Wednesday, September 12, 2001

Thoughts - 9/12/01

Thoughts for Clients Sept. 12, 2001

We expect markets to be closed for a couple of days, perhaps until next week…A good thing.

There will probably be some selling when the markets do open, primarily from mutual fund redemptions. We don’t think this will continue, although it will take stocks lower for the time being.

We do not believe it would be wise to sell stocks at this time, even if there is a decline. If there should be some reason to accumulate cash in the near future it would be advisable to wait a few days in any event.

In the absence of further terrorist developments at this time (and it now appears that this was a one-time attack rather than a coordinated series of attacks) the economy should not be drastically affected overall. It is possible that consumer confidence will decline temporarily, but if nothing else develops, that decline should not be drastic. However, it is possible that a lethargy in consumer spending could result for a period of time which would precipitate the recession which continued consumer confidence has been delaying for the last few months.

Impacts on particular holdings:

Citigroup… Travelers Insurance, short term negative, long-term neutral

Technology, computers, telecommunications, probably benefit in longer term, neutral short term

Pharmaceuticals and medical technology, neutral to positive short term, positive long term.

Bottom line for us: Be calm, study, watch, wait, look for opportunities.