1. From Greed to Concern U.S economy-catch me if you can
The Feds get serious
Inflation resists arrest!
Julian & George surrender

2. Three strikes and you’re out!*
* The FOMC has now raised rates five times

3. NASDAQ 1000 2000 3000 4000 5000 6000 Jan97 Jun97 Dec97 Jun98 Dec98
May99
Nov99
May00
Source: Bloomberg

4. JASDAQ 20 40 60 80 100 120 140 Jan97 Jun97 Dec97 Jun98 Dec98 May99
Nov99
May00
Source: Bloomberg

5. Surely not Cisco! 10 20 30 40 50 60 70 80 90 May95 Feb96 Oct96 Jul9710 20 30 40 50 60 70 80 90
May95
Feb96
Oct96
Jul97
Mar98
Dec98
Aug99
May00
Source: Bloomberg

6. “The ability to monetise shareholder ignorance has
probably never been exceeded”
Warren Buffett April 2000

7. Anything.com Q . How to turn $10,000 into $3.0m in one day
A . Buy the wrong stock
The story of AppNet Systems, APPN and Appian Technology Inc.

8. Nobusiness.com or Suckedin.com
“The company is not currently engaged in
any substantial activity and has no plans to
engage in any such activity in the foreseeable
future”.
…. NetJ.com worth $50m*
* as of January since then NetJ.com has fallen sharply

9. How big is this? U.S 40 65 44 JPN 20 40 11 EUR 20 45 29 L. AM 7 7 3
PC Penetration Worldwide (%) Home Business internet usage
U.S
JPN
EUR
L. AM 7 7 3
Asia 1 5 6
Source: Morgan Stanley, Dean Witter

10. How fast is this?* Radio - 38 T.V - 13 Cable - 10 Internet - 5**
* Years to reach 50 million U.S households
** estimate

11. How boring is this? What’s “in” on College Campuses? 73% - internet
71% - beer
If stranded on a desert island?
67% - PC with internet 23% - telephone 9% - T.V
Source: Americaonline/Roper Starch Cyberstudy

12. B2B - to be or not to be? $39bn to $1,500bn by 2004*
A disinflationary force
GM and Ford already have
* Goldman Sachs Report - Jan 2000
** Goldmans are now saying $3 trillion by 2005!

13. The Tech Locomotive* 1960 - 4 1970 - 6 1980 - 13 1990 - 30 1999 - 52
Source: U.S Dept of Commerce
* U.S based I.T as a % of business capital equipment spending

14. Yes it’s big! Continued demand for I.T A smarter mobile phone
Exponential growth in demand
1.5 bn customers by 2003*
* Morgan Stanley

15. Valuations and the denominator*
Increase US$bn
Sales
Earnings
Mkt Cap 1,700 2,900 5,700 4,000
* U.S Technology Sector
Source: Sanford C. Bernstein & Co., Proprietary Limited

16. Alice.com in Wonderland
$ Billion
Number of % Market Companies* Unprofitable Earnings Value
324 90% (6.9) 1,157
* Internet Universe at 31 December 1999
Source: Sanford C. Bernstein & Co., Proprietary Limited

17. Pursuit of digital nirvana?
Marginal
Cost
Sales or Output

18. Not everyone can win Vicious attrition rate Brand name is the key
Winners will be awesome

19. Is it different this time?
P/Es are for nerds
Price/Sales - the new valuation paradigm
Japan in 1989
Who owns a Japanese car or stereo?

20. The Lucky Country Who stole the silverware? Signs of a slowdown
RBA hostage to A$
Banks are cheap
Selective value

21. “We do not dispute or deny that the information technology revolution will have a seismic impact upon our lives. Similar to the telephone, automobile etc. The debate is how to quantify the future value of this revolution into today’s prices”.

22. In Closing.com The implosion of concept.com
Yes it is a revolution, so was the car
Adam and the web
The end of totalitarianism?
Old will become new
Tech - still priced for perfection

23. Disclaimer
This presentation has been prepared by Rothschild Australia Asset Management Limited (ACN ) and is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. It does not contain and is not to be taken as containing any securities advice or securities recommendation. Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions. Rothschild does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this presentation. Except insofar as liability under any statute cannot be excluded, Rothschild and its directors, employees and consultants do not accept any liability for any error or omission in this presentation or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise noted, Rothschild is the source of all charts; and all performance figures are calculated using exit to exit prices and assume reinvestment of income, take into account all fees and charges but exclude the entry fee.