YEARS ENDING JUNE 30, 1996

COMPARISON OF CHANGE OF $10,000 INVESTED IN ARMSTRONG ASSOCIATES, INC. THE s&p
500 AND THE VALUE LINE COMPOSITE FOR THE 10 YEARS ENDING JUNE 30, 1996.

[GRAPHIC OMITTED]

AVERAGE ANNUAL TOTAL RETURN
OF ARMSTRONG ASSOCIATES, INC.
FOR PERIODS ENDING JUNE 30, 1996

1 year 5 Year 10 Year
12.09% 12.68% 9.54%

A -- Armstrong Associates (US) N/N GRS USD LMP(10000) 23896.53
B -- Value Line Composite *(NX) N/N GRS USD LMP(10000) 14438.60
C -- S&P 500 (Composite) (NX) N/N GRS USD LMP(10000) 36403.73

THIS VALUE OF UNITS MAY GO DOWN AS WELL AS UP

FISCAL YEAR ENDED JUNE 30

A -- ARMSTRONG ASSOCIATES
B -- S&P 500 (COMPOSITE)
C -- VALUE LINE COMPOSITE

PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. DATA SOURCE:
MICROPAL, INC.

ARMSTRONG ASSOCIATES INC.

COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
ARMSTRONG ASSOCIATES, INC., THE S&P 500 INDEX
AND THE VALUE LINE COMPOSITE INDEX
FOR THE 22 YEARS ENDING JUNE 30, 1996

COMPARISON OF CHANGE OF $10,000 INVESTED IN ARMSTRONG ASSOCIATES, INC. THE S&P
500 AND THE VALUE LINE COMPOSITE FOR THE 22 YEARS ENDING JUNE 30, 1996.

[GRAPHIC OMITTED]

AVERAGE ANNUAL TOTAL RETURN
OF ARMSTRONG ASSOCIATES, INC.
FOR PERIODS ENDING JUNE 30, 1996

22 Years
15.63%

A -- Armstrong Associates (US) N/N GRS USD LMP(10000) 182883.86
B -- Value Line Composite *(NX) N/N GRS USD LMP(10000) 54859.09
C -- S&P 500 (Composite) (NX) N/N GRS USD LMP(10000) 188807.75

THIS VALUE OF UNITS MAY GO DOWN AS WELL AS UP

FISCAL YEAR ENDED JUNE 30

A -- ARMSTRONG ASSOCIATES
B -- S&P 500 (COMPOSITE)
C -- VALUE LINE COMPOSITE

Past performance is not predictive of future performance. Data Source:
Micropal, Inc.

The graphs set forth above compare the change in value over the past
ten and twenty-two years of $10,000 invested in the Fund compared to
the same investment over the same periods in the Standard & Poors
Composite Index of 500 Stocks (the "S&P 500") and the Value Line
Composite Index, which consists of approximately 1,700 issues (the
"Value Line Index"). The graphs assume that investment in the Fund was
made at the Fund's net asset value (the Fund has no sales charge and no
redemption charge) at the beginning of the 10 and 22 year periods and
reflect the net asset value of the investment at the end of each

[LOGO] ARMSTRONG ASSOCIATES INC.

of the years indicated in the period with all dividends and
distributions by the Fund reinvested at the Fund's net asset value on
the applicable reinvestment dates. Brokerage fees paid by the Fund on
portfolio transactions and management fees and other operating expenses
are reflected in the results shown for the Fund. In contrast, the S&P
500 and the Value Line Index are unmanaged, expense-free, broad-based
indices which serve only as bench-marks for the performance of the
stock market and are not securities available for purchase by
investors. The S&P 500 is adjusted to reflect reinvestment of dividends
paid by securities in the index, but the Value Line Index is not so
adjusted and reflects only changes in the prices of the securities
covered thereby. Investors should, therefore, note that the two indices
are not comparable to each other in respect of the assumed reinvestment
of dividends and that neither index is comparable to the Fund because
neither index reflects any transaction or management expenses in
relation to the performance of the securities in the index.

The Fund has never been managed to emulate any particular market index.
The Fund seeks to obtain its objective of capital growth through
investments in common stocks and by varying the proportions of common
stocks and short-term debt investments in its portfolio. The short-term
debt investments are used to reduce portfolio exposure to equity
markets and to obtain a return on funds not committed to common stocks.
These short-term debt investments lend to serve as a damper on the
Fund's net asset growth during period of rising markets. The S&P 500
and the Value Line Index both are fully invested in the equities
surveyed at all times. The S&P 500 is a market value-weighted index
and, as a result, companies with the largest market capitalizations
have a disproportionate impact on the overall performance of the index,
while stocks included in the Value Line Index are equally weighted to
reflect the average price change in the stocks included in the index.

The information set forth above should be considered in the light of
the Fund's investment policies and objectives and other information
contained in this prospectus. The results shown are a record of the
past and should not be regarded as a representation of future
performance. No adjustments have been made for income taxes that might
have been payable by shareholders on dividends and capital gains
distributions. Past performance is not predictive of future
performance.

OPERATION OF THE FUND
DIRECTORS AND OFFICERS
The officers of the Fund manage its day-to-day operations, and are
directly responsible to the Fund's Board of Directors. The Board of
Directors, elected by shareholders, is generally responsible for the
management of the Fund and elects its officers. The directors and
officers of the Fund are:

EUGENE P. FRENKEL, M.D. -- Director of the Fund; Professor of Internal
Medicine and Radiology, Southwestern Medical School.

C. K. LAWSON -- President, Treasurer and a director of the Fund and of
Portfolios, Inc., the Fund's investment adviser (the "Adviser"). Mr.
Lawson is a chartered financial analyst.

DOUGLAS W. MACLAY Director of the Fund and President of Maclay
Properties Company, real estate investments.

R.H. STEWART MITCHELL, JR. Director of the Fund; former Vice Chairman
of the Board of Directors of Tracy-Locke/BBDO, advertising and public
relations, and now retired.

CRUGER S. RAGLAND Director of the Fund and President of Ragland
Insurance Agency, Inc.

ANN REED DITTMAR Director of the Fund and a Private investor.

CANDACE L. KING Vice President and Secretary of the Fund and of the
Adviser.

ARMSTRONG ASSOCIATES INC.

INVESTMENT ADVISER
The investments of the Fund are managed by Portfolios, Inc. (the
"Adviser"). The Adviser was incorporated in 1971 and is engaged in the
business of providing investment management services to individual and
institutional investors. As compensation for its investment management
services to the Fund, the Adviser is paid monthly a fee at the annual
rate of 0.8% of the Fund's average daily net assets for each fiscal
year. See "Condensed Financial Information." The Adviser furnishes to
the Fund, without additional charge, office space, local telephone
service and utilities. All other expenses of the Fund's operations are
the responsibility of the Fund.

The Adviser's address is 750 N. St. Paul, LB 13, Suite 1300, Dallas,
Texas 75201. It is a wholly-owned subsidiary of Lawson Investments,
Inc., a corporation controlled by C. K. Lawson and whose business
relates primarily to the Adviser.

C. K. Lawson is the individual employed by the Adviser who is primarily
responsible for the day-to-day management of the Fund's portfolio. Mr.
Lawson has been primarily responsible for the management of the Fund's
portfolio since the Adviser's formation in 1971. During the past five
years, Mr. Lawson has been the President, Treasurer and a director of
the Fund and the Adviser.

TRANSFER AGENT, DIVIDEND DISBURSING AGENT, CUSTODIAN AND ACCOUNTING
SERVICES
In addition to acting as investment adviser, Portfolios, Inc. acts as
the Fund's transfer agent ("Transfer Agent") and dividend disbursing
agent ("transfer agent services") and also provides certain accounting
services to the Fund. For its accounting services, the Adviser receives
an annual fee of $16,000 and for its transfer agent services, it
receives $8,400 per annum.

The Union Bank of California, N.A., 475 Sansome Street, 15th Floor, San
Francisco, California 94111 serves as the custodian of the Fund's
portfolio securities and is custodian for the Fund's tax-sheltered
retirement plans, including Individual Retirement Accounts and
Prototype Profit Sharing Plans.

PRICING OF FUND SHARES FOR PURCHASE AND REDEMPTION
The purchase and redemption price of the Fund's shares is equal to the
Fund's net asset value per share. The Fund determines its net asset
value per share by subtracting the Fund's liabilities (including
accrued expenses and dividends payable) from its total assets (the
market value of the securities the Fund holds plus cash and other
assets, including interest accrued but not yet received and dividends
"ex" but not paid) and dividing the result by the total number of
shares outstanding. The net asset value per share of the Fund is
calculated following the close of trading on the New York Stock
Exchange each day the Exchange is open for business.

