The first eight weeks of 2003 continued the three-year trend of rewarding those investors who look outside the box and avoid following the consensus. Our strategy going into the new year was to upgrade the quality of our portfolio by accumulating those high-quality leaders that are now trading at historically low valuations. We did the same thing three years ago by focusing on Procter & Gamble, 3M and Johnson & Johnson at a time when most other investors were mesmerized with technology and telecom. At that time, these quality leaders were hitting new lows very similar to what our current favorites of Honeywell International, Kimberly Clark and this week’s new recommendation, Kraft Foods, are presently experiencing. The other part of our strategy into 2003 included buying select, smaller-cap speculative issues that we felt offered tremendous upside due to Wall Street’s huge overreaction to negative news.
