Thomas A. Rogers, CIM, FCSI
Investment Advisor
416-463-6880

Thomas A. Rogers, CIM, FCSI
Investment Advisor
416-463-6880

July 10, 1996

TO ALL INVESTORS

Gentle People,

I am enclosing a new edition of THE CANADIAN BUY LIST and THE UNITED STATES BUY LIST.

In my recent letters of April 2nd and December 5, I have been outlining a scenario of an unfolding corrective phase for the financial markets to be followed by a final bull market rally to the top for stocks and a strong rebound in the bonds, but not to new highs for them.

The bond market has endured a substantial decline from the peak for the US Long bond of $120.50 in January to a recent low of $105.20. That may prove to be an interim low for now. Whether or not it is, I do not believe it will be more than a week or so from this writing that a significant rally in the bonds will unfold.

What has transpired in the stock market is a little more complex. The market indices such as the Dow Jones Industrials and the Standard and Poor's 500 achieved recent highs toward the end of May; and, since we're not too far away from there one wants to ask - So where's the correction ??

Well, with a random glance through the chart books you will be struck by the very large number of stocks that topped out in late February and early March and have undergone substantial declines since then. You will also notice another large number that have essentially being going sideways, at best, during the period. In fact, 35% of the S&P 500 sub groups actually declined from the end of March to the end of June ! In your perusal you would also discover an additional significant number that have already made lows and appear to have begun to trend upwards.
All of this is descriptive of a prolonged "internally rotating" correction which has been going on under the "cover" of the market indices. A concluding phase (which may be taking place now) very often occurs in which the correction takes on a more 'visual' aspect with the market indexes themselves experiencing a meaningful correction too. This final act puts the market back on equal footing, as it were, and clears the way for the next major advance.

In summary, I expect the correction in the bonds and stocks to conclude within the next two weeks and that positions may be taken in both areas when the price is right!

Yours Sincerely, Thomas A. Rogers, CIM, FCSI Investment Advisor 416-463-6880

New York Stock Market since this strategy letter of July 10, 1996.          as depicted by performance of an S & P 500 Index Fund

April 2, 1996

TO ALL INVESTORS

Gentle People,

I am enclosing a new edition of THE CANADIAN BUY LIST an THE UNITED STATES BUY LIST.

In my letter to you of Dec 5, I was anticipating some corrective action in the stock market particularly in over extended sectors and that we would experience a general decline in the bond market.

This certainly has occurred in the bond arena with the US long term bond dropping $10.00 from $120.75 to $110.50 and retracing about one half of its gain from November of 1994.

Stocks consolidated for about six weeks an then staged another advance into mid February whereupon they have entered into a period of extremely volatile sideways consolidation. During this period the Standard and Poor's 500 Index has advanced 5.88% and my US selections have advanced 6.42% on average. The best performer on my US list was Baker Hughes Inc. with a gain of 32.6%. It was, incidentally the highest rated stock under my rating system with a 'Rating Blend' of 3.8 out of the possible 5. (I will be pleased to contrast its price behaviour with that of the worst performer which happened to have the second lowest 'Rating Blend' .)

My outlook until the next writing in early August is for a possible further quick dip in the bonds prior to a recovery rally (but not to new highs) and for stocks to consolidate further or dip with the bonds and then join in on the upside again. It is quite possible for stocks to move on to new highs throughout the summer months.

I believe it is best to focus on individual issues with sound fundamentals and which are not over extended in price appreciation. I prefer stocks which have undergone and 'digested' a decline/correction and, that have worthwhile reasons for further renewed upside progress.

Yours Sincerely, Thomas A. Rogers, CIM, FCSI Investment Advisor 416-463-6880

New York Stock Market since this strategy letter of April 2, 1996.          as depicted by performance of an S & P 500 Index Fund

Dec 5, 1995

TO ALL INVESTORS

Gentle People,

I am enclosing a new edition of THE CANADIAN BUY LIST and THE UNITED STATES BUY LIST.

As we are all quite aware the US Stock and Bond Markets have been on a 'roll' since the end of October providing a dramatic extension of the strong bull move which commenced last December.

There was a consolidating sideways period during July through October to correct the excess of the initial rally. We have once again built up excess in a number of sectors which have had an impact on the stock market indices causing them to reach widely advertised new highs. I expect these particular excesses will be corrected out very shortly. This will cause some uncertainty and provide an entry opportunity to accumulate issues in emerging areas because .....