HOW TO PURCHASE SHARES OF THE FUND
Initial investments: To purchase shares of Armstrong for an account
which does not currently own Armstrong shares, you should complete the
Purchase Application on pages 13 and 14 and mail it together with a
check made payable to Armstrong Associates, Inc., to the Fund at 750 N.
St. Paul, LB 13, Suite 1300, Dallas, Texas 75201. There is a $250
minimum on initial investments.

[LOGO] ARMSTRONG ASSOCIATES INC.

SUBSEQUENT INVESTMENTS: To purchase additional shares for an existing
Armstrong account, you should send a check made payable to Armstrong
Associates, Inc., and include your Armstrong shareholder account name
and number. Checks can be sent to Armstrong Associates, Inc., 750 N.
St. Paul, LB 13, Suite 1300, Dallas, Texas 75201.

PURCHASE PRICE AND EFFECTIVE DATE: Your shares will be priced at the
net asset value per share next determined after your order has been
received by the Fund and accepted. The Transfer Agent will mail
confirmation of your purchase to your account address after receipt of
your order and funds. The Fund reserves the right to refuse any order
for the purchase of its shares.

STOCK CERTIFICATES: Stock certificates for your shares will not be
issued unless you request them. Certificates for fractional shares will
not be issued. In order to facilitate redemptions and transfers, most
shareholders elect not to receive certificates. If you lose your
certificate, you may incur an expense to replace it.

REDEMPTION OF FUND SHARES
IF A STOCK CERTIFICATE HAS NOT BEEN ISSUED
If no certificate for your shares has been issued, redemption can
normally be accomplished by your written request to the Fund with the
appropriate shareholder signature guarantee. Under certain
circumstances additional documentation may be required.

IF A STOCK CERTIFICATE HAS BEEN ISSUED
You can redeem shares for which a certificate has been issued by
written request to the Fund accompanied by the certificate representing
the shares being redeemed properly endorsed for transfer with the
appropriate shareholder signature guarantee. Under certain
circumstances additional documentation may be required.

TIMING OF REDEMPTION
Shares are redeemed at the net asset value next determined after the
receipt in proper form of your written request for redemption
accompanied by all necessary documentation.

DISTRIBUTION OF PROCEEDS
Proceeds are normally mailed within seven days of receipt of the
written redemption request along with the proper documentation.
Proceeds are mailed to the shareholder's address of record unless
specific written instructions are received from the shareholder to the
contrary.

SIGNATURE GUARANTEES
To ensure that you are the person who has authorized a redemption from
your account, the Fund requires that the signatures of the appropriate
persons signing or endorsing any redemption request or stock
certificate be duly guaranteed by a commercial bank, a member firm of a
national securities exchange or another eligible guarantor institution.

TRANSACTIONS THROUGH BROKERS
Investors who purchase or redeem shares of the Fund through
broker-dealers may be subject to service fees imposed by them with
respect to the services they provide. The Fund has no control over or
involvement with any charges which any broker-dealer may impose. There
are no fees charged by the Fund if shares are purchased or redeemed
directly from the Fund.

ARMSTRONG ASSOCIATES INC.

DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND FEDERAL TAX INFORMATION
Armstrong earns income from dividends and interest on its investments.
The Fund also realizes capital gains or losses from the sale of
securities. It is the policy of the Fund to distribute substantially
all of its net income and net capital gains each year. These
distributions ordinarily will be taxable, although shareholders not
subject to Federal income tax will not be required to pay taxes on
distributions from the Fund. Advice as to the Federal income tax status
of dividends and distributions will be mailed annually to each
shareholder.

The Fund intends to continue to qualify for treatment as a "regulated
investment company" under Federal tax law. By so qualifying, the Fund
will not be liable for Federal income taxes on its income to the extent
distributed to shareholders, thereby avoiding double taxation of the
income of the Fund.

Unless you elect otherwise, dividends and capital gains distributions
will be reinvested, which means they will be paid to you in additional
shares of the Fund which will be credited to your account.

BROKERAGE ALLOCATION
In the allocation of brokerage, it is the Fund's policy to seek the
best price and execution. The Fund, however, does not consider that
this objective is served by seeking the lowest commission rates
available. It gives preference, and may pay higher commission rates, to
brokers which, in addition to having the capability of obtaining the
best price for the security itself and of executing the order with
speed, efficiency and confidentiality, also provide research and
statistical and similar information and services to the Adviser.
Subject to the policy of seeking best price and execution, sales of
Fund shares also may be a factor considered in the selection of brokers
to execute portfolio transactions.

TAX-SHELTERED RETIREMENT PLANS
The Fund offers prototype tax-sheltered retirement plans for
investments in shares of the Fund. The prototypes available include:

Individual Retirement Account ("IRA")

Defined Contribution Plans for corporations, partnerships and
proprietorships.

Anyone interested in establishing a retirement plan should request
further information, including copies of the plan documents and more
detailed descriptions of the plans, from the Fund.

[LOGO] ARMSTRONG ASSOIATES INC.

SHAREHOLDER SERVICES
SYSTEMATIC CASH WITHDRAWAL PLAN: A shareholder may establish a
systematic cash withdrawal plan under which the Fund's transfer agent,
acting as the shareholder's agent, will hold all of his shares of the
Fund and redeem sufficient shares to send regular monthly payments to
him in any designated amount (not less than $50).

BANK DRAFT PURCHASE PLAN: After a minimum initial investment of $250, a
shareholder may authorize investments in additional Fund shares which
are automatically made through the shareholder's checking account via
bank draft each month or quarter.

FURTHER INFORMATION: Additional information regarding the Systematic
Cash Withdrawal Plan and the Bank Draft Purchase Plan may be obtained
from the Fund.

INFORMATION ON SHARES OF THE FUND
The Fund was incorporated under Texas law in 1967 and has an authorized
capital of 6,000,000 shares of common stock, par value $1 per share.
Each share outstanding is entitled to one vote at all meetings of
shareholders (cumulative voting is not permitted) and to share equally
in dividends and other distributions and in the Fund's net assets on
liquidation. Shares when issued will be fully paid and non-assessable,
will have no preemptive rights and will be redeemable as set forth
under "Redemption of Fund Shares." Shareholder inquiries should be made
to Armstrong Associates, Inc., 750 N. St. Paul, LB 13, Suite 1300,
Dallas, Texas 75201 (telephone (214) 720-9101).

ADDITIONAL INFORMATION
The Statement of Additional Information includes the Fund's financial
statements and further details about the management and operation of
the Fund and is available from the Fund on request.

[LOGO] ARMSTRONG ASSOCIATES INC.

PURCHASE APPLICATION
See page 15 for instructions

TO OPEN ACCOUNT
My check for $______ (minimum $250 on initial investment) made payable
to Armstrong Associates, Inc. is enclosed to purchase shares of
Armstrong Associates, Inc. at the net asset value applicable when my
order is received and accepted.

REGISTRATION
Please register my shares as follows (see page 15 for registration
instructions)

----------------------------------------------------------------------
name
----------------------------------------------------------------------
street address
----------------------------------------------------------------------
city state zip
----------------------------------------------------------------------
home telephone (including area code)
----------------------------------------------------------------------
business telephone (including area code)
----------------------------------------------------------------------

SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER

----------------------------------------------------------------------

DIVIDEND REINVESTMENT
____Reinvest all my dividends and capital gains distributions in full
and fractional shares.
____Reinvest all my capital gains distributions in full and fractional
shares but send my dividends to me in cash.
____Remit all dividends and distributions to me in cash.

STOCK CERTIFICATES
All shares purchased will be credited to the shareholder's account at
the Fund. A certificate for any number of full shares in the account
may be obtained at any time by written request to the Fund. No
fractional shares will be issued.

(over)

[LOGO] ARMSTRONG ASSOCIATES INC.

SIGNATURE INFORMATION
Your signature should correspond to the name used in registration. If
there are co-owners, both must sign.

CERTIFICATION AND ACKNOWLEDGEMENT
I acknowledge that I have received a copy of the current prospectus of
Armstrong Associates.

I CERTIFY, UNDER PENALTIES OF PERJURY, THAT THE TAX
IDENTIFICATION/SOCIAL SECURITY NUMBER GIVEN ABOVE IS CORRECT AND I AM
NOT SUBJECT TO BACK-UP WITHHOLDING (SEE PAGE 15).

THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY
PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO
AVOID BACKUP WITHHOLDING.

X______________________________ X____________________________________
signature of applicant signature of co-owner (if applicable)

_______________________________
date

[LOGO] ARMSTRONG ASSOCIATES INC.

INSTRUCTIONS FOR OPENING ACCOUNT
Complete the Purchase Application on pages 13 and 14 and mail it,
together with your check made payable to Armstrong Associates, Inc.,
to:

Armstrong Associates, Inc.
750 N. St. Paul, LB 13
Suite 1300
Dallas, Texas 75201

Call Armstrong at (214) 720-9101 if you have any questions on
completing the Purchase Application.

DO NOT USE THE PURCHASE APPLICATION ON PAGES 13 AND 14 TO OPEN A KEOGH,
IRA OR CORPORATE PROFIT SHARING ACCOUNT. APPROPRIATE FORMS FOR THESE
TAX SHELTERED ACCOUNTS ARE AVAILABLE ON REQUEST.

REGISTRATION INSTRUCTIONS (Purchase by one individual)
State applicant's full name. A married woman must use her own given
name. Example: Mrs. Jane S. Jones (NOT Mrs. John R. Jones)

JOINT REGISTRANTS
1. JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP AND NOT AS TENANTS IN
COMMON. When two persons register shares jointly with the desire that
the survivor receive total holdings on the death of the other, shares
should be registered in this manner. Example: "John R. Jones and Jane
S. Jones, JT.TEN.WROS."

2. TENANTS IN COMMON. Where each registrant wants his position to go to
his estate in the event of his death, shares should be registered in
this manner. Example: "John R. Jones and Jane S. Jones, ATIC."

Joint tenants with rights of survivorship will be assumed if shares are
registered jointly and no specification is made.

CUSTODIAN FOR A MINOR
The following form of registration should be used: "Robert Smith (one
adult only) as custodian for Nancy Smith (one minor only) under (state
of residence of minor) Uniform Gifts to minors Act." THE TAX
IDENTIFICATION NUMBER PROVIDED SHOULD BE THAT OF THE MINOR.

PARTNERSHIPS
Accounts may be registered in the name of a partnership. The
application must be signed by a duly authorized partner.

CORPORATIONS
Shares to be registered in the name of a corporation must be registered
in the exact legal title of the organization and the application must
be signed by a duly authorized officer.

BACKUP WITHHOLDING
You are not subject to backup withholding if the Internal Revenue
Service (a) has not notified you that you are subject to such
withholding or (b) has notified you that you are no longer subject to
such withholding. If you are subject to backup withholding, cross out
the words "and that I am not subject to backup withholding" on page 14
(Purchase Application) above the signature, and the appropriate
withholding instructions will be applied to your account.

[LOGO] ARMSTRONG ASSOCIATES INC.

TABLE OF CONTENTS
Page No.
Summary of Fund Expenses.........................2
Condensed Financial Information................2-3
What is a Mutual Fund?...........................4
Introduction to Armstrong Associates, Inc........4
Investment Objective and Policies
of Armstrong..................................4
Management's Discussion of
Fund Performance and Historical Data........5-8
Operation of the Fund..........................8-9
Pricing of Fund Shares for Purchase
and Redemption................................9
How to Purchase Shares of the Fund............9-10
Redemption of Fund Shares.......................10
Dividends, Capital Gains Distributions
and Federal Tax Information..................11
Brokerage Allocation............................11
Tax-Sheltered Retirement Plans..................11
Shareholder Services............................12
Information on Shares of the Fund...............12
Additional Information..........................12
Purchase Application.........................13-14
Instructions for Purchase Application...........15

[LOGO] ARMSTRONG ASSOCIATES INC.

750 N. St. Paul, LB 13
Suite 1300
Dallas, Texas 75201

[LOGO] INVESTMENT COMPANY INSTITUTE

[LOGO] ARMSTRONG ASSOCIATES INC.

PROSPECTUS

October 29, 1996

Rule 497(c)
File No. 2-27539

ARMSTRONG ASSOCIATES, INC.
750 North St. Paul, LB 13, Suite 1300
Dallas, Texas 75201
Telephone (214) 720-9101

STATEMENT OF ADDITIONAL INFORMATION

Armstrong Associates, Inc. is a no-load mutual fund which continuously
offers its shares to the public at the net asset value per share next computed
after receipt of an order. The Fund is a diversified, open-end investment
management company whose investment objective is capital growth.

This Statement of Additional Information of the Fund is not a prospectus
and should be read in conjunction with the Prospectus of the Fund (the
"Prospectus") which has been filed with the Securities and Exchange Commission.
The Prospectus can be obtained by calling or by writing the Fund at the above
telephone number or address.

TABLE OF CONTENTS
Page

Investment Objective and Policies. . . . . . . . . 2
Directors and Officers . . . . . . . . . . . . . . 3
Investment Adviser . . . . . . . . . . . . . . . . 4
Brokerage Allocation . . . . . . . . . . . . . . . 5
Pricing of Shares. . . . . . . . . . . . . . . . . 6
Redemption of Shares . . . . . . . . . . . . . . . 6
Calculation of Performance Data. . . . . . . . . . 7
Dividends and Federal Income Tax Status. . . . . . 7
Other Information. . . . . . . . . . . . . . . . . 7
Custodian. . . . . . . . . . . . . . . . . . . 7
Transfer Agent . . . . . . . . . . . . . . . . 7
Independent Auditors . . . . . . . . . . . . . 7
Legal Counsel. . . . . . . . . . . . . . . . . 8
Financial Statements . . . . . . . . . . . . . . . 9
--------------------

The date of this Statement of Additional Information and the Prospectus is
October 29, 1996.

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund is capital growth. This objective will
not be changed unless authorized by a vote of a majority of the outstanding
shares of the Fund, but the policies and techniques described in the next two
paragraphs for seeking to attain such objective may be changed without
shareholder approval.

The Fund normally invests in common stocks that offer the prospect of
earnings growth or asset enhancement over a one to three year period. However,
the Fund may sell securities within a relatively short period if developments
with the investment, the equity markets or the economy indicate that a change
would be advisable. Short-term debt investments are utilized to reduce portfolio
exposure to equity markets and to obtain a return on funds not committed to
common stocks.

Although common stocks are emphasized in its portfolio, the Fund also
invests in securities convertible into, and warrants and rights to subscribe
for, common stock. The amount invested in warrants, valued at the lower of cost
or market, will not exceed 5% of the Fund's net assets, and the amount invested
in warrants which are not listed on the New York or American Stock Exchanges
will not exceed 2% of the net assets. The Fund also invests in securities of
issuers engaged in securities related businesses, but during the fiscal year
ended June 30, 1996 none of those issuers was among the firms which executed
portfolio transactions for the Fund as either broker or dealer or which sold
Fund shares.

The Fund operates under certain restrictions on investment policy that are
fundamental policies and cannot be changed without approval by the holders of a
majority of the outstanding shares of the Fund. Under these restrictions, the
Fund cannot: (a) borrow money except for temporary purposes and then only in an
amount not exceeding 5% of the value of the total assets of the Fund at the time
when the loan is made; (b) issue senior securities; (c) invest in any real
estate, but this limitation does not preclude an investment in the marketable
securities of an issuer the business of which involves the purchase or sale of
real estate or interests therein; (d) engage in the purchase or sale of any
commodity or commodities futures contract; (e) make loans of its assets to other
persons except through the purchase of a portion of an issue of publicly
distributed bonds, debentures or other debt securities; (f) purchase any
securities on margin except such short-term credits that are necessary for the
clearance of transactions, nor participate on a joint or joint and several basis
in any trading account in securities; (g) make short sales of securities; (h)
acquire more than 10% of any class of securities of any issuer; (i) invest in
securities for the purpose of exercising control of management; (j) invest in
securities of any other investment company; (k) underwrite the securities of
other issuers or knowingly purchase securities of other issuers which are
subject to contractual restrictions on resale or under circumstances where if
the securities are later publicly offered or sold by the Fund, the Fund might be
deemed to be an underwriter for the purpose of the Securities Act of 1933; (l)
invest more than 15% of the value of its total assets in securities with a
limited trading market; (m) invest more than 25% of its assets in any one
industry; (n) write, purchase or sell puts, calls or combinations thereof; or
(o) with respect to 75% of its total assets, invest more than 5% of the value of
its total assets at the time of purchase in the securities of any one issuer.

