Year-End Review 2003

From the Desk of Ron Rowland

The capital market is not monolithic. Over the course of an economic or market cycle, various sectors and industries come into and fall out of favor. Although the direction and movement of the overall market can have a significant impact on the performance of individual sectors, most also exhibit some degree of independence. The lack of unison in these undercurrents is what market watchers call sector rotation. We will remind you of this over and over and over again. Take, for instance, technology stocks. The tech sector grew more than 50% in 1998 and more than 100% in 1999. However, that leading sector tumbled nearly 75% during the 2000-2002 period. But along came 2003, and tech rose above the fray to once again deliver a better than 50% return.

Relative strength in the capital markets is not limited to industry or sector groups, but applies to styles (big vs. small or growth vs. value), fixed income, and foreign vs. domestic markets as well. For example, style variations can be demonstrated by comparing the Russell 2000's return in 1998 of -3.4% versus the S&P 500's return of 28.6%. This trend did not persist. The small cap Russell 2000 index bested the big cap S&P 500 index in subsequent years, and 2003's comparison shows the Russell 2000 outperformed the S&P 500 by nearly 17%.

Returns in the capital market ebb and flow just like the real return on your home or vacation property. By the same token, individuals who invest in precious metals (bullion), old coins, rare art, baseball cards, classic automobiles, you name it, go through time periods when these assets are in favor (high demand) and other time periods when they are out of favor (low demand) whereby prices fluctuate accordingly.

Our goal over time is to continuously provide a dynamic view of the capital markets, rotating our holdings to what we see as the strongest areas and attempting to avoid the weak. We will stay dedicated to our proprietary models and always maintain strict control with disciplined buy and sell tactics. No matter what the market offers in 2004, we are enthusiastic about our prospects. Thank you for your continued support and confidence. Best Wishes to the New Year!

Deposits to Your Account

Please be advised the best way to obtain fast and efficient credit to your brokerage account is to make checks payable directly to the custodian. If you remit a check payable to CCAM, we are required to return the check to you and consequently, there is a delay in processing your deposit. Anytime you make a check payable to the custodian, you can either mail it directly to the custodian or mail it to us and we will deliver it to your custodian.

Investment Management of Your Account

Ron Rowland oversees direct management of how your assets are invested with CCAM. We have a unified strategy in place at all times on our various portfolios. Ron and his colleague, David James, are monitoring each security within the portfolios every day. All other team members of CCAM (and our affiliate All Star Fund Trader) are responsible for client service and day to day operation of the firm. You can be assured they will be delivering outstanding service and timely communication to you regarding our investment stance.

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