Publisher: Colin Alexander Editor: Ken Wilson (450-691-4617)
Subscriptions and Administration: Pierre Fichaud (514-487-3072)

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The markets have become inexorably bearish over the last few sessions. At
this moment, we could be on the verge of a sharp decline down to either
matching the April lows or quite likely descending to a new low below those
levels. This is, and continues to be, a bear market and while some stocks
will go up, the overwhelming majority will fall. Upside potential at this
juncture is incredibly minimal while downside risk is much too heavy to
avoid or ignore. Many industry pundits have said that the low for this
market was made in April, but we believe that the low has yet to be made.
The Nasdaq 100 could still halve from this point and the Dow, which has
often seemed to be unhitched from other market action, could see the 7200
level before the bear is finished. While some analysts would prefer that you
see this situation as a buying opportunity, we prefer that you see this as a
time to sell.

It is good time to remind ourselves that bear markets last several months
more than 5 or 6 or 9. Historically most bear markets have ended only after
enduring 15-30 months and the duration is relative to the bull market that
preceded the bear. This latest bull market really began in 1991 and ended
last year thus giving us reason to believe that the bear could last for
quite some time yet. That doesn't mean that the markets will go down in a
straight line however; it could provoke some very credible rallies that move
share prices quite far. Unfortunately these rallies tend to be extremely
volatile as we have seen this past week and can ignite and fizzle within a
few hours.

When the train is rushing down the track and we're standing in the way, we
prefer to step aside and watch it go past. So in keeping with this analogy
and for our own personal safety, we are recommending that all long positions
be sold immediately except the following:

PDS
TRP
KMP
AOF
ACG
MUO

We are keeping PDS because it trades at around 14 times this year's earnings
estimate (Dec/2001) and as such it's a candidate for a takeover. For
comparability, we could look at Haliburton and see that it trades at a
" mere" 33 times this year's earnings estimate. With explorating expanding in
N. America, we see no slowdown in earnings potential with PDS.

As for TRP, it trades much like a bond and in this environment, bonds are
the favored safe haven. And in the case of KMP, it acts much like a REIT
distributing the income from its constantly growing pipeline operations.

Under the Sell banner, we have the following:
ALLY
AMGN
QFAB
SCIO
SKX

All of the stocks held short will continue as there is a potential downside
that could be quite profitable for us.