The Fund has no specific limitations on its portfolio turnover
rate, which has tended to fluctuate from year to year in response
to stock market conditions. See "Condensed Financial Information"
in the Prospectus.

DIRECTORS AND OFFICERS

The directors and executive officers of the Fund, together with their
principal business occupations during the last five years as well as their
positions with the Adviser, are shown below. Each director who is deemed an
"interested person" of the Fund, as defined in the Investment Company Act of
1940, is indicated by an asterisk.

EUGENE P. FRENKEL, M.D. - Director of the Fund, age 59, - is a Professor of
Internal Medicine and Radiology, Southwestern Medical School, in Dallas, Texas,
with which he has been associated since 1962. Dr. Frenkel's address is
Department of Internal Medicine, University of Texas Health Science Center at
Dallas, 5323 Harry Hines, Dallas, Texas.

C. K. LAWSON* - President, Treasurer and Director of the Fund, age 60, - is
President, Treasurer and a director of the Adviser and its parent, Lawson
Investments, Inc. See "Investment Adviser." Decisions to buy and sell securities
for the Fund's portfolio are made by Mr. Lawson as an officer of the Adviser,
and he also selects brokers to handle the transactions and negotiates the
brokerage commissions. Mr. Lawson is a chartered financial analyst. His address
is 750 North St. Paul, LB 13, Suite 1300, Dallas, Texas.

DOUGLAS W. MACLAY - Director of the Fund, age 68, - has been President of
Maclay Properties Company, real estate investments, of Dallas, Texas and its
predecessors, since 1974. Mr. Maclay's address is 3500 Oak Lawn, Dallas, Texas.

R. H. STEWART MITCHELL, JR. - Director of the Fund, age 66, - is retired;
he formerly was Vice-Chairman of the Board of Directors of Tracy-Locke/BBDO,
advertising and public relations, of Dallas, Texas, with which he was associated
from 1959 to 1983. Mr. Mitchell's address is 7371 Paldao Drive, Dallas, Texas.

CRUGER S. RAGLAND - Director of the Fund, age 63, - is President of Ragland
Insurance Agency, Inc. of Dallas, Texas, with which he has been associated since
1959. Mr. Ragland's address is 500 Two Turtle Creek Village, Dallas, Texas.

ANN REED DITTMAR - Director of the Fund, age 63, - is a private investor
whose address is 3608 Lexington, Dallas, Texas.

CANDACE L. KING - Vice President and Secretary of the Fund, age 48, - is
Vice President and Secretary of the Adviser, with which she has been associated
since 1973. Ms. King's address is 750 North St. Paul, LB 13, Suite 1300, Dallas,
Texas.

Directors are elected by the shareholders to serve until the next meeting
of shareholders and until their respective successors are elected. The Fund does
not have annual meetings of shareholders.

All officers of the Fund are employees of the Adviser, and they receive no
salary from the Fund. The directors of the Fund who are not affiliated with the
Adviser (5 persons) received fees for retainers and for Board of Directors
meetings attended which aggregated $6,000 during fiscal 1996. No pension or
retirement benefits are accrued as part of fund expenses.

On August 1, 1996 the officers and directors named above, as a group,
beneficially owned approximately 17.1% of the outstanding shares of the Fund,
including approximately 7.4% beneficially owned by Mr. Mitchell. To the
knowledge of the Fund, no other person beneficially owned 5% or more of its
outstanding shares.

INVESTMENT ADVISER

Since its organization in 1971, Portfolios, Inc. has been the investment
adviser of the Fund. Pursuant to an investment advisory agreement dated October
30, 1981 (the "Advisory Agreement"), the Adviser manages the Fund's investments.
The Advisory Agreement provides that, as compensation for its services, the
Adviser will be paid monthly a fee at the annual rate of 0.8% of the Fund's
average daily net assets for each fiscal year. The Adviser furnishes to the
Fund, at the Adviser's expense, office space, local telephone service and
utilities, and is responsible for the compensation of directors, officers and
employees of the Fund who are interested persons of the Adviser. Expenses of the
Fund not paid by the Adviser are borne by the Fund and include, but are not
limited to, fees and expenses of the Fund's legal counsel, of its independent
auditors and of its custodian and transfer agent, printing costs incurred by the
Fund and compensation of directors who are not interested persons of the
Adviser. The Adviser also performs for the Fund certain accounting services
pursuant to an administrative services agreement dated October 25, 1985, for
which the Fund compensates the Adviser at the rate of $16,000 per annum.

The Advisory Agreement provides that the Adviser shall reimburse the Fund
for all expenses (including the advisory and administrative fees but excluding
interest, taxes, brokerage commissions and extraordinary charges such as
litigation costs) incurred by the Fund with respect to any fiscal year in excess
of the following percentages of its average daily net assets for the fiscal
year: 2% of the first $10 million of average daily net assets; 1.5% of the next
$20 million of average daily net assets; and 1% of the remaining average daily
net assets. For the fiscal years ended June 30, 1994, 1995 and 1996, the Fund
paid investment advisory fees of $79,899, $83,927 and $100,839, respectively.

Effective January 1, 1995, the Adviser became the Fund's transfer agent,
registrar, redemption agent and dividend disbursing agent. As the Transfer Agent
the Adviser receives $700 per month, plus reimbursement for certain out of
pocket expenses, including without limitation costs of forms, statements,
envelopes, postage, shipping, telephone, insurance, legal fees and statement
microfiche copies. The Adviser is a subagent with respect to certain
recordkeeping and administrative services for certain individual retirement
accounts, pursuant to an arrangement with The Union Bank of California, N. A.
(the Bank ), pursuant to which the Bank acts as custodian for the individual
retirement accounts and the Adviser pays the Bank $7.50 per account, per year,
which charge is passed through to the account holder without markup. The Adviser
receives no other compensation from the Fund or its shareholders with respect to
this arrangement.

The Adviser is engaged in the business of providing investment advisory and
management services to individual and institutional investors. Lawson
Investments, Inc., a corporation controlled by C. K. Lawson, owns all of the
outstanding stock of the Adviser. See "Directors and Officers."

BROKERAGE ALLOCATION

In the allocation of brokerage, it is the Fund's policy to seek the best
price and execution. The Fund, however, does not consider that this objective is
served by seeking the lowest commission rates available. It gives preference,
and may pay higher commission rates, to brokers that, in addition to having the
capability of obtaining the best price for the security itself and of executing
the order with speed, efficiency and confidentiality, also provide research and
statistical and similar information and services ("Research") to the Adviser.
Subject to the Fund's policy to normally effect its principal transactions with
principal market makers, the Fund may effect principal transactions with dealers
that provide Research to the Fund. Research furnished by brokers through whom
the Fund effects securities transactions includes written reports analyzing
economic and financial characteristics of industries and companies and telephone
communications with securities analysts and others, and is used by the Adviser
in servicing all of its accounts, although not all of the Research is used by
the Adviser in connection with the Fund. There is no reduction in the fees paid
to the Adviser as a consequence of its receipt of such Research.

The Adviser selects the brokers through whom the Fund's securities
transactions are executed and negotiates the commission rates for all brokerage
transactions on national securities exchanges. The amount of the brokerage
commission is typically negotiated after the completion of the transaction. The
Adviser, however, must determine in good faith that the amount of the commission
is reasonable in relation to the value of the brokerage services and Research
provided by the broker, viewed in terms of either the particular transaction or
the Adviser's overall responsibilities with respect to the accounts as to which
it exercises investment discretion. In fiscal 1996 all of the Fund's brokerage
commissions were paid to brokers that supplied Research to the Adviser. However,
neither the Fund nor the Adviser has any agreement or understanding, or any
internal allocation arrangement, to direct any of the Fund's brokerage
transactions to any particular broker because of Research provided.

Subject to the policy of seeking best price and execution, brokerage
commissions for the execution of portfolio transactions may be paid to brokers
that have affiliated persons in common with the Adviser, but no brokerage
commissions were paid to such persons during the three years ended June 30,
1996. Sales of Fund shares may be a factor considered in the selection of
brokers to execute portfolio transactions.

For the fiscal years ended June 30, 1994, 1995 and 1996 the Fund paid
aggregate brokerage commissions of $12,571, $9,650 and $14,282, respectively.
Year to year fluctuations in the aggregate levels of brokerage commissions are
attributable primarily to fluctuations in the volume of portfolio brokerage
transactions as a result of changing market conditions.

