Index

Investment Views (January 22nd 2001)

Markets in General

Hi everyone, I'm back. I missed the incredible slaughter of the last few
weeks. I'm glad. The market action got really ugly. It's certainly
better not watching such carnage.

I got back and the market promptly recovered a bit. If I didn't know
better, I would probably attribute the positive aspect to my return!
Anyway, although we hear a lot of doom and gloom, we're not overly
impressed. The Fed has started to lower interest rates. Usually the
market will recovered decisively when the Fed lowered the interest
rates again. It's Alan Greenspan to the rescue again. Thus if he does lower
the interest rates next week, we should see a trend change on Wall Street.

The Wall Street doom and gloom spreaded to Europe. Der Neue Markt
got klobbered. The tech growth stocks in Europe are sometimes only
a fraction of their last highs. Still nobody seems to be buying into the
baisse. As usual, Europe is waiting for a signal from Wall Street.

The Swiss market was one of the few markets that did not correct massively
during the last few weeks, because the Swiss market is heavy on old economy
defensive stocks. But our projection of 7800 level on the SMI has been met.
We have seen the stocks been taken down to that level repeatedly. Therefore
next week will be crucial. If that level does not hold, we might see much lower
market.

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

Since we last wrote, the dollar has fallen to the 1.60 level on the Swiss Francs and
around .94 on the Euro. We still believe that par is the "correct" level of the Euro.
Therefore our target of SFr.1.50 is still achievable.

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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!