AXXel Knutson Update of the “Strong Buy” Issued Post Sept 11

(PRWEB) November 1, 2001

October 29, 2001

An Update of the 10.1.01 Newsletter

Using, AXXel Knutson’s

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The Most Important Buy Point Since August, 1981 [10.1.01 & 10.20.01 BBC “World Service”

Update: 10.19.01 No change.

Update: 10.29.01 No change. We expect some weakness in the Nasdaq Composite [1750] and in the Dow [9510]. We are seeing the market broaden out, note the recent strength in the Value Line Arithmetic Index [VLE-1113]. To the upside, oils, natural gas, gold and other precious metals including palladium [see North American Palladium -PAL-5.23]. Intel [INTC-24.18] cutting prices over the weekend zapped the semis.

“In August of 1981 with the Dow at 888 it was a market environment of doom and gloom.

Someone named Granville was predicting a Dow 375 and nowhere was anyone looking for an up move…well, almost no one. Now 2001: The Dow clunked 685 points on September 17 the first day of resumed trading, 17 more on 9/18 and 144 to the downside on 9/19. During this drop the Fed poured money into the system with $ 11.7 billion in loans to banks for the week ending 9/12 setting records for liquidity increases by the Fed. On the 14th the Fed stepped up to the plate and bought $ 80 billion in Treasuries and mortgage-backed securities and those of U.S. Agency. Add to this the Fed entered into a $ 50 billion arrangement with the European Central Bank. In effect the cost of overnight borrowing is down to almost nothing…make that 1%! All of this is inflationary in the intermediate term as government spends money for defense [no bang for that buck vs. investment in private industry related to efficiency]. Rates on 10 Year bonds have already started a move up in anticipation of increasing long-term interest rates. But given the dramatic growth of the 90′s the economy can afford this shift as long as it does not become permanent.

A recession is commonly defined as two consecutive quarters of declining GDP and we are likely to see that take place in the second half of 2001 even though the revised GDP numbers for the April-June period were revised upward to a growth rate of 0.3% from the reported 0.2%, hardly a reason to jump for joy. Business investment off the cliff at an un-revised negative 14.6% rate on the heels of the negative 0.2% crunch of Q1 and that represented a decline of 1.99 percentage points in the overall GDP numbers. Inventories continued their shrinkage and posted the largest drop since 1983. Consumer spending rose at the un-revised 2.3% rate-that will most certainly tank in the second quarter and is in part, the reason for the decline in stock prices in the previous week. Imports to the USA dropped 8.4% and that is an upward revision from the previously reported 7.7%

The rate of inflation as measured by the price index for personal consumption rose at 1.3% a slight revision downward. The first quarter was + 3.2%. We have cut rates 8 times this year…look for number nine in October. So we have benign inflation, consumers resisting the need to use plastic and all manner of negative news, war, pestilence, a measurable drop in stock prices on high volume…and we have raised out market signal to “Strong Buy.” This is as important a buy point for U.S. and FTSE shares as we have seen since 1981. We were right then…I think we will be right again.

We can expect that Defense will gain about $ 70 billion over the most recent budget + $ 17 ½ billion for airlines and $ 20 billion for New York City. Nevertheless, in the short-term in a recession [let's call it what it is] fiscal stimulus is just the ticket at the moment. And now, in 2001 with the Dow not only having seen Dow 3,000 but Dow 11,500+ we can now suggest our long-term objective of Dow 25,000 is still very much a target. On the BBC “World Service” upon which I regularly comment, I moved my market stance from “Accumulate” to “Strong Buy” a week ago Friday, September 21st at about 8300 for the Dow and 1480 on Nasdaq Comp and just under the important break point of 1000 for the S & P 500. With the exception of the Monday following that week, the market has held together and advanced. We think that will likely continue. Here is the 1981 AXXel forecast-See the button below:

Button produced by AXXel Knutson, CEO of The Capital Defense Group in 1981 with the Dow at 888