1) It appears the US and other significant economies are slowing.
2) There is a presidential election in 1996.
3) There is no impediment from inflation. Accordingly, there is no political or economic reason to tolerate a recession or continue with high interest rates in real terms any longer.

I expect the US will cut its short term interest rates meaningfully beginning this month or next month at the very latest. I also expect a stimulative expansion of the US money supply will be undertaken to offset the 'fiscal drag' caused by budget balancing efforts. The result will be an overt effort to ward off a recession and induce the economy into renewed expansion.

However, at the same time, this recession averting preventative medicine will plant the seeds of the next inflation and the 'long end' (bonds maturing 10 or more years from now) of the bond market will become quite concerned causing price weakness and a general bond market decline.

The stock market, after adjusting for the excessive sector advances mentioned above, will witness a new upside price move with the broader participation of more traditional basic industrial stocks.

For the most part the selections chosen on THE BUY LISTS do not belong to 'excessively' advanced sectors, but rather, to the contrary, represent participants from groups that have already undergone significant corrections and are showing signs of re-emerging strength. They are gaining recognition as probable leading sectors in the next major advance.

Accordingly I recommend profits be taken in advanced sectors and selective accumulation begin of issues I have identified for you.

Yours Sincerely. Thomas A. Rogers, CIM, FCSI Investment Advisor 416-463-6880

New York Stock Market since this strategy letter of Dec 5, 1995.          as depicted by performance of an S & P 500 Index Fund

July 13, 1995

TO ALL INVESTORS

Gentle People,

As we are all well aware, both the Bond and Stock markets have rallied strongly since last year.

The Toronto Stock Exchange Industrial Index has, since June, put on an additional surge which has been driven largely by the mining sector including the golds.

If we are to have a long overdue correction to the advance before a broadly participating re-launch, I believe it will be in the nature of a price/earnings multiple contraction to discount the pick up in inflation usually associated with the 'Boom Phase of the business cycle.

Therefore, at the conclusion of such a correction, I expect an additional major advance to the Bull Phase of the Stock Market Cycle which will discount peak earnings yet to come.

I do not expect the Bond Market to participate in such renewed strength. I expect its advance for this cycle is essentially over.

I will produce a US Buy list in due course when the market has adjusted its current over-extension. In the meantime I thought you would be interested in the outcome of my selections of last October as recommended for purchase on December 20th to a multi-portfolio account.

You will note that a majority of the issues achieved their highs well in advance of the present date, suggesting that some corrective action is already taking place under cover of the popular market indexes.

Thomas A. Rogers Investment Advisor 416-463-6880

New York Stock Market since this strategy letter of July 13, 1995.          as depicted by performance of an S & P 500 Index Fund

October 26, 1994

TO ALL INVESTORS

Gentle People,

In my view, the US Bond Market is about at its low. It may be achieved today, or else within the next few days.

I believe the Canadian Bond Market is making a successful test of the lows it achieved this summer. I do not believe those summer lows will be penetrated.

Your bond position should by now be 'in place' ready to exploit the coming rally. As to the Stock Markets, I believe they are quite vulnerable to further decline over the next few weeks. Such action would complete the full correction which began last January.

The commencement of the next major advance lasting for several months should begin in the mid November to early December period.

This is my opinion at this time...

Thomas A. Rogers Investment Advisor 416-463-6880

New York Stock Market since this strategy letter of Oct 26, 1994.          as depicted by performance of an S & P 500 Index Fund

August 10, 1998

TO ALL INVESTORS

Gentle Persons,

In my covering letter to you of March 10, I contended a pull back would unfold shortly to provide an opportunity for accumulation. The corrective move actually began on April 13th. During June into mid July, there was a false narrow rally with little participation by the vast majority of common stocks. At this writing we are attaining new lows for the correction.

Since October there have been two major downswings spaced by a recovery rally in which a significant number stocks particularly from the resource sector did not participate to any sustainable extent notwithstanding the market ‘indices' attained new highs.

"The average New York Stock Exchange stock is down 25% from its 52 week high. We normally define a ‘bear market' as a 20% correction. This means there's a bear market in progress. I think the real question is: Is it over or is it going to continue?" (Gail Dudack, Warburg Dillon Read - CNN Moneyline Aug 5). "Usually when you have a big down draft in the famous widely held stocks, it pulls everything else down with it even though the other group has already corrected. I hope this time it'll just be in the S&P 500 -that 50 stocks that make the market there and the top Dow stocks- and not pull down stocks that have already dropped 25% or more." (Robert Stovall, Stovall 21st Advisors - CNN Moneyline Aug 5).

