December 2000 - January 2001
Newsletter

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Disclaimer: SA Advisory usually buys all recommendations prior to phone service, e-mail and newsletter recommendation on mentioned securities. The editor may buy, hold or sell positions in all securities at any time. The portfolios are all hypothetical in nature SA Advisory's portfolios are geared toward sophisticated investors aiming for short, medium and long-term capital gains. By nature, the editor is a stock trader and his trading habits may vary at his own discretion. Most, if not all, recommendations are based upon strict fundamental analysis. Revenue and earnings estimates are the foundation for our recommendations. The estimates result from management discussion. We do not intend to misinform, mislead or hype our readers. It is prudent for all investors to review all filings with the SEC (10Q & 10K) and contact management before investing. Investing in securities are inherent to risks to your financial health. If we are ever paid to produce a corporate profile, full disclosure will be made. WE HAVE NOT BEEN PAID FOR ANY OF OUR RECOMMENDATIONS.

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MARKET OVERVIEW

We are so Bullish that we are almost foaming. Why, you ask?

1. NASDAQ down 50% from 52 week high.
2. Most other indexes making new 52 week lows.
3. The majority of tech stocks are down 70% - 80%.
4. The growth stocks now resemble value stocks.
5. The penny stocks are so dead, most canÕt afford caskets.
6. The dot.coms have been exterminated.
7. One of the best indicators is that almost every major brokerage firm has turned Bearish on everything and anything that has 2, 3 or 4 letters. At the top of the market they are wildly Bullish and at the bottom they are rabid Bearish.
8. Interest rates have obviously peaked and as early as December 19, 2000, the Fed may go neutral or, could you believe, an interest rate cut.
9. The markets are digesting a soft recession of sorts.
10. With a slowing economy, oil prices will also moderate (natural gas in our opinion will remain firm - we remain very Bullish on gas - see recommendation on AOG.TO).
11. Have a strong US Dollar, a weak EURO, Asian and Latin American stagnation, and suddenly a very cheap equity market. All of this bodes well for a huge money flow into our markets. We still are the biggest, best and safest - GLOBAL INVESTORS ARE READY.
12. Mutual Fund cash levels higher than normal, 401K monies will need a home, a new president (Bush), and a "New Mood".
13. Finally! The word "stock" is considered a vulgar expletive, and at the cocktail parties have overheard dialogue which warms our ears with repos, chapter 11Õs, pink slip memos, margin calls and moving sales.

All in all, we have not been this BULLISH in years!

Yours truly,
William Velmer

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