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Index

Investment Views (August 21st 2000)

Markets in General

Last week was options expiration week. The market has quietly trended
upwards, although the Dow has corrected a bit. But there was no
real selling pressure, even though the market has become relatively
overbought. Next Tuesday the Fed will be meeting again. The
consensus is that the Fed will not raise interest rates again. Indeed
they will probably refrain from raising during the whole election campaign.
The US economy remains strong. But the productivity gains have been
also strong. So the Fed has some wiggle room. But there is still
the possibility that the economy will accelerate again during the
second half. Therefore higher interest rates might still be in the cards
early next year. Because the consensus is so bullish for the next
few months, we have become a bit more cautious. It is still likely that
the market will trade within the trading ranges until after the elections.

The European markets are following the US. The Dax and CAC
recovered a bit last week. But the recovery is still tentative. And
it's a two steps forwards and one step backwards kind of movement.
The high tech stocks on the Neuer Markt are still in the basement.
There are talks again that the ECB might raise the interest rates again.
Therefore we remain cautiously optimistic.

The SMI corrected slightly after testing new highs at above 8300. But there was
no great selling pressure. We expect the market to move between 8400 and
8150.

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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
8080	6968			SMI	8119.60	8303.4	8248.9	8251.90
E 48.30	12.40	26.75 (2000)	+70.09%	AT&S	40	45.50	43	45.50
SFr. 4000	2475	1351(1998)	+140.19%	Bachem	3780	3260	3202	3245
Gbp17.56	3.13	6.50	+0%	BaltimoreTech	6.35	6.65	6.40	6.55
E 420	207	260 (2000)	+18.85%	Biodata	322	317	308	309
Gbp 15.77	8.28	4.9(1998)	+128.78%	C&W	11.45	11.55	11.15	11.21
E 368.90	210.10	140(1998)	+38.07%	Cap Gemini	189.50	197.80	192.50	193.30
SFr.44.25	21.5	10(1998)	+245.50%	Ericsson	30	35	34	34.55
E.102.50	E.16	14 (1999)	+201.43%	Evotec	42.50	43.25	40	42.20
E 97	70.25	37.8(1998)	+144.97%	LVMH	92.95	94.50	90.20	92.60
Sfr.275	133	60(1999)	+168.33%	New Ventur	175	164	160.50	161
E.64.90	37.50	7.50(1997)	+510.37%	Nokia	45.20	45.88	44.50	45.80
SFR.19400	17600	SFr.16900** (2000)	-7.07%	Roche GS	16350	15990	15705	15705
SFr.456.33	218	46.66(1997)	+624.39%	SAP	300.50	342	332.50	338
E 97	39.70	17.7(1999)	+132.49%	Sonera	40.40	41.50	36.75	41.15
SFr.850	660	460(1998)	+131.52%	Syn-Stratec	925	1073	1020	1065
SFr1050	661	703(2000)	+27.88%	Think Tools	777	903	882	899
E 73.30	16	14.9(1999)	+342.95%	Zeltia	62.50	66	65	66

*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.

Week before last, AT&S has succombed to weakness after splitting 2:1. The telecom stocks have
recovered a bit last week. At&S did well too. We are still very bullish on the telecom infra-structure
and component companies. We recommend buying Ericsson and Nokia on weakness as well as
AT&S.

Last week Roche reported very disappointing numbers. Sales in Pharma have been especially
disappointing. The diet drug, Xenical, has not turn out to the the blockbuster that analysts had expected.
Roche will have some rough patches in the next one to two years. Since we are very long term
investors, we recommend staying with the stock.

Synthes-Stratec has announced fantastic numbers for the first half year. Profits increased
by more than 40%, before goodwill. We continue to be very much committed to
Stratec. Bone-replacement business may not be real high tech. But as we have pointed
out earlier, it's a business that doesn't know any cyclicality. And the general
population trends of the world is highly favorible.

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Currencies and Bonds

Last week the dollar did not manage to break through the .90 level to the Euro.
We expect the Euro to recover a bit. .90 is still the level to watch.

Swiss Franc has weakened against the dollar to 1.72. If the dollar can climb above
the 1.74 level, we feel that the Swiss Franc might even fall to the 1.80 level.
However, as long as the Euro hovers above the .90 level, we do not expect
a plunge in Swiss Francs.

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Future Trends

Investors seem to be cooling towards the idea of the 3rd generation wireless
telephones. But it is a technology that is coming to the market within the
next couple of years. So why are the stocks of Qualcomm down so much
and that of Ericsson and Nokia are going nowhere? The problem seems to
be the high 3rd generation licence fees that countries in Europe are demanding
from the telecom companies. People seem to think that the sky-high
cost could delay the implementation and that telecom companies
might be tempted to only build the 3rd generation systems in areas
where the telephone charges will be able to cover costs. Therefore
the capacities build might be much smaller than anticipated. On the
other hand people should take into consideration that the telecom
companies might be very anxious to get their systems going as soon as
possible, because the licence fees are so high. They will need the
income stream generated by the new systems as soon as possible.
Plus companies like Qualcomm and Ericcson will only stand to
profit from the building and converting the present telephony system
to the new standards. The question will be how much and how soon and not
if at all. We recommend buying these stocks on weakness.

*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!