Quarterly Newsletter – June 2001

The markets, it would appear, have quieted down a bit – though recovery from the pounding of the last 15 months is proceeding slowly at best. The Federal Reserve has been cutting interest rates very aggressively – but without much effect thus far. The stark contrast between our method of patient and conservative investing as against the “performance chasers” of television or Wall Street remains very sharp. Diversification seemed so boring a couple years ago – now it seems wise and prudent. Many clients have expressed to us their appreciation for our refusal to get caught up in the dot com mania, and it pleases us to be appreciated.

We have been working on a new publicity packet for the firm, and we are enclosing it with this letter. It is intended as an introduction to our services, and also as a convenient place to for you to keep material we send you. We hope you will read the various tear sheets, as they provide a good summary of our method. Should you know anyone who might appreciate receiving one of these packets please let us know.

The Gramm-Leach-Bliley Act of 1999 requires financial advisors to develop and implement procedures dealing with any confidential information we may collect from our clients. Be assured that we maintain physical, electronic and procedural safeguards to protect any non-public personal information you have provided to us. With this letter we are sending you a copy of our Privacy Policy Statement. It is located in the left flap of the folder. Please read this notice to assure yourself that we are taking adequate steps to maintain the security of your personal nonpublic information that you have confided in us. As required by law, we will provide this notice to you annually in writing.

You will likely be receiving additional privacy statements from other entities, such as your bank, your brokerage firm, mutual fund custodians and similar institutions. Please take a few moments to read these privacy statements as well.

It is particularly important to note that the Gramm-Leach-Bliley Act requires you to proactively “opt out” to prevent the disclosure of nonpublic personal information sharing to nonaffiliated third parties if the policy of the institution is to disclose such information. In other words, if you do not specifically tell the firms who share information and with whom you have accounts that you do not want your information shared, you are effectively giving these firms permission to share your information. For example, when your bank sends you a privacy statement and you take no action, you may have just given them permission to send your nonpublic personal information to a nonaffiliated mortgage company to solicit your mortgage business. In summary, carefully read all privacy statements and take action as deemed necessary.

It is likely you have noticed that your Schwab statements have changed formats. If you have any problems reading them, have any questions regarding the Privacy Policy or have comments on the publicity piece please call us.

Jim and Dean