We have come up with new designations for our stock recommendations. The
first is B, meaning the stock is timely to buy, but the case for doing so
right here is not overwhelming. Either the stock may have got ahead of
itself and may be vulnerable to a retracement or else the stock has been
performing disappointingly but may simply be regrouping. Sun Microsystems is
a current example of a stock that has surged while Novell is one that we
think is merely regrouping. Stocks rated B+ are timely to buy now. Stocks
rated H are ones to hold, awaiting confirmation to buy more or to sell. S,
of course, means sell, and we expect to discuss the reasons for doing as we
have done for Qualcomm and Tyco.

Market Conditions

The close on Friday September 3 delivered a powerful breakout in the NASDAQ
chart. It is also significant that the weekly chart for the S&P 500 index
completed a powerful Lindahl buy signal at the rising 40 week moving
average. This is a very powerful signal that has a high probability of
follow-through. It is a given that price and moving averages converge from
time to time. This occurs either by price settling back after a surge, or by
the moving averages catching up with price after it has gone sideways for a
time. In practice, a combination of these two often occurs, as has been the
case over the past few months with S&P. Essentially, the broad market has
been going sideways since April, even as many of our selections have been
going up, and some of them more than doubling.

Our tentative interpretation of the market is that we have just come through
an early annual cycle low and that it will trend higher from here, possibly
until about January or February. Last Friday's action had some of the
characteristics of a near-term buying climax, with perhaps too many stocks
going up. We count only two decliners on Friday among the entire NASDAQ 100
list. This looks in the near term a bit like the equal and opposite of the
selling climaxes that have been occurring in recent weeks. So it will be
quite acceptable for stocks to settle back for a few days.

It looks likely that the S&P 500 will take a run at its all-time high quite
soon. In that case, stocks that have been strong already could easily add a
further 10 percent or so. Upon achieving the all-time high in S&P, if that
happens, there could be significant but not devastating retracement, as
occurred when NASDAQ made its double top in July.

Let's stop for a moment and consider the argument that the market is so
expensive that the only way it can go is down. When considering relative
values, you have to ask yourself which stocks are expensive, and also
whether there is truly such a high price level that the general market is
vulnerable to a major crash.

Some stocks in our view are very high-priced. Among these we include many of
the Warren Buffett stocks like Coca-Cola and Gillette. We think their time
in the sun may have passed for now, and that it may stay passed for some
considerable time to come. On the other hand, there are areas where we think
we see both fundamental value and a strong technical case for owning stocks.

In our view, those high tech companies that truly have a sweet spot in the
marketplace are likely to see their stock price keep on going higher still
as they grow into their apparently high valuations. Within this group there
is and will continue to be constant coming and going. You may note that we
do not currently recommend any pure telephone plays. In our view there is
too much competition and no pricing power. On the contrary, price-cutting is
likely to undermine profits, and this expectation is already reflected in
the market action for stocks like Telephone, MCI Worldcom and BCE.

Then there is an extraordinarily long list of stocks that have been severely
beaten up. Some people have been looking at the Advance/Decline Line and
saying that with so many stocks going down, how can the general market not
follow? Our answer is that many stocks in the broader market may be close to
the bottom of their own proprietary bear market. If we are right in that
assumption, then the current market leaders will simply go on surging
upward. All it will take is for the likes of Starbucks and General Motors to
stabilize.

It is worth noting that both the Dow Transports and the Dow Utilities have
settled back to significant long-term uptrend lines. from 1998 and 1997
respectively. In addition, the Transports have now retraced 50 percent of
their gain from the low last October. There none that we particularly want
to but from technical standpoint, though it may be worth keeping an eye on
such stocks as Union Pacific.

New Recommendations

We can't resist adding five stocks to our list that are acting outstandingly
well, and which overall strengthen our exposure to biotech:

Applied Materials (AMAT) $77.38, another IT stock that is acting really
strongly. It is a potential double within the next year.

