Fred Hager's Investment Guide and Outlook 

                                                                           July 2002

The performance is the result of buying and holding the right stocks for the long term.  Such a strategy has produced the most significant gains over the long-term.  Warren Buffett, probably the most successful investor of our time, believes the same thing, and many of the most sophisticated investors agree with him. 

Not having to pay taxes until you sell becomes a compelling reason to hold once you are up a few thousand percent.

Since 1986, Hager's long-term portfolios have earned an average of 28% compounded per year, to this very day. The current market represents a greater opportunity than I had in 1986 when FredHager started.

This does not mean the market cannot go lower or that a full recovery will happen right away. However if you like to take advantage of this great future potential, you have to be in the market and be willing to live with its inherent volatility. The right stocks will substantially outperform the market over the next decade.

Hager's strategy has proven to be very profitable in spite of three bear markets and the biggest drop in the NASDAQ since its inception. Before you study Hager's investment report, be sure to examine my record carefully.

Table 1 is Hager's fifteen year growth projection published August 1, 1986
Table 2 represents the actual results during those fifteen years
Table 3 represents the growth projection of our portfolios for the next ten years

For the purpose of measuring our long term performance I took all transactions into consideration that were made in portfolio A and B, which are our long-term flagship portfolios. It includes the last full year, which was down 73%.

For the record, we have three portfolios that were started in 2000 and 2001.  These were started to satisfy subscriber requests for more aggressive investing, and more analysis of companies.   Those portfolios are down an average of 80%. In my opinion though, measuring short-term performance is meaningless with a volatile portfolio. It becomes meaningful only after a full bull and bear market cycle.

My 35% Target projections are based only on the proven strategy used in the A and B Portfolios.

The Table 1 below was sent to Mark Hulbert's Financial Service on August 1, 1986 for the record and distributed to our subscribers at the same time.

I am sure you find it surprising that 15 years ago I calculated that a bear market could drop prices by 65% from a bull market level and that at the same time a bull market would pull prices up 300% from a bear market level. Since nobody can time the market it makes more sense to ignore the volatility and concentrate on your long-term objective.