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from Outstanding Investor Digest's August 8, 1997 edition


SOGEN FUNDS'
JEAN-MARIE EVEILLARD ET AL.
(continued from preceding page)


    For all of those reasons and more, we're very pleased to bring you excerpts from a series of conversations with Eveillard and associates Charles de Vaulx, Elizabeth Tobin and Charles-Edward de Lardemelle. We hope that you find their insights about the current financial scene in the U.S. and elsewhere and about a handful of what seem to be particularly fascinating ideas nearly as intriguing as we do:


WE'VE BEEN TOO CONSERVATIVE.
AND WE SHOULD'VE KNOWN BETTER.

OID: Historically, you've achieved excellent returns despite hauling around lots of cash.
     Jean-Marie Eveillard: I think our cash equivalents have probably fluctuated between 15% and 35%. I suspect it's averaged something like 20%.
    Some people believe it doesn't matter how one gets from point A to point B - whether it's via a straight line or with tremendous ups and downs along the way. However, many individuals are simply uncomfortable with lots of ups and downs. It's not that they don't understand the math - because many do. They're simply uncomfortable with lots of volatility.

OID: So that too much volatility in their fund would make them, in the colorful words of Roger Engemann, more likely to get off the train.
     Eveillard: That's right. I've come to realize that most of our shareholders tend to be of the fearful variety. Our appeal to them, if you will, (for as long as it lasts anyway), has been, "We'll get some returns with him, but he'll protect our capital along the way."
    So we appeal on the basis of having delivered what you might call decent returns with modest fluctuations, where people know that when things have gotten difficult, we've held up very well.

OID: Although some would consider near top quartile returns despite maintaining 20-25% cash levels plus other hedges something better than decent.
     Eveillard: Thanks. But if equity markets continue to be so strong - particularly domestic equity markets - I worry that caution will no longer be a virtue, but a vice.

OID: But, at least, we'll all be rich....
     Eveillard: Yes. And, at least so far, my clients haven't had a heart attack with me.

OID: And your percentage of cash today?
     Eveillard: Approximately 20%.

OID: Besides cash, how much of your portfolio would you consider to be in the hedge category?
     Eveillard: A little less than 5% of our portfolio is in gold-related securities. And that's the alternative asset. Presumably, it provides protection if financial asset prices go down. So between cash-equivalents and gold-related securities, we have roughly 25% of our portfolio in what you might call hedges.
    Then, we have roughly another 14% in a variety of

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