PRICING OF SHARES

The public offering price of the Fund's shares is equal to the Fund's net
asset value per share. The entire offering price from the sale of the Fund's
shares accrues to the Fund.

The net asset value of the Fund's shares is determined following the close
of trading of the New York Stock Exchange on each day on which the Exchange is
open for business. The Fund determines its net asset value per share by
subtracting the Fund's liabilities (including accrued expenses and dividends
payable) from its total assets (the market value of the securities the Fund
holds plus cash or other assets, including interest accrued but not yet received
and dividends "ex" but not paid) and dividing the result by the total number of
shares outstanding. A security quoted on the New York Stock Exchange Composite
Tape or on the NASDAQ National Market shall be valued at its last sale price as
reported thereon prior to the time as of which assets are valued. A security not
quoted on the New York Stock Exchange Composite Tape or the NASDAQ National
Market shall be valued (i), in the case of an exchange listed security, at the
last reported sale price on that exchange where it is quoted prior to the time
as of which assets are valued and (ii), in the case of securities not traded on
an exchange for which over-the-counter market quotations are readily available,
on the basis of the last current bid price prior to the time as of which assets
are valued. When market quotations are not readily available or when restricted
securities are being valued, the security shall be valued at the fair value
determined in good faith by the Board of Directors of the Fund. In the event
that the Fund should have other assets, they would be valued at fair value as
determined in good faith by the Board of Directors.

REDEMPTION OF SHARES

The Fund will redeem shares from stockholders of record at the per share
net asset value next determined after receipt of a written request that the
shares be redeemed, together with proper documentation, as discussed under
"Redemption of Fund Shares" in the Prospectus.

As stated under "Redemption of Fund Shares - Signature Guarantees" in the
Prospectus, the signature of the appropriate persons signing or endorsing any
redemption request or stock certificate must be duly guaranteed by an eligible
guarantor institution. "Eligible guarantor institutions," as defined in Rule
17Ad-15 under the Securities Exchange Act of 1934, include banks, brokers,
dealers, credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations. A broker-dealer
guaranteeing signatures must be a member of a clearing corporation or maintain
net capital of at least $100,000. Credit unions must be authorized to issue
signature guarantees. Signature guarantees will be accepted from any eligible
guarantor institution which participates in a signature guarantee program.

Payment for shares redeemed will be made by the Fund within seven days of
receipt of the written redemption request along with the proper documentation.
Redemption of shares or payment may be suspended at times (a) when the New York
Stock Exchange is closed, (b) when trading on the Exchange is restricted, (c)
when an emergency exists as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or it is not reasonably practicable
for the Fund fairly to determine the value of its net assets, or (d) during any
other period when the Securities and Exchange Commission, by order, so permits.

Payment for shares redeemed may be made either in cash or in portfolio
securities, or partly in cash and partly in portfolio securities. However,
payments will be made wholly in cash unless the Board of Directors believes that
market conditions exist which would make such a practice detrimental to the best
interests of the Fund. If payments for shares redeemed are made wholly or partly
in portfolio securities, the securities will be valued at the value used in
calculating the value of the shares to be redeemed and brokerage costs may be
incurred by the investor in converting the securities to cash.

CALCULATION OF PERFORMANCE DATA

From time to time the Fund may advertise its "total return" or average
annual total return over specified periods. Such return is based upon historical
performance information and is not intended to indicate future performance. For
these purposes, the Fund's "total return" is based on the increase (or decrease)
in a hypothetical $1,000 invested in the Fund at the beginning of each of the
specified periods, assuming the reinvestment of any dividends and distributions
paid by the Fund during such periods. The Fund does not impose any sales charge
or redemption fee on the purchase or redemption of its shares.

DIVIDENDS AND FEDERAL INCOME TAX STATUS

The Fund has met the requirements for qualification as a regulated
investment company under Subchapter M of the Internal Revenue Code since it
commenced doing business as an investment company and intends to maintain such
qualification. As a regulated investment company, the Fund is not taxed on its
ordinary income or net capital gains to the extent distributed to shareholders.

OTHER INFORMATION

CUSTODIAN. The Union Bank of California, N.A., 475 Sansome Street, 15th
Floor, San Francisco, California 94111 is the custodian of the Fund's portfolio
securities and custodian for the Fund's tax-sheltered retirement plans.

TRANSFER AGENT. Portfolios, Inc., 750 N. St. Paul, LB 13, Suite 1300,
Dallas, Texas 75201 is the Fund's transfer agent and dividend disbursing agent.

INDEPENDENT AUDITORS. Grant Thornton LLP, 3600 First Interstate Bank Tower,
Dallas, Texas 75202, are independent auditors for the Fund. The statements of
assets and liabilities and portfolio of investments in securities as of June 30,
1996 of the Fund, and the related statement of operations for the year then
ended, the related statements of changes in net assets for each of the two years
in the period then ended, and selected per share data and ratios for each of the
five years in the period then ended, included in this Statement of Additional
Information have been so included in reliance on the report of Grant Thornton,
LLP and upon the authority of said firm as experts in auditing and accounting.

LEGAL COUNSEL. Jackson & Walker, L.L.P., 901 Main Street, Suite 6000,
Dallas, Texas 75202-3797, are legal counsel to the Fund.

FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(WITH SUPPLEMENTAL INFORMATION)

ARMSTRONG ASSOCIATES, INC.

JUNE 30, 1996

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Shareholders and Board of Directors
Armstrong Associates, Inc.

We have audited the accompanying statement of assets and liabilities of
Armstrong Associates, Inc., including the schedule of portfolio of investments
in securities, as of June 30, 1996, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended and the selected per share data and ratios for
each of the five years in the period then ended. These financial statements and
per share data and ratios are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
per share data and ratios based on our audits. The selected per share data and
ratios for each of the seventeen years in the period ended June 30, 1991 were
audited by other independent certified public accountants whose report thereon
dated July 19, 1991, expressed an unqualified opinion.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per share data
and ratios are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and selected per share data and ratios
referred to above present fairly, in all material respects, the financial
position of Armstrong Associates, Inc. as of June 30, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the selected per share data and
ratios for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.

GRANT THORNTON LLP

Dallas, Texas
July 17, 1996

<TABLE>
<CAPTION>
ARMSTRONG ASSOCIATES, INC.

STATEMENT OF ASSETS AND LIABILITIES

June 30, 1996
<S> <C>
ASSETS
Investments in securities, at market value
(identified cost, $8,145,917) $13,002,392
Cash 110,713
Dividends receivable 10,560
Interest receivable 11,895
Prepaid expenses and other assets 2,902
-----------
13,138,462

LIABILITIES
Accrued expenses and other liabilities 11,359
Payable for fund shares redeemed 27,303
-----------
38,662
-----------

NET ASSETS $13,099,800
===========

NET ASSETS CONSIST OF
Paid in capital $ 7,588,608
Undistributed net investment income 24,093
Accumulated undistributed net realized gains on investments 630,624
Net unrealized appreciation on investments 4,856,475
-----------

NET ASSETS APPLICABLE TO 1,253,051 SHARES OUTSTANDING $13,099,800
===========

NET ASSET VALUE PER SHARE $ 10.45
===========

</TABLE>

The accompanying notes are an integral part of this statement.

<TABLE>
<CAPTION>
ARMSTRONG ASSOCIATES, INC.