Not since the malaise of the late 70′s and early 80′s have I seen a buy signal this strong. We have everything in place for that signal…measurable disbelief in our economy’s ability to provide growth and jobs, the biggest weekly decline in the Dow since 1933 off 14.3% to 8,236, a recession in this the third quarter of about -0.5% and -0.7% for Q$ -2001. Significant and sustained negative price movement in stocks and dramatic increase in volume-all to the downside, novice investors looking for shorts and puts-look at the VIK index-and horrible news both economic and otherwise. The only thing lacking for a better signal would be if my secretary, Bubbles LaRue quit because she couldn’t afford the repairs on her broken down Rolls [actually, Rolls never "break down." There are TIMES when they "fail to proceed."]. The Brits have the marketing down on the Rolls don’t they? Fail to proceed, indeed. This market “failed to proceed.”

Nasdaq Composite chart courtesy of http://www.clearstation.com

We are now going to look at the groups, quickly.”

AEROSPACE AND DEFENSE

Lockheed Martin [LMT-43.30] Strong Buy. The recent $ 46 high looks easy. Is 60 easy? Probably. Update 10.19.01 $ 47.05 retraced to $ 45-no change. Update: 10.29.01: $ 52.50. Sell. We have the news…what more do we want? We will likely come back.

General Dynamics [GD-87] and triple digits the target. Stronger than LMT. Update 10.19.01 $ 82.40 interesting break to the $ 79+ range. Strong Buy. Update: 10.29.01: $ 86.50 still in the base. Accumulate.

Northrop Grumman [NOC-100.45] the top choice in the group. Strong Buy. With the base at $ 80, it is unlikely to test that range. Large supplier of radars, and the U.S. Air Force’s new F-22 Raptor fighter, the unmanned Global Hawk and the new DD-21 destroyer for the Navy. Update 10.19.01 $ 104.80 – holding well and a buy point could be the break of $ 100 if it occurs. Update: 10.29.01: $ 103.45, let’s exit for the moment. Would like to buy sub $ 90.

Raytheon [RTN-33.95] the producer of Tomahawk cruise missiles and its radars cruise along with F-14, F-15, F/A-18′s and the B-2. Add also the F-117 stealth fighter and the U-2. Strong Buy. Update 10.19.01 $ 35.65 minor break as well and that appears over. Update: 10.29.01: $ 33.85 we can exit here as well. New buy point is a break of $ 30.

Alliant Techsystems [ATK-83.75] is the producer of size of solid=propellant rocket motors and bullets. Call these consumables. The base is $ 70. Strong buy right here. Update 10.19.01 $ 85.62 here the break took it to about $ 83. No change in opinion. Update: 10.29.01: $ 88.67 we are going to sell to re-buy the break of $ 75. Maybe it happens, maybe it doesn’t.

Drs Technologies [DRS-34.80] Here is the news PARSIPPANY, N.J. -(Dow Jones)- DRS Technologies Inc. (DRS) received a $ 3.8 million contract from the U.S. Army to provide infrared thermal imaging systems for Abrams M1A2 battle tanks. In a press release Wednesday, DRS said its Second Generation Forward Looking Infrared system will be part of the system enhancement software on the Abrams M1A2, the Army’s fully digital ground combat vehicle. The defense technology company said the system provides day and night

vision capabilities enhancing surveillance ranges, “increasing target acquisitions and significantly reducing fratricide.” The base $ 20 then $ 25-28. The recent high about $ 40. The buy point here and on any break of $ 30. Update 10.19.01 $ 37.63 a strong break but that appears finished. There was no break of $ 30, but $ 32 is close enough. Strong Buy. Update: 10.29.01: $ 39.00 we shall exit for the same reason as ATK above. To re-purchase sub $ 30.

