S.A. Advisory E-Mail Update

October 6th, 2002

S. A. Advisory message for Oct 6, 2002
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Why we have been destroyed!
1.  9-11
2. war in Afghanistan
3. Conflict in the Middle East
4. Pending war in Iraq
5. India and Pakistan
6. Corporate scandals
7. Lack of visibility for earnings
8. High Oil prices
9. Major Dock Strike on West Coast
10. Stock Market Bubble of 2000 still unwinding
11.Short seller are relentless
12.Media drum pounding on Corporate ethics and corporate outlook
13. Poor Political leaders with little domestic vision
14.Endless Margin Calls
15 Extremely Bearish attitude  towards equities
16 Seasonal investment climate has lived up to its reputation (May-Oct)
17 Domestic recovery in question
The NASDAQ has now fallen 80% from the March 2000 high of 5000.  We
now stand @ 1100 or so .  At the rate of collapse the NASDAQ will be @ ZERO
within a month  or so!  We do not think that this will happen, but it shows us that
this market is totally irrational and makes little sense.  The financial ruin for this
country have been over $ 8 trillion dollars since March 2000!
We have to believe that we are close to a bottom, but we have thought this before only to see
lower lows!
We believe that the Fed should lower rates in order to help stabilize the implosion of the markets.
It may be viewed as signs that the economy is not in a recovery, but the market is already telling us 
this is the case!  The Dock strike should be halted TODAY!  The President can do this and he should-
this factor alone is causing severe harm to an already fragile economy!  The Pinheads in Washington
need to cut taxes on corporations and on dividends and WE NEED A CAPITAL GAINS TAX CUT !
If we are close to a bottom and you have capital left-some of it should be placed back into equities-
micro-caps, mid-caps and large-cap (many are now small caps).
ASIC--pink sheets
First: In our August 26 E-mail--we  recommended a small but cash rich shell with .45/sh --share price
was .15---it is now .24--the company has decided to liquidate.  The only problem is that it will take a total
of 3 years to be completed.  Once shareholders vote to liquidate the stock will stop trading--meaning that
you will be stuck-- We suggest that you SELL your position and take the .09/sh--seem to be a very strong
bid and it is  buying everything.  Unless you want to hang in for the ride- which will be long term!  The
company in my opinion should have declared a special dividend and then sold the shell!  It is really to bad
that management could not find a private company with $15 to $20 million in rev that would have been 
Great IT company that has been featured in past newsletters and e-mails.  In a technology climate that
resembles "HELL" this company has remained profitable!  First quarter ETEC earned .02/sh.  The
company has also made two acquisitions and is growing rapidly.   ETEC should easily reach $100 million
in rev for current fiscal yr.  Only 7 million shares outstanding and a share price of .25-.45  We rate
ETEC with a strong buy rating.
Recently released a complete research report on SETO--See Sept/Oct 02 research report on Homepage.
The company has recently released earnings for the six months --rev and earnings at record levels.
The company has booked in .06 for six months and management projects .12 for the year.  Currently
the stock has been hit (like everything else) and is not offered @ .24---This is a steal and we continue to
rate SETO with a Strong Buy rating!*
Another micro-cap that looks very attractive @ current levels.  Read press release
http://biz.yahoo.com/bw/02097/272207_1.html   This company has not shown a profit
for 5 years.  With rev of $20 million and .01 income/sh ( 9 million shares outstanding)
A major turn-around looks to be in place! Current price .10-.22 .  We rate AFPC with
a BUY rating @ current levels.
A teleco equipment & electronic components company.  See recent August 15 earnings report-
MCTL shows a .01/sh profit ( 21.5 million shares outstanding)..More important read this press
release  http://biz.yahoo.com/bw/020926/260007_1.html  We rate MCTL with a strong Buy 
rating @ current levels.  This  new product may hurdle MCTL into the $1.00 range rapidly 
regardless of current market environment.  Current price .20-.23
Kicking Horse Resources:  Been suspended for months and months because of ongoing acquisition
plans to acquire "Leduc properties" in Canada.  What else can go wrong!  We spoke to management
on Oct 4, 02--  David Murray-President:  production over 1200 boepd and growing, new wells coming
on stream and a few new wells at going to be drilled soon!  Anticipate a press release this week according
to Murray.  He states that one of the funding sources is the hold-up and should be remedied soon.  He
states that the deal looks like that it will happen at much lower prices and trading will resume soon.
He states that financial were not completed because of the $10 million deposit for "leduc"  which should
be shown as a asset instead of an expense.  This is the latest spin from the "horses mouth himself".
Believe it or not!
This company is involved in Bullet resistant vests for police and military.  For the six months rev reached
$67 million and net income/sh of .24--See press release  http://biz.yahoo.com/prnews/029806/nytu098_2.html
The problem with this stock- under attack by a union, stories about vests that don't work and now a shareholders lawsuit.
Currently the stock is $1.63---Management estimates $130 million rev and $20 million income ( income before taxes ,ect)
Still DHB should at least earn .35 to .40 if not more! Lots of unanswered questions , but in our opinion still a BUY @ current
levels.  Lots of contracts and trading near 52 week low.
Another defense related micro-cap that manufactures and distributes worldwide bullet proof vests and related products. Most
exciting product in our opinion is the "Ballistic Wall Coverings" that prevent explosions from spreading beyond the room
that they are hung within. We are currently finalizing a research report on this company and will be released soon!
Current price is $1.20---speculative in nature looks very interesting @ current levels.  Review many current news releases
and websites.*
MEAD-nasdaq  $3.00            DXPE- otc  $1.03     CAMY- otc .40     ELNK-nasdaq   $4.93    ADCT-nasdaq  $1.15
DAL-$7.85                BA-$32.00               INTC-$13.71             CSCO-$9.46               EMC-  $3.83
HD-$25.80                SUNW- $2.42           WM- $28.83             BK- $22.58                 FDC- $26.40
AES-$1.98                CPN- $2.32              ELN- $1.32               DYN- $.97
Don't really know how much worse it can get.  It has been mentally as well as financially devastating.
As mentioned earlier--At current rates the NASDAQ will only last a month or so before it is ZERO!
This is the clue-IRRATIONAL  SELLING
** = denotes that we have been paid to produce a research report --fundamentally oriented
Happy Investing!
Yours truly  William Velmer   editor  19 years


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