PORTFOLIO OF INVESTMENTS IN SECURITIES

June 30, 1996

Shares or
principal Market
amount Cost value (a)
------ ---- ---------
<S> <C> <C> <C>
COMMON STOCK (82.28%)
Industry and issue
Broadcasting, Media and Publishing (4.7%)
A.H. Belo Corp. 6,000 $ 171,285 $ 223,500
Time Warner, Inc. 10,000 208,193 392,500
-------- --------
379,478 616,000
-------- --------

Chemicals and Related (6.2%)
Avery Dennison Corp. 10,000 281,600 548,750
Praxair Inc. 6,000 212,890 253,500
-------- --------
494,490 802,250
-------- --------

Computer Software and Related (4.7%)
Cisco Systems, Inc.* 3,000 126,000 169,875
Oracle Systems Corp.* 11,250 158,750 444,375
-------- --------
284,750 614,250
-------- --------

Consumer Products and Services (7.6%)
Black & Decker Corp. 10,000 216,760 386,250
Duracell International, Inc. 4,000 166,636 172,500
Kimberly Clark Corp. 3,000 230,820 231,750
Wal-Mart Stores, Inc. 8,000 196,800 203,000
-------- --------
811,016 993,500
-------- --------

Electronics, Semiconductors and Related (6.4%)
AMP, Inc. 5,000 196,230 200,625
Motorola, Inc. 10,000 140,550 627,500
-------- --------
336,780 828,125
-------- --------

Food, Beverages and Related (10.2%)
CPC International, Inc. 5,000 214,288 360,000
Dole Foods, Inc. 6,000 209,775 258,000
PepsiCo, Inc. 20,000 126,400 710,000
-------- --------
550,463 1,328,000
-------- --------

Industrial Conglomerate (5.1%)
Corning, Inc. 12,000 236,400 460,500
ITT Industries, Inc. 8,000 71,537 201,000
-------- --------
307,937 661,500
-------- --------

Insurance and Finance (3.3%)
ITT Hartford Group, Inc. 8,000 160,654 426,000
-------- --------

Lodging and Leisure (4.1%)
ITT Corporation 8,000 165,150 530,000
-------- --------

</TABLE>

The accompanying notes are an integral part of this statement.

ARMSTRONG ASSOCIATES, INC.

PORTFOLIO OF INVESTMENTS IN SECURITIES - CONTINUED

June 30, 1996

Shares or
principal Market
amount Cost value (a)
------ ---- ---------
<S> <C> <C> <C>
Medical and Related (11.3%)
Abbott Laboratories 15,000 $ 182,380 $ 652,500
Boston Scientific Corp.* 5,000 234,785 225,000
Medtronics, Inc. 5,000 190,438 280,000
R. P. Scherer Corporation* 7,000 196,955 317,625
-------- --------
804,558 1,475,125
-------- --------

Metals and Mining (1.4%)
Alumax, Inc.* 6,000 211,295 182,250
-------- --------

Natural Gas and Related (2.0%)
Tenneco, Inc. 5,000 224,450 255,625
-------- --------

Photography and Equipment (3.6%)
Eastman Kodak Company 6,000 183,894 466,500
-------- --------

Telecommunications (7.7%)
AT&T Corp. 13,000 434,975 806,000
Paging Network, Inc.* 8,000 188,000 192,000
-------- --------
622,975 998,000
-------- --------

Transportation (1.7%)
Ryder System, Inc. 8,000 196,960 225,000
-------- --------

Water Treatment and Pollution Control (3.0%)
Ionics, Inc.* 8,000 186,800 376,000
-------- --------

Total common stocks 5,921,650 10,778,125

SHORT-TERM DEBT (16.98%)
U.S. Treasury bills, due July 1996 535,000 528,595 528,595

U.S. Treasury bills, due August 1996 1,040,000 1,029,824 1,029,824

U.S. Treasury bills, due September 1996 675,000 665,848 665,848
-------- --------

Total short term debt 2,224,267 2,224,267
--------- ----------

Total investment securities - 99.26% $8,145,917 13,002,392
=========

Other assets less liabilities - .74% 97,408
-------

Net assets - 100.00% $13,099,800
==========

</TABLE>

The accompanying notes are an integral part of this statement.

NOTES

(a) All common stocks are listed on a national securities exchange (or
reported on the NASDAQ national market) and are valued at the
closing price. Short-term debt is carried at cost, which
approximates market value.

(b) Aggregate cost for Federal income tax purposes is $8,145,917.

* Nonincome-producing security

<TABLE>
<CAPTION>
ARMSTRONG ASSOCIATES, INC.

STATEMENT OF OPERATIONS

Year ended June 30, 1996

<S> <C> <C>
INVESTMENT INCOME
Dividends $ 137,211
Interest 109,826
--------
247,037

Operating expenses
Investment advisory fees $100,839
Administrative fees 16,000
Custodian fees 7,098
Transfer agent fees 11,880
Legal fees 9,927
Accounting fees 14,759
Registration fees, licenses and other 2,274
Reports and notices to shareholders 11,268
Directors' fees and expenses 6,465
Insurance expense 1,623 182,133
------- --------

NET INVESTMENT INCOME 64,904
---------

REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Realized gains (excluding short-term debt obligations)
Proceeds from sales 3,179,691
Cost of securities sold 2,205,120
---------

NET REALIZED GAINS 974,571
---------

Unrealized appreciation
Beginning of year 4,464,301
End of year 4,856,475
---------

INCREASE IN UNREALIZED APPRECIATION 392,174
---------

NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 1,366,745
---------

NET INCREASE IN NET ASSETS FROM OPERATIONS $1,431,649
=========

</TABLE>

The accompanying notes are an integral part of these statements.

<TABLE>
<CAPTION>
ARMSTRONG ASSOCIATES, INC.

STATEMENTS OF CHANGES IN NET ASSETS

Year ended June 30,

1996 1995
------ -----
<S> <C> <C>
OPERATIONS
Net investment income $ 64,904 $ 24,396
Net realized gains on investments 974,571 296,884
Increase in unrealized appreciation of investments 392,174 2,217,390
-------- ----------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,431,649 2,538,670

DISTRIBUTIONS TO SHAREHOLDERS
Dividends paid from net investment income (24,647) (45,228)
Distributions from net realized gains (468,286) (667,116)
--------- ---------

NET DECREASE IN NET ASSETS RESULTING FROM DISTRIBUTIONS (492,933) (712,344)

CAPITAL SHARE TRANSACTIONS
Net proceeds from sale of capital stock 375,861 692,961
Net asset value of shares issued to shareholders
in reinvestment of net investment income and
net realized gains on investments 466,053 667,187
-------- --------
841,914 1,360,148
Less cost of shares repurchased 641,510 480,744
-------- --------

NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS 200,404 879,404
-------- --------

TOTAL INCREASE IN NET ASSETS 1,139,120 2,705,730

NET ASSETS
Beginning of year 11,960,680 9,254,950
---------- ----------

End of year (Note) $13,099,800 $11,960,680
=========== ===========

</TABLE>

Note: At June 30, 1996 and 1995, undistributed net realized investment gains
were $630,624 and $124,339, respectively, and at June 30, 1996,
undistributed net investment income was $24,093. At June 30, 1995,
distributions in excess of net investment income were $16,164.

The accompanying notes are an integral part of these statements.

ARMSTRONG ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 1996

NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:

Nature of Operations

Armstrong Associates, Inc. (the Company) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end investment
management company

Valuation of Securities

The Company's investments in common stocks are carried at market value.
Short-term debt securities are carried at cost which approximates market.

Investment Transactions and Investment Income

Investment transactions are recorded on a trade date basis, and realized
gains and losses are calculated using the identified cost method. Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Interest income is recorded on the accrual basis.

Financial Instruments

The Company's financial instruments consist of cash and investments in
securities. Carrying value approximates fair market value.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE B - FEDERAL INCOME TAXES

As of June 30, 1996, the Company qualified and intends to continue to
qualify each fiscal year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended. By qualifying, the
Company will not be subject to Federal income taxes to the extent that it
distributes all of its taxable income for its fiscal year.

NOTE C - PURCHASES AND SALES OF SECURITIES

For the year ended June 30, 1996, purchases and sales of securities,
excluding short-term debt securities, aggregated $1,978,209 and $2,205,120,
respectively.

The Company paid total brokerage commissions on the purchases and sales of
investment securities aggregating $14,282 in 1996. All commissions were paid
to unaffiliated broker-dealers.

NOTE D - INVESTMENT ADVISORY, TRANSFER AGENT AND ADMINISTRATIVE FEES

The Company has agreed to pay its investment adviser, Portfolios, Inc.
(Portfolios), a fee of .80% per annum of the average net asset value of the
Company. For the year ended June 30, 1996, investment advisory fees from
Portfolios amounted to $100,839. In order to effectively limit the expenses
of the Company, the adviser has agreed to reimburse the Company for all
expenses (including the advisory fee but excluding brokerage commissions,
taxes and interest and extraordinary charges such as litigation costs)
incurred by the Company in any fiscal year in excess of 2% of the first $10
million of its average daily net assets for the fiscal year, 1.5% of the
next $20 million of average daily net assets and 1% of the remainder. No
reimbursements were required in 1996.

Effective January 1, 1995, Portfolios became the transfer agent for the
Company. Applicable fees of $11,879 were incurred by the Company for the
year ended June 30, 1996. In addition, under the terms of an administrative
services agreement between Portfolios and the Company, Portfolios provides
accounting services to the Company for an annual fee of $16,000 payable in
equal monthly installments.