Engineered Support Systems [EASI-46.05] Engineered Support Systems, Inc. engineers and manufacturers a wide range of electronics and military support equipment for various branches of the U.S. military and commercial customers. The base is 35-40 and the lift off is impressive. One can trade it from here and accumulate size sub $ 40. This tells the story here: “ST. LOUIS, Sep 24, 2001 /PRNewswire via COMTEX/ — Engineered Support Systems, Inc. (Nasdaq: EASI) has received an order totaling $ 5.8 million for production of its Chemical Biological Protected Shelter (CBPS) system under an existing contract with the U.S. Army. This order includes funding of certain engineering change proposals (ECPs) on the 113 units currently in production plus the exercise of an option for the production of an additional 10 CBPS units, according to Michael F. Shanahan, Sr., Chairman and CEO. Update 10.19.01 $ 46.25 no break of the forth number, but it now looks as if this is as good as we can do in terms of purchase…so purchase. Update: 10.29.01: $ 49.27 no change.

Hi-Shear Technology [HSR-2.30] on a watch list only. Here is why: from a recent news release: “Hi-Shear’s electronic firing product revenues for the Patriot Advanced Capability (PAC-3) anti-missile program doubled during fiscal year 2001 reflecting the significant upgrades that the United States Army is making to its National Missile Defense program. The PAC-3 anti-missile is a surface to air missile, which offers increased range and accuracy as compared to current missile systems. This missile program is scheduled to expand rapidly from low rate production to full production over the next several years dependent on

defense department appropriations. Hi-Shear’s participation is the result of its ongoing investment to provide an array of the most advanced missile firing systems. Update 10.19.01 $ 3.70 more than a worthy trade. Accumulate sub $ 3.50. Doubtful to see a break of three. Update: 10.29.01: $ 2.70 we have the break of $ 3.00 and we are looking for the break of $ 2.00 for an opinion change from “accumulate” to “buy.”

Allied Research [ALR-15.60] and off the stable base at $ 9.00. the buy point is sub ten and useful for traders only until then. Here is why: “DJS Allied Research Gets $ 17 Million In Ammunition/Components Orders VIENNA, Va. -(Dow Jones)- Allied Research Corp.’s (ALR) defense unit, Mecar S.A., received $ 17 million in new orders from several unidentified customers for ammunition and components. In a press release Tuesday, the defense and commercial electronic security company said the orders call for various types of large caliber ammunition and components ranging from 105mm to 155mm systems.” [Source: Dow Jones]. Update 10.19.01 $ 13.90 we are not at a break of ten and it is unlikely to go there. But it can break from here and that IS the buy point. Update: 10.29.01: $ 16.10 a nice move off the correction from $ 13, but we shall exit to re-purchase sub $ 12.00.

Esco Technologies. Inc. New Comment [ESE-26.65] a terrific double bottom at the sub $ 23 level. Very nice track record and management positive statements about the quarter moved the stock from sub $ 23 to the current number. We would prefer to accumulate under $ 25. Here are the quarterly numbers. ESE is a supplier of engineered filtration products to the process, health care and transportation markets.    For the 9 months ended 6/30/01, net sales rose 20% to $ 257.6M. Net income rose 4% to $ 12.8M. Revenues reflect growth in all three business segments and an acquisition. Higher income was partially offset

by higher SG&A expenses. Update: 10.29.01: $ 27.68 sell to re-purchase sub $ 23.

Oshkosh Truck Corp. [OTRKB-33.75] we like this company without military trucks. But with it? A buy. OTRKB engineers, manufactures, and markets a broad range of fire & emergency apparatus and specialty commercial and military trucks under the OshKosh, Pierce, McNeilus and MTM trademarks. Strong Buy. Update 10.19.01 $ 39.15 no change and unlikely to test under $ 35. Update: 10.29.01: $ 37.56 no change. In the base. Get it.

