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TWST: Brian, why should investors be looking at the cruise line industry in 2000?

Mr. Egger: I think there are a few general reasons why investors should consider investing in cruise line stocks. Cruise line stocks represent an excellent way to capitalize on the demographics of the leisure/travel industry. The average cruise customer is about 51 years old. In fact, about half of all cruise passengers are in the age range of 40 to 60. The number of people in that age bracket in this country is going to increase from about 73 million people today to closer to 85 million by the year 2010. So the targeted customer base is growing in size as the country undergoes the aging of the baby boomer population. From an even more general perspective, investing in cruise line stocks is a great opportunity to capitalize on a segment of the leisure/travel sector that is under-penetrated. Only about 12% of the population in North America has ever taken a cruise. Over time, we estimate that between 30% and 50% of people in this country represent either prime or potential customers that might take a cruise. So the demographics and population penetration expansion opportunities are very strong. This is also an industry that generates significant free cash flow to sustain strong unit growth, without relying on any external financing. And to the degree cruise yields, which have been under pressure of late, begin to stabilize, the resulting earnings growth should be solid.

TWST: Brian, is there anything that you’d like to add? Are there any peripheral companies that you’d like to touch on?

Mr. Egger: We do follow some companies that are not among the big three. American Classic Voyages (Nasdaq:AMCV) is a smaller capitalization company. It is a US-flagged cruise ship operator, which gives it the ability to operate cruises that include contiguous ports of call in North American ports without having to make intervening stops at non-US ports. That endows American Classic Voyages with a key advantage. Its business is split between the Hawaiian intra-island market, which is significantly under-penetrated, and the inland and coastal waterway cruise market on the North American mainland. The company commands a 50% share of that market. American Classic Voyages is a long-term growth story, and one that should capitalize on the significant opportunities that exist to penetrate the cruise market in Hawaii, where only about 2% of vacationers take a cruise, compared to some 20% of Caribbean visitors. American Classic Voyages enjoys regulatory protection in as much as Carnival (NYSE:CCL) and Royal (NYSE:RCL) can’t enter their markets. It is incurring some start-up losses and pre-marketing, pre-sailing expenses now, but longer term, as the cash flow builds and the company exploits the Hawaiian market, the stock should appreciate in price.