1997 MID YEAR MARKET FORECASTS

It has been past practice to begin with a review of our 1997 forecasts. As this is being down on a monthly basis on our web site, there is no need to comment beyond that our March 11 call for a top in the DIJA was both perfect, but alas shortlived....

MARKET TIMING - THE BIG PICTURE

Over the next 3 years, we believe real assets ( tangible goods) will outperform financial assets (stocks). While there will be exceptions overall, $100,000 invested in Real Estate today will be worth more than $100,000 invested in the stock market.

When buying stocks for the long term, look to companies that are building businesses, i.e. are in harmony with the upcoming Jupiter/Saturn conjunction in May 2000.

Year end we expect the market to return at best single digits and quite likely minus. REVENGE OF THE MONEY MANAGERS AGAINST INDEXING.

Our forecast for the remainder of 1997 is:

JULY DOWN/ SEPTEMBER TO FEBRUARY DOWN (XMAS rally).

STOCK SELECTION

Begin with one or more of the following 3 criteria:

THEMES

EXAMPLES - TELECOMS

ATT (T) is an example of 1.

Frontier (FRO) is an example of 2 (as well as a potential takeover candidate).

Lucent (LU) is an an example of 3 (would buy on a 30% correction).

THIS SUMMER