Simula, Inc. [SMU-5.85] in process of blowing out through the room from the $ 2.00 base. We have no interest here preferring to see how high it goes before we see the likely crash pattern but we will likely buy that crash pattern and that is suspected to be about the sub $ 3.50 level Update: 10.29.01: $ 6.25 too spiky for me. Sell to re-buy sub $ 3.50.

Kreisler Manufacturing New Comment [KRSL-7.00] with a solid base at the $ 5.50 level, KRSL rocketed to the nearly ten number in late September. We have, of course, the retracement and it is here that we have a buy interest. KRSL fabricates precision metal components and assemblies for aircraft engines with both military and commercial applications. KRSL products include tube assemblies of multiple sizes & configuration, vane inserts, and blade locks. For the FY ended 6/30/01, net sales increased 30% to $ 18.7M. Net income totaled $ 2.3M, up from $ 305K. Revenues benefited from new customers. Net income also reflects decreased professional fees. Update: 10.29.01: $ 8.20, sell. Again, too spiky. To re-buy the retracement sub $ 5.50

ICTS International Nv. New Comment [ICTS-9.92] – aviation security services. Large breakaway gap from the stable price base of sub $ 5.00 to nearly $ 13. Management is highly suspect but now we have the pullback and we are interested. Operates primarily in Europe & the U.S., providing passenger handling related services to major carriers. ICTS is also engaged in security consulting, training & auditing for airlines & airports. For the 6 months ended 6/01, revenues rose 29% to $ 90.8M. Net income totaled $ 32.7M, up from $ 5M. Let’s put on the watch list. Update: 10.29.01: correction, insert point for this comment was 9.92 not 6.92$ 8.29. We are looking for the gap fill at just under $ 5.00

Edo Corporation New Comment EDO-24.84] again we have a solid base and a leap off it post September 11th – in this case from $ 19 to over $ 30. We are consolidating that advance and our interest is peaked. This is close enough to accumulate and becomes a “strong buy” upon a break of $ 20. Here is a recent release of interest: Update: 10.29.01: $ 28.75 exit-again to re-buy and in this case sub $ 20. Like out.

Taser International New Comment [TASR-10.69] the July/August base was $ 5-6 and the stock has exploded to the current high of 12.26. We have no interest here, but will watch. We have no interest North of ten. Update: 10.29.01: $ 9.20 and still no interest here either…looking for a break of $ 7.00.

COMPUTERS & COMPUTER PERIPHERALS

Paravant [PVAT-1.90] Not a major player but a unique one. Revenues, small, but there and earnings as well-but erratic. PVAT engages in the design, development, production & sales of computer and communication systems, specializing in rugged, hand-held and

laptop computer products with primarily military applications. For the 9

months ended 6/30/01, revenues rose 53% to $ 36.1M. Net income fell 96% to

$ 33K. Revenues reflect the inclusion of a significant contract. Net income reflects a decreased gross profit due to a change in product mix. Update 10.19.01 $ 2.61 we still like it and like it here and on any break of $ 2.00 which looks unlikely. Recent high? A little over three. Update: 10.29.01: $ 2.90 sell and looking for a break of $ 1.75 for the purchase point.

Visionics [VSNX-11.55] and way off the base at four bucks. We will put on the watch list. Here is why: Develops & deploys facial recognition technology and designs and manufactures fingerprint biometric identification systems. For the 9 months ended 6/30/01, revenues rose 30% to $ 22.3M. Net loss before acct. change rose from $ 612K to $ 3.8M. Revenues reflect higher FaceIt license and live scan maintenance revenues. Net loss reflects lower gross margins and higher sales, marketing and product development costs and $ 2.2M in merger related costs. Update 10.19.01 $ 12.72 looking for the break of ten. The high was $ 15+ for traders. Update: 10.29.01: $ 17.10 no break of ten and traders should exit. Still looking for the break of ten for the buy point.