These two comments by a top technician and money manager sum up the situation rather well. The point being made is that the market in general has corrected massively since rally going into the October high and once the ‘Indexes' complete their capitulation we will have a valid entry point. I have enclosed fresh Buy Lists in contemplation of this..

Yours Sincerely, Thomas A. Rogers, CIM, FCSI Investment Advisor 416-463-6880

New York Stock Market since this strategy letter of Aug 10, 1998.          as depicted by performance of an S & P 500 Index Fund

January 4, 1999

TO ALL INVESTORS

Gentle Persons,

I am very pleased to write you from my new home at Essex Capital Management Limited. My new associates have been most co-operative and helpful in the transferring of accounts and assisting me in my assimilation to new surroundings.

I am also pleased to enclose a copy of the Essex Winter Outlook* which features a learned article on the advent of the new Euro and some thoughts of my own on the importance of understanding each individual’s preferred investment style.

I will be preparing a US and Canadian Buy List in due course when the narrowly led excessive advance in the US markets under go a meaningful correction. A close look will reveal the move since October has been concentrated on leaders in the Computer Field and a few well-known Blue Chips, along with a speculative mania in the Internet Stocks. For the broad list, the rally has been particularly unconvincing.

To demonstrate the lack of response in the Canadian Market on the reverse side of this letter I have printed charts of several of our industry indices. Notice that none have recovered even close to their July highs. Most finished their rally in early November and nearly all stand vulnerable to a correction of any worth in New York. So, short term there is a call for caution. After the correction a major legitimate buy juncture may very well be presented for us to take advantage of.

I have also included charts of the US Long Term Bond which shows some hesitation after its spike top in October. I believe early concern regarding long term interest rates should be recognized too.

Thanks very much to all who are continuing their association with me. I am sure we will have a very successful investment experience with the fine facilities now available to me here at Essex Capital Management.

Thomas A. Rogers, CIM, FCSI*    Investment Advisor    416-463-6880 * Canadian Investment Manager     Fellow, Canadian Securities Institute

New York Stock Market since this strategy letter of Jan 4, 1999.          as depicted by performance of an S & P 500 Index Fund

February 22, 1999

TO ALL INVESTORS

Gentle Persons,

Perhaps a little pre-maturely, but so you may be "at the ready" as you consider adding to your equity component in your portfolios, I am enclosing a new CANADIAN and US BUY LIST.

On the back of the Canadian Buy List you will find a graphical portrayal of the market dynamic at this writing.

The Advance Decline Line (red) for the New York Stock Exchange has broken below its low of last October. (The A/D Line is a cumulative measure of the number of stocks advancing and declining each day. The Line declines when there are more stocks declining than advancing on most days as has been the case since early October.) The A/D Line is often regarded as a proxy for the behavior of the ‘broad list’ or the average stock. In this sense it portrays what the real market is doing apart from what you see the well known stock market indices doing, such as the Dow Jones Industrials or the Standard & Poor 500 Index (blue).

In the graph you will note the Standard & Poor Index is well above its October low, and indeed above its July high too! This is a ‘dramatic divergence’ from the Advance Decline Line’s making of brand new lows. These divergences, when they occur are invariably resolved either by the broad list reaching downside exhaustion and subsequently turning up with a ‘vengeance’. Or, the major indices break to the downside, often in dramatic fashion to come into line with the already depressed broad list of stocks (as typified by the A/D Line). At this moment I expect this second possibility will occur and very shortly too.

My counsel is to keep defensive until the break occurs. When it does we will be presented with an excellent buying opportunity. In the meantime I’ll be pleased to assist you in selecting your preferred candidates for purchase from the enclosed lists, or otherwise.

Thomas A. Rogers, CIM, FCSI*    Investment Advisor    416-463-6880 * Canadian Investment Manager     Fellow, Canadian Securities Institute

New York Stock Market since this strategy letter of Feb 22, 1999.          as depicted by performance of the Standard & Poor 500 Index

June 9, 1999

TO ALL INVESTORS

My Thanks: My I begin by saying how very thankful I am by your affirmation to me when I was so suddenly forced to relocate. Your cooperation and understanding has been very deeply appreciated and I hope I may respond with a refreshed dedication to your investment needs in a most sincere fashion.

