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To: Cary Salsberg who wrote (4637)	3/3/2003 2:29:16 PM
From: Sam Citron	Respond to of 13403

OT If only market performance worked like Moore's Law, we would all be rich. But progress in human nature and international politics proceeds at a glacial evolutionary pace and each of the random mutations does not necessarily perpetuate our survival. Sometimes it seems that we take a step backwards in our gradual path toward progress. One lesson I have learned as an investor is not to invest if I cannot trust the CEO. I am beginning to think that this lesson applies to the CEO of the country as well. During normal times investors can safely ignore the winds that blow from Washington, knowing that the success or failure of most companies will depend on other factors. If there was ever a time for enlightened leadership, that time is now. But instead of leadership, we have a campaign of state-sponsored paranoia. It seems as though we have just woken up from a two-century long dream of isolation and invulnerability and must now pre-emptively strike out at any dictator who possesses or threatens to possess weapons of mass destruction, such as those that we and our friends possess. What nerve that even the poor should seek to acquire WMDs. Is this a case of Moore's Law gone wrong that these technological marvels of destruction should now be well within the reach of not just poor nations, but of stateless terrorist organizations as well? If power is the possession of a monopoly on violence, then we seem to be losing power all the time. Let's review the rules: (1) Only the US is permitted to use pre-emptive violence. (2) We will do anything to protect the right to bear arms at home, including enduring rates of murder per capita that are much higher than any other developed country in the world, but will kill, if necessary, to enforce arms-control abroad. It is probably no coincidence that the only investment I have made in the last year that is working out well is a cynical bet on GTECH Holdings, which provides computerized online lottery services and products to government-authorized lotteries worldwide. It is essentially a bet that states will find it more politically expedient to expand lottery systems to pay for essential services, instead of asking for higher taxes during a period of rising deficits at the local, state and federal level and rising unemployment. GTK has been my winning lottery ticket -- up 40% in about 6 months. As I review my investment performance, I am forced to conclude that I have not been bearish enough. I naively thought that the economic cycle was detached from the political cycle and that we were in the process of bottoming out. Just a case of pre-war jitters, I thought, but eventually the rockets' red glare, the bombs bursting in air, would give proof through the night that our flag was still there and the bull market would resume. Now it looks like Afghanistan and Iraq are just the first two battles of a war we will eventually call WWIII, and that the war will take a very long time and the reconstruction period will be even longer still. What seems clear is that we are just at the beginning of this world war. I'll have to take a look at history, but I am not sure that the beginnings of World Wars are good times to invest.