Investview

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Investment Views (June 26th 2000)

Sorry that we couldn't publish this issue of Investment Views on time. Our Netscape
Composer was out of order.

Markets in General

The general market is stuck in a trading range. The Dow barely budged last
week. But the Nasdaq managed to break out of its earlier range: 3200-3800 on
the Nasdaq Composite Index. Next week the Fed will meet again and it
will be the end of the month. We expect some window dressing and short
covering. Last week we issued a warning that traders should not be
short in this market, especially not in the Nasdaq. We're still convinced that
the market could break out as soon as the Fed gives the signal that they're
finished with rate hiking.

Europe has been backing and filling as well. Both CAC and DAX have basically
not really moved much. The volume has been extremely thin. The markets are still
spooked by the half point interest rates rise. The crude oil prices is also putting a
damper on the enthusiasm for stocks. The European markets are still waiting
for Wall Street to recover first.

The Swiss market has been following the Dow downwards. The market
has become oversold. We expect a recovery. We have to see if the
markets get back above the 7700 level again. Then the goal would be
8000.

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Stocks

Our favorite stocks remains SAP, Nokia, Ericcson, Cable and Wireless.

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
7819.80	6968			SMI	7796.80	7875.20	7826.40	7845.60
E 90	50	53.5 (2000)	+48.60%	AT&S	77.50	79.50	76	79.50
SFr. 3650	2475	1351(1998)	+155.37%	Bachem	3590	3495	3450	3450
		260 (2000)	+37.69%	Biodata	346	360	346	358
Gbp 15.77	8.28	4.9(1998)	+150%	C&W	11.83	13.12	12.25	12.25
E 368.90	210.10	140(1998)	+47.14%	Cap Gemini	212	206	196.20	206
SFr.44.25	21.5	10(1998)	+247.50%	Ericsson	37.85	35.95	34.45	34.75
E190	66.40	149 (2000)	-11%	Epcos	141.20	143.79	131.50	132.60
E.199	E.32	28 (1999)	+250%	Evotec	90.25	99	97	98
E 474	370.10	189(1998)	+127.25%	LVMH	439.70	449	420	429.50
Sfr.275	133	60(1999)	+231.66%	New Ventur	196	200	193.75	199
E.64.90	37.50	7.50(1997)	+715.86%	Nokia	60.40	61.20	59.50	61.19
SFR.19400	17600	SFr.16900** (2000)	-.08%	Roche GS	17100	17030	16885	16885
SFr.1369	655	140(1997)	+468.57%	SAP	788	803	792	796
E 96	54	17.7(1999)	+199.43%	Sonera	57.60	56.50	53	53
SFr.845	660	460(1998)	+63.70%	Syn-Stratec	770	760	745	753
SFr1050	661	703(2000)	+26.5%	Think Tools	890	888	862	888
E 63.50	16	14.9(1999)	+277.18%	Zeltia	55.80	56.45	55.60	56.20

*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. **adjusted for Givaudan spinoff.

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Currencies and Bonds

A few weeks ago we wrote:

The dollar has remained strong against the Euro, even during the stock market turmoil.
While the US trade deficit got worse, but dollar moved up against the Euro instead of
falling. Thus we have an unbroken upwards trend for the dollar. The interest rates
differentials are still positive and the shrinking federal deficit another positive factor.
We remain cautiously optimistic on the dollar. But Euro should have good support around
the .90 level. Soro's managers had obviously suffered huge losses betting on the Euros. So
the Euro weakness could have been exacerbated by hedge funds' liquidation.
So the watershed event on the Euro might have taken place already.

The Euro has fallen below the . 90 level again and again. We have the Euro closing the
day below .90. But we kept on getting rebounds back above the .90 level. All the
analysts on CNBC have become Euro-pessimists and expect a very weak summer
for the Euro. Maybe the Euro has bottomed.

I think we were correct in calling a Euro bottom. Since our call, the Euro has recovered
above the .95 level. We remain convinced that the "correct" level of the Euro should
be 1-1: that the longer term trend of the Euro should be up and not down. Trade deficits
and current account deficits are all indications for how strong an economy is. In the
long term the market exchange rates will reflect such fundamental trends.

The dollar has also declined against the Swiss Francs. SFr. 1.60 is critical. If that level
should break, we should see further dollar weakness.

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Future Trends

The internet will transform our world in a massive way. I think it is time to
begin and do some thinking on what kind of change it will bring and see if
we can draw some conclusions that are relevant to our investment decisions.

First, as we have opined in this column we do not believe many of the today
sky high internet stocks will eventually make a lot of money. The internet
is such a competitive forum. The pricing pressure is so great so that only
providers with brand name recognition and meaningful contents will be able
to have some pricing power. We must remember what the internet eventually
will bring is absolute international competition. Price competition will be fierce.
Middle men will be eliminated. Therefore we see many service sector jobs
will be eliminated. For example, we see this trend in the financial sector already.
More and more people are trading stocks on line. With internet brokerage
charging less than $10 per trade, we should see brokers and financial advisors
being eliminated at major brokerages in a big way soon. The same should
happen in other tradable items. For example, there will be less need for
retail stores for items that one can buy easily on the internet. Of course
there will be branches of the economy that will profit. For example:
the telecoms, the Federal Expresses, and the computer software industries.
But the question is: Will the general economy really profit or will the general
deflationary trend continue and become worse and worse? Without pricing
power and with lots of jobs being eliminated and salaries on hold, we see
the world economies trending toward deflation, even if it continues to grow.
That means real estates and gold will become even less appealing. If we
believe our argumentation, we would not invest in the "internet" stocks
themselves but in the companies that do have contents and pricing power
as well as companies that will offer services to the internet providers
and users: ie. companies such as Sony, Time Warner, Dow Jones,
and UPS. We would also recommend the stocks of Corsair (CAIR),Qualcomm,
Ericsson, Nokia, Epcos the equipment and software provider for the CDMA,
the next wireless telephony standard as well as stocks of telephone companies
like Sonera, ATT, Worldcom-MCI, Colt Communications, and Swisscom. We also
see internet companies needing ever more sophisticated software. Therefore
we're quite optimistic about the long term future of the likes of IBM, Oracle,
SAP, Cap Gemini,Broadvision and i2 technologies.

*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!