The Stock Market: Beginning in March and continuing through April we have had a strong recovery in the energy sector in particular and a general lifting of the Toronto Market out of its lethargic state after a year of strength erosion terminated with the exhaustion of last October. Notwithstanding the extremely narrow run up in the major New York Market Indices in the months since, the majority or broad base of stocks in the US and Canada have just now (in the last two months) shown signs of re-emergent strength. Quite aside from the market indices which have been on their separate 'solo flight', the broad (read, real) market is just now coming out of a prolonged 'bear phase'. At this time the indices are correcting out their excess in preparation for a 'valid broadly based bull phase' for the 'real market'. We should now look to strengthening our equity positions through the purchase of common shares within the coming weeks.

The Bond Market: Since spiking into a blow off last September, the US Bond Market has been in a 'Bear Phase' with the long bond yield rising from 4.7% to a recent 5.9% and the bond price declining accordingly. This I believe to be a reflection of continued economic strength in the US and early signs of a recovery in the Far East, and, faith in the strengthening of European economies not to mention the ultimate end to the Japanese depression visible to many seers. I anticipate we will be able to recommence our very successful long term coupon investing exercise before the year is out.

Buy Lists - New Feature: I have updated my buy list for the Canadian Market and hope to get a US update out to you very shortly. You will notice a new appraisal column which I have called 'Stock Style' to differentiate for you the character of the security being recommended as to its suitability to your own investment style and risk profile. I have elaborated somewhat on these styles on the reverse of the buy list. You may gain a fuller understanding of differences in styles by accessing my WEB Site at:

www.interlog.com/~rogersta/variety.htm

Thomas A. Rogers, CIM, FCSI*    Investment Advisor    416-463-6880 * Canadian Investment Manager     Fellow, Canadian Securities Institute

New York Stock Market since this strategy letter of June 9, 1999.          as depicted by performance of the Standard & Poor 500 Index

November 16, 1999

TO ALL INVESTORS

The Stock Market: In my last written market advisory of June 9, I felt the broad market that had not participated to any meaningful extent (energy stocks excepted) despite the very strong run up in the blue chip US indices, was about to broaden out and suggested some positioning be done. From a July peak, we have weathered a reasonable correction into October. This broke the New York ‘Advance Decline Line' into a resumption of its downtrend -- which actually began in early 1998 !

The Advance Decline Line, as you've heard me refer to it before, is a reasonably good proxy for the broad base of stocks which sometimes head off in a different direction than the ‘Blue Chip' Averages. On the reverse of this letter I have reproduced a picture of this departure. It's often referred to as the troops in full retreat while the generals proceed to bravely advance. It is then argued that the Generals are very exposed without the support of the troops and are destined to beat their own inevitable retreat; and, -- most often a very hasty and dramatic one at that.

The counter point that I have observed to happen on a few occasions is that the ‘Internal Market' (as represented by the A/D Line -the troops) gets so extended on the down side and has declined for such a prolonged period that it reaches the stage of its own termination. A silent emotive scream rings out.... "Hey you guys! The Generals are up there! Let's get going!! ... and the internal market turns up with a vengeance pushing the ecstatic generals on to a brave new advance. Indeed, as the A/D Line is proceeding to new lows many of the sector indices hold steadfast above their prior low indicating a transition to a new bull phase is actually well under way. To see this, please refer to the sub-index comparisons on back of the enclosed "Canadian Buy List".

Since we are moving out of the seasonal September / October weakness and since the Japanese and Far East economies are into secure recovery and the European economies are on stream as well, I believe the two year ‘internal weakness' or ‘Stealth Bear Market' is virtually concluded. Indeed, for many indices the actual Bear Market low was in October 1998 and a full correction holding above those lows is probably now complete. While some indices have gone below the ‘98 lows, their Bear phase is reaching a nadir now; as, I believe, is the case with the Advance Decline Line. I expect some natural correction to the ‘index rally' that began in mid October to unfold over the next few weeks after which we'll kick off the A/D Line Reversal in fine style with a Santa Claus Rally and continue with full blown strength into the New Millennium when Y2k will be history.

The Bond Market:The 30 year US Treasury is still with in a severe down trend. Since October 25 there has been a minor counter trend rally up to resistance at its declining moving average line. With the jump in the price of oil, I believe this rally is now complete and the bond market decline will continue - probably down to its first meaningful support area at $106 and 1/4 - about $8 lower from here. Possibly at that level we might consider positioning some long dated coupons for a trading rally.

Thomas A. Rogers,    CIM, FCSI, CFP*    Investment Advisor    416-463-6880 * Canadian Investment Manager     Fellow, Canadian Securities Institute     Certified Financial Planner

New York Stock Market since this strategy letter of Nov. 16, 1999.          as depicted by performance of the Standard & Poor 500 Index