September 2, 1999

At Suncoast Equity Management (SEM), we believe that achieving successful investment results requires a long-term horizon and a sound investment discipline and methodology. To realize the long-term rewards investors must often be willing to look beyond short-term periods of volatility.

In today's world technological advancements cause the dissemination of information to be much faster than in the past. As the financial news media emphasizes each succeeding piece of financial data and each change in interest rates the reaction of the markets can be more volatile than we might like.

For example, on August 24th the media buildup before the Fed policy makers' meeting was akin to the Super Bowl hype. The Wall Street Journal went so far as to prepare a "Fed Pregame Report" complete with a grid attempting to predict how the stock market would react to the policy makers' options.

Rather than spending valuable time trying to predict interest rate movements, we believe it is more meaningful to try to understand the effect that Internet economics will have on business. With that in mind, we have added three new businesses to the portfolio that reflect our beliefs about this powerful economic force.

At SEM, we believe strongly in the value of owning good quality stocks (businesses) for the long-term. The Suncoast Equity Management Disciplined Investment System (SEM-DIS), our proprietary stock selection and portfolio management system, forces us to invest for the long term in outstanding businesses that have strong balance sheets, earn above average returns on capital and generate large amounts of free cash flow.

Despite a volatile 1999, SEM client performance through August 31st has been favorable. SEM portfolios have earned 10.89% (net of all fees) versus 8.28% for the S&P 500 and 7.89% for the Lipper Growth Fund Average.

If you or someone you know would like to learn more about how our SEM-DIS could work for you or them, please call anytime or send me a note from our web site.

Thank you for your continued interest.

Sincerely,

Donald R. Jowdy
President