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    • Investment Views    (September 24th 2001)

    We pray for all the people who died in the terrible terrorist attack in the US. May all the innocent souls rest in peace.

      Markets in General                                     

             The worst nightmare of investors has happend on September 11th.  Now the uncertainties
             are just overwhelming the markets everywhere in the world.  The terrorists have certainly
             achieved their goal of destabilization.  What is an investor to do in this kind of climate?
             We have luckily been quite distrustful of this market this whole year.  Bailing out now would
             be perhaps too late.  The best thing is to be patient and wait for the economy to turn.
             The recession in the US should be quite shallow, since the Fed has lowered interest rates and
             added liquidity.  But a roaring bull market will not be coming back for quite some time.
             The best we can hope for is some kind of  short term recovery, after the US have started
             its military actions.
           
             The Dax, CAC and the Swiss Market Index has been much weaker than the Dow. 
             The European stock markets have much less retail investors who seem to be cushioning
             the decline on Wall Street.  Institutional investors and insurance companies are bailing out
             in droves.  There are just no buyers around.  The European markets have fallen below
             their lows made in 1998.  On Friday, the Dax's decline has slowed, but we saw no sign
             of deceleration in Switzerland.  I wrote in July:
             
                 The Swiss Market  has retested its recent lows. Although the market closed the week at
                 the 7240 level, we would not turn wildly bullish any time soon.  The Swiss market is very
                 seasonal.  Buying now is not advisable, because the summer vacation is approaching.  The
                 volume will be very thin.  October is traditionally the selling season.  So it might be better to
                 wait until November or December.

            That was quite prescient.

    Stocks              


      Our favorite stocks remains
     
     
                               
    High of the Year Low of the Year Price and year of recommend.  Performance since recommend. Stock Last* Week's
    Close    		 Daily high Daily low This Week's Close
    8080
    		 6968

    		SMI 6954.90
            		7241
          		7113.90
            		7240.20
       
    E.104.60
    		 70.10
    		 81.73(2001)
             
     -7.3%                  		Fresenius Medical

    		 81.88
                       		76
                    		66
                      		75.50
               
    E92.10
    		 68.60
    		 75(2001)
    		 -10.86%
    L'Oreal
    		 76.25
    		 70.25
                     		64
    		 66.85
                
    E.64.90 37.50 7.50(1997) +125.73% Nokia
    		 21.95
          		17.35
          		15.60
          		16.93
     
    SFr.278           147
    		 46.66(1997) +210.22% SAP 235
              		148.75
          		132
            		144.75
       
    SFr.1170 810
    		 460(1998) +97.39% Syn-Stratec 1040
              		953
            		885
            		908
       
    E 26.60 4
    		 3(1999) +108.33%
    Zeltia    		 8.50
               		6.25
               		6.25
               		          6.25
     
    *We decided to calculate the performance since recommendation, because we have recommended the different stocks
    to buy at different times.  Since we're convinced that one should be long term investors, we think the performance
    since recommendation is a better reflection of  our goals.  *Because of my long absence, I decided to put in the
    prices of the stocks a day earlier instead of the prices of a week ago.

     
    We advocated systematically selling stocks that have lost 20%, because  we believe it is
    better to get rid of the losers than holding on to them. Thus we have taken Feintools, Hiestand
    and LVMH from our recommended list.  Feintools being in the automobile branch was
    recommended, because we thought the economy would recover soon.  But the economy hasn't
    recovered at all.  Now with the terrorist attack on the World Trade Center, we think the economy
    will take longer overcome the recession.

    Go to Index


    Currencies and Bonds
                 The dollar  is on its way down.  The  very important support level  SFr. 1.60  has been
               broken.  We still do not see a wholesale  dollar  collapse,  because  the  Bank of  Japan
               and the  European  Central  Bank  wouldn't  like to see  a  very  weak  dollar.  Also
               the  last  few  years  the  US  economy has  proven itself to be robust and innovative.
               We think the goodwill of investors will not be destroyed so swiftly  by terrorists.

    Go to Index


    The World Economy


    As we have written a few years ago, we believe that the new economy is a deflationary one.   The developements
    in technology hasn't been accompanied by improvment in the world financial system.  Wealth is very
    unevenly distributed.  In the last few decades wealth has become more and more concentrated  in the hands
    of a few.  That means we don't have enough consumers with enough buying power in this world to absorb
    all the new products that our new technology has made cheaper and easier to produce.  Until the poorest
    countries' debts are forgiven and other developing countries are given better terms to repay their debts, we
    doubt the world economy can return to a steady growth pattern. 





     

              
     
     
    *The stock prices are   provided  for informational purposes only and  not intended  for   trading purposes.  The opinions expressed in these pages are what they   are: opinions!