Index

Investment Views (December 4th 2000)

We shall be leaving on December 10th for an extended retreat. This column will not be
updated again until mid-January. I wish everyone a Merry Christmas and a happy new
year. Don't let the falling market ruin your holidays.

Markets in General

Since we're nowhere near a resolution in the presidential elections,
we do not expect the markets to recover decisively. So we're
sticking to our opinions of a few weeks ago.

We still do not expect the market to recover decisively until after the
election is decided and the Fed begins to lower interest rates. Until then
it will be a volatile market.

How long does it take to work off the extreme overvaluedness of the tech
stocks? Most internet stocks have fallen more than 60%. Indeed some
are reduced to about a quarter from their highs. Yet nobody seems to
be in a hurry to do any bargain hunting. Thus we remain extremely cautious
about the market.

The European markets follow the Wall Street, although the European economy
is not as weak as analysts expected. The uncertainty of the US presidential
election is weighing strongly on the European markets, given the role
of the US as the world growth engine. The German market index, the Dax,
is even testing the 6000 level again. We have no idea, when this
slide will be over. The European stocks have corrected even more than
the Nasdaq. These stocks are becoming bargains.

The Swiss market was one of the few markets that did not correct massively
last week. The Swiss market is heavy on old economy defensive stocks.
Therefore it is no surprise that this market is holding up better than most other
markets. But we should not forget, Wall Street still is predominant in trendsetting.
We could therefore see the SMI falling to the 7800 level.

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	8081.50	8066.20	7979.80	8050.50
E 48.30	12.40	26.75 (2000)	+7%	AT&S	30.50	28.89	26.50	28.70
SFr. 4000	2475	1351(1998)	+99%	Bachem	2907	2771	2690	2690
Gbp 15.77	8.28	4.9(1998)	+81%	C&W	9.39	9.20	8.64	8.88
E 368.90	210.10	140(1998)	+14%	Cap Gemini	168	165	159.30	159.70
SFr.44.25	20.20	10(1998)	+116%	Ericsson	20.50	21.65	20.15	21.55
E.102.50	E.16	14 (1999)	+105%	Evotec	28.70	29.50	27.50	28.70
E.104.60	70.10	98.50	-11%	Fresenius Medical	97.70	95.45	85.31	87.65
E 97	70.25	37.8(1998)	+93%	LVMH	79	76.70	72.65	73
Sfr.275	133	60(1999)	+108%	New Ventur	130	128	123.25	125
E.64.90	37.50	7.50(1997)	+573%	Nokia	50	50.50	49.05	50.45
SFR.19400	17600	SFr.16900** (2000)	+2%	Roche GS	17025	17300	17195	17300
SFr.456.33	218	46.66(1997)	+321%	SAP	218.75	197	190	196.60
E 97	33.10	17.7(1999)	+34%	Sonera	24.52	23.70	21.82	23.70
SFr.850	660	460(1998)	+126%	Syn-Stratec	1061	1041	1010	1040
E 18.325	4	3.725(1999)	+458%	Zeltia	20.50	20.80	20.80	20.80

*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.

For more than a year people went overboard buying the so called "new economy" stocks that
promise to be noncyclical and have high growth rates. But as the red hot US economy
cools down, we see the high tech bubble bursting. These companies are obviously
not immune to economic slowdowns. People are piling into the defensive stocks.
We would be very careful. The market could overdo caution.

We have eliminated Biodata from our recommended list, because it has lost more than 20%
from our recommended level. 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.

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Currencies and Bonds

The dollar is falling. We believe the fair exchange rate between Euro and dollar is
par. So we think the dollar will eventually get to that level. On that view the Swiss
Francs should rise to SFr. 1.50. But the trend will not have changed until the
Euro returns safely above .90 level. The Swiss Francs will have to appreciate
to around SFr.1.69. Until that happens we could still see the dollar going back
up to the .80 on the Euro and SFr. 1.80.

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The World Financial System and World Trade

Lately we have seen a truely thoughtful review of the world financial system in the Business Week .
We certainly feel vindicated in our views stated during the last world financial crisis. We remember
the outcry in the Western press, when Malaysia imposed financial controls essentially forbidding
foreign investors to exit Malaysia. The Western press also made a big deal, when Hong Kong's
government intervened to support the market and driving out the short sellers. Ironically these
two countries are the most successful in recovery after the 1998 financial crisis, while Thailand being
the country that really tried to follow all the prescriptions of the IMF and other free market advocators, has
yet to see its economy recover from that vicious attack of international short sellers. We're happy
to see that people are slowly coming to see that unrestrained free markets can cause hevoc in
developing economies. That the world need a new financial order. Let's hope that the US
will not stand in the way of reforms of the world financial system.

*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!