Since our last full report and delivery of our complete list of recommendations on July 25, the general stock market has been decidedly droopy. In mid-July there seemed to be a case for selling all stocks and, indeed, many stocks along with the major indexes have declined significantly. Among our stocks, there have been quite significant declines in such stocks as Lucent and IBM compared with their recent highs. Nevertheless, had we sold all stocks, we would have dumped some conspicuous winners, and would have done so for no good reason. For example, there has been a huge gain in Idec Pharmaceuticals, and some like LSI Logic, QLT and PMC Sierra never seem to stop going up regardless of market conditions. Given this divergence, it is worth point out what happens if you invest $1,000 in each of two stocks. One stock doubles and the other halves. The outcome is that your $2,000 is worth $2,500 because the winner more than compensates for the loser.

Changes: Stocks to Sell

Diageo(DEO), bought on 5/11/99 at $47.75 and now at $41.19. This
European liquor company is said to be a powerhouse of value and good management. Nevertheless, chart action is lackluster and we are looking for stocks to sell in order to go more heavily into petroleum.

China Fund(CHN), bought on 5/11/99 at $9.88 and now at $10.63. We once had a very big profit but have given most of it back. China appears to be the laggard in Asia. We stay with our other Asian funds but here again we want to free up some money and the chart no longer looks as great as it once did.

Stocks to Buy Now

Enron (ENE) $86.56
This is possibly the Berkshire Hathaway of petroleum stocks, with interests in high tech as well as the oil patch. The stock appears to be starting yet another upward leg.

Halliburton(HAL) $49.06
We wanted to add an oil service stock to join Santa Fe (SDC) and expected to go for Schlumberger(SLB), a company and a chart that we love. But we find ourselves loving the chart for HAL even more.

Current Recommendations:
(Entry Date, Entry Price, Last Close, Code, Name)

Stocks marked # are eligible for Canadian RSP funds. Otherwise there is a 20pc restriction on foreign stocks held in these accounts.

99/05/12 39.75 44.63 ADI Analog Devices
99/04/06 49.00 81.50 AMCC Applied Micro Circuits
99/08/06 78.50 76.44 AMGN Amgen Co
99/06/14 30.63 30.63 AOG Alberta Energy Corp #
99/06/14 38.28 44.92 APA Apache
99/04/06 92.13 104.39 ASCND Ascend Communications
(acquired by Lucent 1.65 shares to 1)
99/06/14 109.78 117.63 BPA BP Amoco Plc
99/05/12 94.38 109.00 BRCM Broadcom
99/08/06 26.38 25.88 CHIR Chiron Co
99/05/14 40.69 42.44 CLS Celestica #
99/05/12 117.50 62.25 CSCO Cisco (split on 99/06/21 2:1)
99/06/14 14.59 18.41 CXY Canadian Occidental Petroleum #
SELL 99/05/12 46.91 40.34 DEO Diageo Plc
99/05/12 54.61 57.98 EDS Electronic Data System
99/04/06 132.13 60.00 EMC EMC (split on 99/05/28 2:1)
99/06/14 31.13 30.63 ERICY Erickson
99/04/06 51.50 46.94 FLEX Flextronics
99/06/14 60.14 69.33 GLW Corning
99/05/14 84.52 110.67 HWP Hewlett-Packard
99/05/12 220.77 123.25 IBM IBM (split on 99/05/26 2:1)
99/05/14 58.13 103.25 IDPH Idec Pharma
99/04/06 60.83 59.67 LLTC Linear Tech Corp
99/04/06 32.75 53.88 LSI LSI Logic
99/05/12 25.06 24.06 NOVL Novell
99/04/06 163.19 81.69 NOK Nokia (split on 99/04/09 2:1)
99/04/06 65.66 81.98 NT Nortel Networks #
99/06/14 93.56 94.94 PHG Phillips Electronics
99/05/12 106.06 80.56 PMC PMC Sierra (split on 99/05/14)
99/05/12 49.88 65.06 QLTI QTLI Phototherapeutics #
99/06/14 21.39 22.55 SDC Santa Fe International
99/06/14 35.97 35.59 SFA Scientific Atlanta
99/04/06 53.75 66.13 SLR Solectron
99/04/06 130.94 70.50 SUNW Sun Microsystems (split on 99/04/08 2:1)
99/08/06 31.00 31.44 TLM Talisman Energy Inc
99/04/06 109.48 142.41 TXN Texas Instruments
99/05/12 87.19 95.20 TYC Tyco

In addition we recommend the following Closed End Funds, based on the assumption that Third World economic downturns are not going to last forever and that their stocks are now showing superb technical strength

SELL 99/05/12 9.89 10.51 CHN China Fund
99/04/06 6.63 9.25 FAK Fidelity Adv Korea
99/04/06 8.88 11.19 IFN India Fund
99/04/06 8.05 9.86 JOF Japan OTC Equity Fund
99/04/06 11.00 13.75 KF Korea Fund

Stockscom