XL operates in four underwriting segments: insurance,reinsurance, Lloyd%s Syndicated and financial services, and investment operations of the company. For the 9 months ended 9/30/00, total revenues increased 14% to $2.08B. Net income increased 23% to $505.7M. Results reflect higher netpremiums earned due to increased syndicate capacity. Net income reflects improved market condition in property & casualty businesses and decreased interest expenses.

December 10, 2000

On Friday, XL Capital rocketed to a new 52-week high on Friday on twice its normal trading volume. The new high was achieved on 1.2 million shares traded, well above the average of 513,000 shares. Although the company has never split its shares, we will pound the table in support of the company announcing its first ever stock split. With 999.99 million authorized shares and only 127.4 outstanding, the company has ample shares to affect a stock split. A likely time would be with earnings in January. We are very impressed with the stock’s strength, though we only have to look to the insurance index (IUX.X) and banking index (BKU.X) as conformation of the stock’s holding power. Looking at the chart, we now see support levels at the 5-dma at $82.33, the 10-dma at $80.75 and the 20-dma at $78.53. Resistance will now be Friday's high of $86.50. Look for more good volume and a bullish ascent to conquer initial resistance. Use a quick bounce off a support level as a possible entry point for a new play. We will keep you posted of any split announcements should they arise. We will stand pat with our stop loss order at $75.38.

Picked on December 3rd @ $80.25
Change since picked +5.94
Stop Loss @ $75.38

January 2, 2001

On Tuesday, the broad markets sold off in a big way with both the Dow Jones Industrial Average (INDU) and the NASDAQ Composite Index (COMPX) down triple digits. During the flood of this selling, our stop on XL Capital Limited was hit at $85.00. After nearly a month, we are out of this play with a $4.75 profit. We will continue to watch XL for better opportunities and a possible split announcement in the near future.

Picked on December 3rd @ $80.25
Profit/Loss = +4.75 ( +6%) (Stopped Tuesday @ $85.00)
Best Profit = +9.00 (+11%)

December 31, 2000

XL Capital Limited, located on the tiny island of Bermuda, rose 68% for the year and matched it 52-week high on the last day of trading. On Friday, XL topped out at $89.25 but was unable to move any higher. XL only traded 400,000 shares for the day, which is 28% lower that it's normal 3-month volume of 515K. The insurance/finance company remains firmly in our crosshairs as a stock split candidate. We are hopeful that board members will authorize a split when the company releases its Q4 results in the near future. The company has almost 1 billion shares authorized and only 127.5 million outstanding. We see this past year's phenomenal growth in the share value as a great excuse to reward investors with a split. Additionally the split would make the stock more affordable to the average investor and more accessible to mutual funds. Once trading resumes on Tuesday, look for the stock to encounter resistance at $89.25. Support should be solid at the 5-dma now located at $86.25. Use a bounce off support or an assault on resistance on good volume as possible entry points for new plays. We encourage you to look for strength in the S&P Insurance Index (IUX.X) and the Dow Jones Industrial Average (INDU) as conformation of any moves higher. We are going to keep our stop on this play at $85.00 to protect profits should the stock tailspin south.

Picked on December 3rd @ $80.25
Change since picked +7.13
Stop Loss @ $85.00