Roxio, Inc. [ROXI-14.10] the base is about here with a recent spike to $ 18. We like it here and on any bounce off $ 11. Buy. They are selling product. Digital content management software that enable individuals to personalize and store music, photos, video and data onto recordable compact discs, or CDs. For the 3 months ended 6/30/01, revenues rose 29% to $ 37M. Net income fell 2% to $ 2.4M. Revenues reflect increased sales of Easy CD Creator 5.0 to distributors. Net income was offset by higher payroll costs and increased stock-based

compensation expenses. Update 10.19.01 $ 14.68 no bounce off $ 11 but $ 13 ½ is close enough. Move to “buy.” Update: 10.29.01: $ 13.65 no change.

Datakey [DKEY-3.07] on watch list because it is a provider of smart card-based information security and digital signature solutions. For the 6 months ended 6/30/01, revenues rose 68% to $ 2.4M. Net loss from continuing operations increased 38% to $ 1.9M. Revenues reflect increased acceptance of the Company’s information security product offerings. Net loss reflects increased S/G/A expenses due to costs related to the opening and staffing of three additional sales offices. Update 10.19.01 $ 4.15 a nice move to $ 6+ but the real buy point is coming up and that is sub three. Continue to watch only. Update: 10.29.01: $ 4.16 there may be one more spike to just $ 5.00, but more likely is the break to a new buy point at just under $ 2.50. Exit to re-purchase.

Identix, Inc. [IDNX-8.18] the move $ 3.00 to nearly $ 11.00 was interesting. We have this on our watch list for a break and possible buy sub $ 5.00. IDX develops, manufactures and markets products that identify individuals through their fingerprints, & products that capture forensic quality fingerprint images. For the FY ended 6/01, revenues rose 11% to $ 81.8M. Net loss before acct. change applic. to Comm. totaled $ 27.6M, up from $ 12.9M. Results reflect higher live- scan systems revenues, offset by $ 1.9M restructuring charge. No debt and NO EARNINGS. Update 10.19.01 $ 7.79 a move to $ 11 [almost] but the buy point is still lower-perhaps a break of $ 6.00. Watching only. Update: 10.29.01: $ 7.30 and our buy point is a break of $ 5.00.

Efunds, Inc. [EFDS-15.55] reluctant mover to the downside. We can see why given the growth or earnings and revs in a crummy environment. Here are the quarterly numbers: Update 10.19.01 $ 17.18 we will disconnect from this stock. Appears just boring.

Update: 10.29.01: $ 17.09…maybe not so boring. Let’s buy again.

Intelli Check, Inc. [IDN-11.95] On watch list and no interest North of ten. IDN manufactures and markets an advanced document verification system to determine the customer’s age and validity of the ID to detect and prevent the use of fraudulent identification. For the 6 months ended 6/30/01, revenues rose from $ 47K to $ 475K Revenues reflect the initial sales of ID-Check terminals and terminal accessories. Higher loss reflects higher personnel-related and advertising expenses. Update 10.19.01 $ 13.10 and we are not yet seriously interested unless we can see a break of ten. That does look likely.

Update: 10.29.01: $ 16.05 hold, but looking to sell a move to the $ 20 range-if so- traders out.

Factual Data Corp [FDCC-10.15] Accumulate the eights and nines. We like the mortgage finance area. FDCC provides a broad range of information services including business-to-business services to the mortgage lending industry For the 6 months ended 6/01, revenues

increased 63% to $ 25.8M. Net income totaled $ 2.1M, up from $ 199K. Update 10.19.01 $ 9.49 the eights and nines do look right. Move from “accumulate” to “buy.” Update: 10.29.01: $ 9.25 no change.

