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Investment Views (September 18th 2000)

Markets in General

Last week most investment advisors on CNBC are exuding confidence
about the market citing statistics about election year etc. But the markets fell.
Goes to show that actually no one can really predict short term market movements.
What we need to focus on is the fact that the Dow has broken out of a huge flag
pattern. This usually means that the market will at least test its old highs at around
11700. But until the market really move above that level, we cannot really
know whether the Dow will make new highs. The Nasdaq is near its support level
around 3800. We'll have to see whether that support level will hold next week.
Nasdaq is becoming oversold. But oversold conditions on the Nasdaq can last
some time.

The European markets are following the US. Both the CAC and Dax
have been weak. Indeed the Dax fell to the 7080 level before recovering
at bit. With the Dow closing so weak, we will probably see the Dax falling
below the 7000 level again.

The SMI is still correcting. We wrote last week:

We have no idea how far this correction will go. The Swiss
Market had been the only European market that
did not go through the summer correction. Judging from the depth of
the German and French correction, we should see the market fall below
8000 again. Our target is 7800. Other analysts even call for 7400.
The Swiss are momentum investors. So the upwards and downwards
movements tend to be extreme. Also we're approaching the traditional
weak months: September, October, November. So only time will tell
how low this correction will bring the market.

Although the market closed above the 8000 level, we expect the market to
test the 7800 support level, because the 8000 level was broken briefly.
At that level we would start to cover shorts. The 7400 level is still a possibility.
But the market has become extremely oversold. The danger to remaining short has
become too high.

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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	8088.10	8021.90	7969	8014.40
E 48.30	12.40	26.75 (2000)	+53.64%	AT&S	41.50	41.8	41	41.10
SFr. 4000	2475	1351(1998)	+149.37%	Bachem	3495	3389	3321	3369
Gbp17.56	3.13	6.50(2000)	+14.15%	BaltimoreTech	7.79	7.77	7.10	7.42
E 420	207	260 (2000)	+28%	Biodata	334	340	321	333
Gbp 15.77	8.28	4.9(1998)	+24.48%	C&W	11.75	11.81	11	11
E 368.90	210.10	140(1998)	+50.78%	Cap Gemini	220.50	218.90	208.20	211.10
SFr.44.25	21.5	10(1998)	+230%	Ericsson	34.45	34	32.50	33
E.102.50	E.16	14 (1999)	+300%	Evotec	56.74	57	55	56
E 97	70.25	37.8(1998)	+127.65%	LVMH	87	89.25	86.05	86.05
Sfr.275	133	60(1999)	+166.66%	New Ventur	160.25	160	155	160
E.64.90	37.50	7.50(1997)	+588%	Nokia	49.20	52.69	51	51.60
SFR.19400	17600	SFr.16900** (2000)	-10.94%	Roche GS	15370	15150	14850	15050
SFr.456.33	218	46.66(1997)	+602.95%	SAP	351	333	324	328
E 97	33.10	17.7(1999)	+102.20%	Sonera	36.69	36.50	35.25	35.79
SFr.850	660	460(1998)	+148.04%	Syn-Stratec	1130	1141	1123	1141
SFr1050	661	703(2000)	+23.75%	Think Tools	919	875	856	870
E 18.325	4	3.725(1999)	+504.02%	Zeltia	17.50	23.50	22	22.50

*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.

Zeltia has splitted 4:1. This stock has been a super performer. We remain very enthusiastic
about the firm. It has transformed itself into a very interesting biotech company instead of
traditional pharma. Zeltia continues to rocket. Everyone is excited about its new drug for
cancer treatment.

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Currencies and Bonds

The Euro has been extremely weak. The support around .87 and .88 did not hold.
We expect to see the .85 level soon. Indeed we might even see .80 level. Fundamentally
we do not feel the .85 level is justified, despite of the strong crude oil prices. But
currency markets tend to move from one extreme to another. Therefore there is
no guarantee that the Euro will not become extremely undervalued.

The Swiss Franc has been stronger than the Euro. But still it has fallen to the 1.78 level.
We still expect to see the Franc to fall to the 1.80 before a more serious recovery.

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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!