Biogen(BGEN) $84.81. This stock looks like a perpetual motion machine. The
only way to buy it here is just to close your eyes and do it, buying just a
few in case you have to live through a retracement of 30 percent or so.

Biovail Corp(BVF) $57.44. This is one of the few Canadian interlisted stocks
that is going great guns like QLT, and perhaps even more so.

Genzyme(GENZ) $60.38. Great company, according to a story in Barron's, and
unlike many of their stories it is accompanied by great chart action.

JDS Uniphase(JDSU) $113.25. This company is said to have the lock on fiber
optics technology for data transmission. So it's the hottest company is the
hottest industry, with an apparently unstoppable price action that has just
finished a day or two or correction.


List of Current Stock Recommendations:

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

First bought Entry 9/3

5/11/99 Analog Devices (ADI) 39.75 53.56 B+
4/5/99 Applied Micro Circ (AMCC) 44.38 104.75 B+
6/11/99 Alberta Energy (AOG)# 30.50 30.56 B
8/5/99 Amgen(AMGN) 79.31 880.63 B+
6/11/99 Apache(APA) 38.44 45.19 B+
6/11/99 BP Amoco(BPA) 111.25 112.94 B
5/11/99 Broadcom Corp (BRCM) 92.69 130.56 B
6/11/99 Canadian OccidentalCXY)# 14.75 18.69 B+
5/13/99 Celestica (CLS)# 40.31 44.25 B+
8/5/99 Chiron(CHIR) 27.13 33.38 B+
5/11/99 Cisco Sys (CSCO) 55.94 70.94 B+
6/11/99 Corning Glass (GLW) 60.31 69.06 B+
5/11/99 Electronic Data Syst(EDS) 55.06 57.25 H
4/5/99 EMC (EMC) 66.59 62.88 B
8/8/99 Enron(ENE) 43.28 41.50 H
6/13/99 Erickson(ERICY) 31.19 33.25 B+
4/5/99 Flextronics (FLEXF) 52.69 63.13 B+
8/8/99 Halliburton(HAL) 49.00 46.00 B
5/13/99 Hewlett Packard (HWP) 85.00 109.59 B
5/11/99 IBM (IBM) 110.50 132.50 B
5/13/99 Idec Pharma (IDPH) 58.13 132.50 B
8/18/99 Intel(INTC) 78.44 89.31 B
4/5/99 Linear Tech Corp (LLTC) 55.56 69.06 B+
4/5/99 LSI Logic (LSI) 32.25 58.81 B+
4/5/99 Lucent Technology(LU) 52.92 66.00 B
(Bought Ascend, now merged into Lucent: 1.65 shares to 1)
4/5/99 Nokia (NOK) 79.50 87.63 B
4/5/99 Nortel (NT) # 31.72 42.56 B
5/11/99 Novell Inc. (NOVL) 25.06 23.94 H
6/11/99 Phillips Electronics 95.00 103.81 B+
5/11/99 PMC Sierra (PMCS) 53.48 97.00 B+
5/11/99 QLT Photothera(QLTIF)# 49.08 82.00 B+
8/18/99 Qualcomm(QCOM) 169.88 183.75 SELL
6/11/99 Santa Fe International(SDC) 21.50 25.19 B+
6/13/99 Scientific Atlantic(SFA) 34.94 53.44 B
4/5/99 Solectron (SLR) 49.63 76.50 B
8/18/99 Sony (SNE) 131.38 131.88 B+
4/5/99 Sun Microsystems (SUNW) 63.10 84.50 B
8/5/99 Talisman(TLM) 30.50 29.50 B+
4/5/99 Texas Instruments (TXN) 51.81 87.88 B
5/11/99 Tyco International (TYC) 87.25 99.75 SELL

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:

4/5/99 Fidelity Adv Korea (FAK) 6.50 9.25 B
4/5/99 India Fund (IFN) 9.38 11.50 B+
4/5/99 Japan OTC Equity Fund (JOF) 7.88 12.38 B+
4/5/99 Korea Fund (KF) 10.50 13.88 B