CONSUMER DURABLES

Helen of Troy [HELE-9.75]. Strong Buy sub ten. Helen of Troy Limited designs, develops and sells hair dryers, curling irons, hot air brushes, brush irons, lighted mirrors, hair setters,

brushes, combs, hair accessories, women’s shavers, footbaths, body massagers and hair clippers. For the 3 months ended 5/31/01, sales rose 20% to $ 91M. Net income rose 97% to $ 4.6M. Revenues reflect increased sales in the Tactica operating segment. Earnings also benefited improved margins. Update 10.19.01 $ 12.11 nice move…take the profit. Update: 10.29.01: $ 9.53 pleased with the exit and now to re-buy the break of $ 7.00.

CONSUMER NON-DURABLES

Sketchers [SKX-11.19] and warning and warning again the obvious. Now solidly in the base. Buy. Sketcher U.S.A., Inc. designs and markets branded contemporary casual, active, rugged and lifestyle footwear for men, women and children in over 100 countries. For the 6 months ended 6/30/01, net sales increased 54% to $ 458.4M. Net income rose 81% to $ 33.9M. Revenues reflect continued products demand and increased brand awareness and marketing efforts. Earnings also reflect increased gross margins due to reduced

inbound ocean freight costs. But going forward, the word is moderation. Update 10.19.01 $ 12.08 no change. Update: 10.29.01: $ 10.82 no change. Staying…PERIOD.

Avon Products [AVP-45.85] a voice from the past. It appears that AVP has figured life out and that is showing up in good numbers in terms of both REVS and EPS. It is a global manufacturer and marketer of beauty and related products including cosmetics, fragrance and toiletries, gifts and decorative apparel, and fashion jewelry and accessories. For the 6 months ended 6/01, revenues rose 4% to $ 2.82B. Net income before acctg. change rose 12% to $ 219.7M. Revenues benefited from growth in worldwide beauty sales and increased representatives. Net income also reflects improved operating margins. Update 10.19.01 $ 46.49 no change. Update: 10.29.01: $ 46.86 no change.

CLEANING PRODUCTS

Church & Dwight [CHD-25.29] from this solid base, a buy. Manufactures and sells sodium bicarbonate-based products which the Company sells under the “ARM & HAMMER” trademark. For the 6 months ended 6/29/01, net sales rose 30% to $ 513.6M. Net income rose 6% to $ 25.6M. Revenues benefited from increased consumer product sales due to the addition of USAD acquired brands. Net income was partially offset by a lower margin sales mix and plant and warehouse shutdown expenses. Update 10.19.01 $ 24.96-accumulate. Update: 10.29.01: $ 26.39. Buy.

SHIPPING

A.C.L.N. Limited. [ASW-22.95] New comment 10.29.2001: this company with a magnificent track record of earnings and revenue growth is rated “Strong Buy.” The stock has been weak since the recent top at near $ 50 in early September 2001. There appears to be an important intermediate-term buy point. No debt, current ratio of over 4:1, PE of about seven and only 14.2 million shares. The stock is thin and volatile. Here is the data FYI: ASW arranges for the shipment of used automobiles sold in Belgium to purchasers in North and West Africa and the Middle East, and provides related customs clearance and services. For the 6 months ended 6/01, revenues totaled $ 142.1M, up from $ 68.4M. Net income rose 62% to $ 31.5M. Results reflect increased pre-paid shipments of automobiles, partially offset by reduced shipping margins.

And the quarterly numbers:

HISTORICAL QUARTERLY RESULTS (Thousands of U.S. Dollars)

REVENUES                  1998         1999         2000         2001

1st Qtr MAR             14,619         19,713         28,625         63,185

2nd Qtr JUN             17,821         24,462         39,814         78,895

3rd Qtr SEP                 27,936         28,156         50,304             0

4th Qtr DEC                21,506         25,207         49,406             0

EPS                         (U.S. Dollars per share)

1st Qtr MAR             0.280         0.330         0.620         0.930

2nd Qtr JUN              0.330         0.420         0.740         1.210

3rd Qtr SEP             0.470         0.490         0.850         0.000

4th Qtr DEC              0.370         0.460         0.710         0.000

And a negative as well:

LOS ANGELES, Oct. 29 /PRNewswire/

– A.C.L.N. Limited (NYSE: ASW) today stated that it has come to the Company’s

attention that there have been published reports discussing a new Nigerian regulation that

would prevent the import of automobiles more than five years old, which is proposed to go into effect from January 15, 2002. As of today, neither A.C.L.N., nor its port agent in Lagos, Nigeria, have received official notice of this regulation as is customary.

