December 20, 1999

We apply, in an ongoing process, our Selector Methodology to value and growth proxies - the BARRA value and growth indices -- to estimate the likelihood of value stocks in the S&P 1500 outperforming growth stocks in the S&P 1500, and vice versa. Looking forward to next quarter, our methodology estimates the probability of value outperforming growth is 45.2%. The investment implication of our probability estimates is fairly clear: Increase portfolio exposure to growth stocks for the first quarter of the new millennium. During the four quarters of 2000, our estimates suggest there will be alternating leadership between growth and value. These results point to an uncertain relative performance. However, we believe the outcome will become more clear when we know Chairman Greenspans true interest rate intentions.

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