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The Volatility Opportunity Portfolio of Funds

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May 26, 1999 marked the first day of funding for the Volatility Opportunity Fund.

Click here for a sample of the fund's performance.

Among the companies included in this fund:
Yahoo, Infoseek, Lycos, Inktomi, CNET, AOL.com (includes Compuserve and Netscape), Prodigy Internet Services, CMGI Internet incubator, Amazon.com, Global Crossings' undersea & overland fiber network, Muriel Siebert Internet Stock Brokerage, Ross Perrot Systems, Intel, Northrop Grumman, Smith Kline, Merck, Pfizer, Donald J. Trump Hotel & Casinos, Campbell's Soup, Ralston Purina/Eveready Batteries, Sunoco

Until April, we had been liquidating stock positions. By mid-May, we had achieved our most liquid position since... since, we can remember. It appears inevitable that the most extreme volatility the financial markets have ever seen will continue. Adding fuel to this fire could be the appearance of a schizophrenic Fed. Although the Fed is concerned about inflationary pressures, they will be faced with an increasing liquidity crisis by year's end.

The stocks in the Volatility Opportunity Fund are meant to compliment our longer term portfolio, as well as, take advantage of near term income opportunities caused by this unprecedented volatility.

Our five favorite sectors for this fund are:

• internet/technology - a) it has already seen a 10-50% correction, and b) it is likely to prosper on the other side of y2k
• drugs - they have already seen an 18% correction and are usually seen as a economic safe haven
• defense/communications - besides NATO dropping $60 million/day in bombs, the US continues to bomb Iraq, the Chinese and Russians are mad, Pakistan and India are feuding. The other interesting aspect of this group are the "communications, satellite and internet possibilities" of companies, such as, Lockheed Martin and Hughes.
• real estate - real assets are usually viewed as safe place to maintain value in uncertain times. Hotel & casino stocks are of particular interest.
• y2k related - though this isn't really a sector, it is a criteria for picking stocks. Campbell's Soup is a good example of a y2k play.

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