At June 30, 1996, the Company owed Portfolios $10,712 in accrued fees.

NOTE E - CAPITAL STOCK

On June 30, 1996, there were 6,000,000 shares of $1 par value capital stock
authorized, and capital paid in was $7,588,609. Transactions in capital
stock for the years ended June 30, 1996 and 1995 were as follows:

1996 1995
------ -----

Shares sold 37,634 78,586
Additional shares purchased from
reinvested dividends 47,124 79,427
------- -------
84,758 158,013
Shares redeemed (64,337) (55,689)
------- -------

Net increase in shares outstanding 20,421 102,324
======= =======

NOTE F - DIVIDENDS

Dividends from net investment income paid during the year ended June 30,
1996 and 1995 amounted to $.02 and $.04 per share, respectively.
Distributions from net realized gains paid during the years ended June 30,
1996 and 1995 amounted to $.38 and $.59 per share, respectively.

<TABLE>
<CAPTION>
ARMSTRONG ASSOCIATES, INC.

CONDENSED FINANCIAL INFORMATION

Selected per Share Data and Ratios
1975 1976 1977 1978 1979 1980 1981
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value
Beginning of period $2.74 $3.81 $5.30 $5.68 $6.50 $7.06 $7.74

Income (loss) from investment operations
Net investment income .07 .03 .04 .08 .16 .23 .24
Net realized and unrealized gains (losses)
on investments 1.04 1.53 .38 .78 .84 1.40 2.62
---- ---- ---- ---- ---- ---- ----

Total from investment operations 1.11 1.56 .42 .86 1.00 1.63 2.86

Less distributions
Dividends from net investment income .04 .07 .04 .04 .11 .13 .23
Distributions from net realized gains - - - - .33 .82 1.00
--- --- --- --- ---- ---- ----

Net asset value, end of period $3.81 $5.30 $5.68 $6.50 $7.06 $7.74 $9.37
==== ==== ==== ==== ==== ==== ====

Total return 41.46% 42.06% 8.05% 15.31% 15.17% 24.08% 38.04%

Ratios/supplemental data
Net assets, end of period (000's) 2,892 3,785 3,649 3,886 4,538 5,777 8,277

Ratio of expenses to average net assets 1.5 1.5 1.5 1.5 1.5 1.6 1.5

Ratio of net investment income
to average net assets 2.7 .8 1.9 1.6 2.3 3.2 2.7

Portfolio turnover rate 210% 113% 113% 151% 97% 131% 60%

</TABLE>

<TABLE>
<CAPTION>
1982 1983 1984 1985 1986 1987 1988 1989
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value
Beginning of period $ 9.37 $ 7.10 $10.22 $7.29 $7.65 $8.72 $ 9.66 $7.17

Income (loss) from investment operations
Net investment income .41 .21 .16 .24 .14 .10 .09 .24
Net realized and unrealized gains (losses)
on investments (1.28) 3.72 (2.51) 1.02 1.17 1.51 (.53) .67
----- ---- ----- ---- ---- ---- ---- ----

Total from investment operations (.87) 3.93 (2.35) 1.26 1.31 1.61 (.44) .91

Less distributions
Dividends from net investment income .19 .43 .20 .14 .24 .16 .14 .11
Distributions from net realized gains 1.21 .38 .38 .76 - .51 1.91 .23
----- ----- ----- ---- ----- ---- ----- ----

Net asset value, end of period $ 7.10 $10.22 $ 7.29 $7.65 $8.72 $9.66 $7.17 $7.74
===== ===== ===== ==== ==== ==== ===== ====

Total return (9.87)% 61.27% (24.01)% 19.10% 17.80% 20.00% (6.27)% 13.23%

Ratios/supplemental data
Net assets, end of period (000's) 7,669 12,869 9,788 10,957 11,714 12,294 10,435 9,887

Ratio of expenses to average net assets 1.7 1.6 1.6 1.7 1.6 1.7 2.0 1.9

Ratio of net investment income
to average net assets 5.6 2.4 1.9 3.1 1.6 1.0 1.3 3.0

Portfolio turnover rate 34% 59% 96% 53% 54% 51% 20% 46%

</TABLE>

<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value
Beginning of period $7.74 $7.38 $6.87 $7.08 $8.26 $8.19 $9.70

Income (loss) from investment operations
Net investment income .23 .16 .06 .02 - .02 .05
Net realized and unrealized gains (losses)
on investments .19 (.27) .33 1.19 .10 2.12 1.10
---- ---- ---- ---- ---- ---- ----

Total from investment operations .42 (.11) .39 1.21 .10 2.14 1.15

Less distributions
Dividends from net investment income .24 .23 .15 .02 - .04 .02
Distributions from net realized gains .54 .17 .03 .01 .17 .59 .38
---- ---- ---- ---- ---- --- ---

Net asset value, end of period $7.38 $6.87 $7.08 $8.26 $8.19 $9.70 $10.45
==== ==== ==== ==== ==== ==== =====

Total return 5.93% (.92)% 5.79% 17.12% 1.13% 27.32% 12.09%

Ratios/supplemental data
Net assets, end of period (000's) 9,770 9,228 9,366 9,680 9,255 11,961 13,100

Ratio of expenses to average net assets 1.8 1.9 1.9 1.8 1.8 1.8 1.4

Ratio of net investment income
to average net assets 2.9 2.3 .8 .2 - .2 .5

Portfolio turnover rate 44% 24% 35% 17% 15% 12% 19%

</TABLE>

(a) For a share outstanding throughout the year. Per share data has been
rounded to nearest cent and adjusted to give effect to a 2-for-1 stock
split, effective October 16, 1978, by means of a stock distribution.
(b) The Fund had no senior securities or outstanding debt during the
twenty-two-year period ended June 30, 1996.

See accompanying report of independent certified public accountants.

PART C: OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

(i) Included in Part A:

None

(ii) Included in Part B:

Report of Independent Certified Public Accountants

Statement of Assets and Liabilities - June 30, 1996

Portfolio of Investments in Securities - June 30, 1996

Statement of Operations - Year ended June 30, 1996

Statements of Changes in Net Assets - Years ended
June 30, 1995 and 1996

Notes to Financial Statements

(b) Exhibits:

1.1 Restated Articles of Incorporation of the Fund filed October
28, 1983 [Exhibit 1.1, Form N-1A Post-Effective Amendment
No. 27]

2.1 Bylaws of the Fund as amended through August 27, 1987
[Exhibit 2.1, Form N-1A Post-Effective Amendment No. 31]

2.2 Amendment to Bylaws of the Fund, effective August 25, 1993
[Exhibit 2.2, Form N-1A Post- Effective Amendment No. 37]

4.1 Specimen stock certificate [Exhibit 4.1, Form N-1A
Post-Effective Amendment No. 30]

* 4.2 Purchase Application

5.1 Investment Advisory Agreement dated October 30, 1981 between
the Fund and the Adviser [Exhibit 5.1, Form N-1A
Post-Effective Amendment No. 28]

8.1 Custodian Agreement dated March 4, 1988 between the Fund and
The First Jersey National Bank [Exhibit 8.1, Form N-1A
Post-Effective Amendment No. 32]

8.1.1 Letter dated August 31, 1988 from Fund/Plan Services,
Inc. to the Fund re. change of name of First Jersey
National Bank to National Westminster Bank, NJ [Exhibit
8.1.1, Form N-1A Post-Effective Amendment No. 33]

8.2 Administration Agreement dated June 27, 1983 between the
Fund and First Pennsylvania Bank, N.A. [Exhibit 8.2, Form
N-1 Post-Effective Amendment No. 25]

8.3 Amendment dated February 25, 1986 to the Administration
Agreement filed as Exhibit 8.2 [Exhibit 8.3, Form N-1A
Post-Effective Amendment No. 30]

8.4 Custody Agreement dated September 9, 1994 between the Fund
and The Bank of California, N.A. [Exhibit 8.4, Form N-1A,
Post-Effective Amendment No. 39]

8.5 Amended and Restated Transfer Agent Agreement dated May 17,
1995 [Exhibit 8.5, Form N-1A Post Effective Amendment No.
40]

9.1 Administrative Services Agreement dated October 24, 1985
between the Fund and the Adviser [Exhibit 9.1, Form N-1A
Post-Effective Amendment No. 30]

* 10.1 Opinion of Jackson & Walker, L.L.P. as to legality of
securities being registered and related consent

* 11.1 Consent of Grant Thornton LLP

14.1 Individual Retirement Account documents [Exhibit No. 14.1,
Form N-1 Post-Effective Amendment No. 25]

14.2 Prototype Profit Sharing Plan, Custody Agreement, and
Standardized and Non-Standardized Adoption Agreement
documents [Exhibit 14.4, Form N-1A Post-Effective Amendment
No. 35]

15 Power of Attorney [Signature Page, sequentially numbered
page 0042, Form N-1A Post Effective Amendment No. 38]

*Exhibit is being filed herewith. All other exhibits have been previously
filed with the Commission as an exhibit to the Post-Effective Amendment to the
Fund's Registration Statement on Form N-1 or N-1A (No. 2-27539) designated in
brackets and are incorporated herein by this reference.