In the first six months of 2001, A.C.L.N. provided logistics services for approximately

24,870 cars to Lagos, Nigeria. Approximately 30% of those cars, or 7,460cars, were five years old or older. Going forward, if this new regulation becomes effective, A.C.L.N. expects that as much as 30% of its logistics volume to Lagos could be affected in 2002. Based on this information, A.C.L.N. believes that this could translate to as many as 24,000 cars, which could reduce gross profit by as much as $ 3.6 million or $ 0.24 per share in 2002. This new policy is not expected to affect the Company’s rapidly growing truck logistics services business to Lagos.

A.C.L.N. Limited President and Chief Executive Officer Aldo Labiad said, “Typically,

A.C.L.N. and our port agent in Lagos would receive official notification of a new regulation such as this. As of today, neither our port agent nor A.C.L.N. have received any such notice. In our business, we experience changes in local import legislation from time to time.

“However, if this regulation were to become effective, our experience in these markets

indicates that some percentage of cars barred from the port in Lagos as a result of this legislation could be shipped to other nearby ports we service such as Cotonou, Benin. In addition, any legislation prohibiting older, more affordable cars, could result in increased demand for inexpensive new cars, such as those sold as a part of our wholesale distribution business in the markets we serve.”

Labiad continued, “Benin has been a strong market in West Africa this year for A.C.L.N. Tariffs charged in Benin were recently reduced to 20% for used cars, among the lowest in West Africa. The port of Cotonou, Benin is less congested than Lagos, has slightly

higher margins, and is quite close to the Western border of Nigeria. We would expect that some of the car volume which would be diverted from Lagos as a result of this regulation could be redirected to Benin.”

According to Labiad, the Company anticipates earnings for the third quarter of this

year to be in line with expectations when they are reported on November 14, 2001.

About A.C.L.N. Limited

A.C.L.N. Limited (http://www.aclnfltd.com) is a global leader in automobile and truck logistics, serving six European ports, and fourteen ports of destination in Africa. Founded in 1978, A.C.L.N. Currently operates two primary business segments: (i) automobile and truck

logistics services between Europe and Africa, and (ii) a wholesale automobile service in Africa. With an established global network, A.C.L.N. provides door-to-door shipping and logistics of personal vehicles from Europe to developing countries in Africa.

HOMEBUILDING

Beazer Homes Usa, Inc. new comment 10.29.01 [BZH-44.90] we recently recommended BZH with a “Strong Buy” recommendation. We have a very strong pattern of revenue and earnings growth and we see not reason to think with interest rates near or at 40 year lows that this should not accrue to BZH’s advantage. Given also the decline in the price of the stock from the 52-week high of $ 79+ in July, 2001, we think the risk/reward is very much on the side of the buyer. BZH designs, constructs, markets and sells single family homes in AZ, CA, FL, GA, MD, NV, NJ, NC, PA, SC, TN, TX and VA. For the 9 months ended 6/01, revenues rose 15% to $ 1.19B. Net income rose 92% to $ 51.8M. Revenues reflect growth in home and land sales and increased mortgage origination revenues. Earnings also reflect higher prices in most markets, lower costs for raw materials and the absence of

an investment write-down.

Beazer Homes Usa, Inc.

HISTORICAL QUARTERLY RESULTS (Thousands of U.S. Dollars)

REVENUES                1998         1999         2000         2001

1st Qtr DEC            155,626        242,110        308,745        365,050

2nd Qtr MAR          221,323        327,344        332,961        374,2