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TWST: Kevin, for the most part did the newspaper stocks perform in-line with your expectations for 2000? If there were any surprises, were they positive or negative?

Mr. Gruneich: They pretty much performed in-line with my expectation, and my expectation is that they don’t perform as a group. These are typically not volatile stocks; you don’t have a stock that doubles in any one year and you don’t get totally burned in any one year. That occurred again in 2000. There tend to always be stocks within the group that outperform the S&P 500 and stocks that underperform the S&P 500, and that occurred again in the year 2000. These stocks typically take turns being the winner, or the leading appreciator, in the group. That happened again in 2000. So the stocks did act as expected — that is, they didn’t act like a group. It is a fun group to cover — a real stock-picker’s group of companies.

TWST: Kevin, what are you predicting for advertising spending in the second half of the year? What is Bear, Stearns looking for in terms of the economy?

Mr. Gruneich: For the back half of the year, we’re looking, as probably everyone else is, for better numbers than we see in the front half of the year. In the front half of the year, we’d be happy to see flat advertising. Our full year estimate is for 2%-3% ad revenue growth for the newspaper business, so that would reflect a move to near the mid-single-digits range in the second half. That’s a positive development, since the fourth quarter is the most seasonally important ad period. This will be primarily aided by Fed rate cuts and by easier comparisons, given the fall-off that I mentioned earlier that really started late in Q2. I am not quite as negative as Doug regarding national advertising. It has been in secular uptick for five plus years, outpacing other newspaper ad categories every year since 1995. I think that will persist.

TWST: Do you have a favorite one or more in the group today, Kevin?

Mr. Gruneich: At the top of our list would be The New York Times Company (NYSE:NYT), which we like primarily because of its national skew, both in terms of advertising and circulation. That provides a very unique, positive positioning relative to any other diversified newspaper stock. Again, management has done a great job on the Internet side, and now we see losses coming down fairly dramatically over the next couple of years, which is a nice wind at your back during softer economic times. They have also indicated a great desire for their own stock. In the past four years they have repurchased about $1.4 billion worth of stock. Last September, they announced yet another $600 million share repurchase that they might complete by the end of 2001. So they will have bought back about $2 billion of stock over a five-year period, which is pretty aggressive for a company with a sub-$7 billion equity market capitalization.