Item 25. Persons Controlled by or Under Common Control with Registrant

None

Item 26. Number of Holders of Securities

As of August 22, 1996, there were 1,018 record holders of shares of
the Fund's outstanding common stock.

Item 27. Indemnification

Article 2.02-1 of the Texas Business Corporation Act and Article XI of
the Bylaws of the Fund provide for the indemnification of directors and
officers of the Fund against certain liabilities.

Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Fund pursuant to the foregoing provisions, or otherwise, the Fund
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Fund of expenses incurred or paid by a director, officer or controlling
person of the Fund in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Fund will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.

Item 28. Business and Other Connections of Investment Adviser

In addition to serving as investment adviser to the Fund, the Adviser
serves as investment adviser to a number of other persons, none of whom is
believed to be an investment company.

Positions and Offices Positions and Offices
Name with the Adviser with the Fund
---- ---------------- -------------

C. K. Lawson(a) President, Treasurer President, Treasurer
and Director and Director

Candace L. King(b) Secretary Vice President
and Secretary

John P. Chilton(c) Director None

(a) Mr. Lawson is President, Treasurer and a director of Lawson
Investments, Inc. ("LII"), a corporation which owns all of the outstanding
stock of the Adviser and the principal business address of which is 750
North St. Paul, LB 13, Suite 1300, Dallas, Texas 75201.

(b) Ms. King is Vice President and Secretary of LII.

(c) Mr. Chilton is a Vice President and registered representative of
Weber Investments Corporation, a broker-dealer registered under the
Securities Exchange Act of 1934 which has its principal place of business
at 1600 Pacific Building, 1525 Elm Street, Dallas, Texas 75201. Mr. Chilton
is also a director of LII.

Item 29. Principal Underwriters

Not Applicable.

Item 30. Location of Accounts and Records

Physical possession of all accounts, books and other documents
required to be maintained by the Fund and the Adviser pursuant to 31 of the
Investment Company Act of 1940 and the rules promulgated thereunder are
maintained by the Fund and the Adviser at 750 North St. Paul, LB 13, Suite
1300, Dallas, Texas, except that certain records are maintained at the
offices of the Fund's custodian, The Union Bank of California, N.A., 475
Sansome Street, 15th Floor, San Francisco, California 94111.

Item 31. Management Services

Not applicable.

Item 32. Undertakings

Not applicable.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, and the State of Texas, on August 30, 1996.

ARMSTRONG ASSOCIATES, INC.

By: /s/ C. K. Lawson
----------------------------------
C. K. Lawson, President

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints C. K. Lawson and Candace L. King, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated below on August 30, 1996.

Signature Title
--------- -----

/s/ C.K. Lawson President, Treasurer and Director
C.K. Lawson (Principal Executive Officer
and Principal Financial and
Accounting Officer)

/s/ Eugene P. Frenkel Director
Eugene P. Frenkel

/s/ Douglas W. Maclay Director
Douglas W. Maclay

/s/ R.H. Stewart Mitchell, Jr. Director
R.H. Stewart Mitchell, Jr.

/s/ Cruger S. Ragland Director
Cruger S. Ragland

/s/ Ann Reed Dittmar Director
Ann Reed Dittmar

INDEX TO ATTACHED EXHIBITS

Exhibit Page
- ------- ----

4.2 Purchase Application E-1

10.1 Opinion of Jackson & Walker, L.L.P. E-3
as to legality of securities being registered and related
consent

11.1 Consent of Grant Thornton LLP E-5

EXHIBIT 4.2

PURCHASE APPLICATION
See page 15 for instructions

REGISTRATION
Please register my shares as follows (see page 15 for registration
instructions)

SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER

----------------------------------------------------------------------

(over)

[LOGO] ARMSTRONG ASSOCIATES INC.

SIGNATURE INFORMATION
Your signature should correspond to the name used in registration. If
there are co-owners, both must sign.

CERTIFICATION AND ACKNOWLEDGEMENT
I acknowledge that I have received a copy of the current prospectus of
Armstrong Associates.

I certify, under penalties of perjury, that the Tax
Identification/Social Security number given above is correct and I am
not subject to back-up withholding (see page 15).

The Internal Revenue Service does not require your consent to any
provision of this document other than the certifications required to
avoid backup withholding.

X______________________________ X____________________________________
signature of applicant signature of co-owner (if applicable)

_______________________________
date

[LOGO] ARMSTRONG ASSOCIATES INC.

INSTRUCTIONS FOR OPENING ACCOUNT
Complete the Purchase Application on pages 13 and 14 and mail it,
together with your check made payable to Armstrong Associates, Inc.,
to:

Armstrong Associates, Inc.
750 N. St. Paul, LB 13
Suite 1300
Dallas, Texas 75201

Call Armstrong at (214) 720-9101 in you have any questions on
completing the Purchase Application.

DO NOT USE THE PURCHASE APPLICATION ON PAGES 13 AND 14 TO OPEN A KEOGH,
IRA OR CORPORATE PROFIT SHARING ACCOUNT. APPROPRIATE FORMS FOR THESE
TAX SHELTERED ACCOUNTS ARE AVAILABLE ON REQUEST.

REGISTRATION INSTRUCTIONS (Purchase by one individual)
State applicant's full name. A married woman must use her own given
name. Example: Mrs. Jane S. Jones (NOT Mrs. John R. Jones)

Joint tenants with rights of survivorship will be assumed if shares are
registered jointly and no specification is made.

PARTNERSHIPS
Accounts may be registered in the name of a partnership. The
application must be signed by a duly authorized partner.

CORPORATIONS
Shares to be registered in the name of a corporation must be registered
in the exact legal title of the organization and the application must
be signed by a duly authorized officer.

EXHIBIT 10.1

August 30, 1996

Armstrong Associates, Inc.
750 North St. Paul, Suite 1300
Dallas, Texas 75201

RE: ARMSTRONG ASSOCIATES, INC.

Gentlemen:

We have acted as counsel for Armstrong Associates, Inc., a Texas
corporation (the "Company"), in connection with the Company's registration of
300,000 additional shares ("Shares") of its Common Stock, par value $1.00 per
share, pursuant to Post-Effective Amendment No. 41 to its Registration Statement
on Form N-1A (No. 2- 27539) (the "Registration Statement") under the Securities
Act of 1933, as amended (the "Act"), and the Investment Company Act of 1940, as
amended. As such counsel we have examined and relied upon the originals, or
copies identified to our satisfaction, of such corporate records, documents,
certificates and other instruments that in our judgment are necessary or
appropriate to enable us to render the opinion hereinbelow set forth.

We are of the following opinion:

(1) The Company is a corporation duly incorporated and validly existing
under the laws of the State of Texas with authorized capital stock consisting
solely of 6,000,000 shares of Common Stock, par value of $1.00 per share.

(2) When payment, in an amount per Share equal to the net asset value per
Share of the Company calculated in the manner described in the Registration
Statement, but in no event in an amount less than $1.00 per Share, has been
received by the Company for the sale of Shares, such Shares, when issued, will
be validly issued, fully-paid and nonassessable.

We consent to the filing of this opinion as an exhibit to the Registration
Statement.

Very truly yours,

Jackson & Walker, L.L.P.

EXHIBIT 11.1

Consent of Independent Certified Public Accountants

We have issued our report dated July 17, 1996, accompanying the financial
statements and selected per share data and ratios of Armstrong Associates, Inc.
We consent to the use of the aforementioned report and to the use of our name as
it appears in the Prospectus under the caption "Condensed Financial Information"
and in the Statement of Additional Information under the caption "Other
Information - Independent Auditors".

/s/ Grant Thornton LLP
- --------------------------------
GRANT THORNTON LLP

Dallas, Texas
August 21, 1996