The Capital Markets Index | Press Release

CPMKTS Looks At Bigger Picture:
Stocks, Bonds and Liquid Investments Simultaneously Reach New Highs

Houston, Texas, October 13, 2006 - Contrary to popular beliefs about market dynamics, indexes measuring the total returns of all three components of U.S. capital markets - stocks, bonds and liquidity investments - reached new highs last week.

Dorchester Capital Management, the creator of the Super-Macro Index CPMKTS^sm The Capital Markets Index, the first and only measure of the total return of the U.S. investment-grade stocks, bonds and liquid investments, today noted that CPMKTS, as well as the three sub-indexes measuring returns for each component, reached new highs last week - the first time this has occurred since May 5, 2006 In contrast, the company noted the widely followed Macro Market indexes did not uniformly achieve new highs last week.

"While stocks and bonds may move in opposite directions, they often move in tandem. However, before May 5, 2006, the last time all of the three major markets simultaneously achieved new highs was on March 23, 2000. This is in marked contrast to the late 1990s when the markets’ total returns were more consistently positive in unison," said Warren Schmalenberger, Dorchester’s founder and chief executive officer. "The fact these events went largely unreported may suggest it’s time we re-evaluate the way we view markets and evaluate their performance. More specifically, it may be time to start looking at the bigger picture."

The data used in the analysis is from Dorchester’s extensive data base of the American securities markets. This database comprises approximately 240 million time series of data (items of information tracked over time).

CPMKTS is one of the few Super-Macro Indexes to date and the only one to include stocks, bonds and liquidity. Super-Macro Indexes simultaneously measure the performance of several markets, using Macro Indexes (indexes measuring the performance of entire markets such as equities, U.S. Treasury Securities or investment-grade bonds) and other Super-Macro Indexes as building blocks. Such indexes reflect performance of entire markets over time - a distinction from Micro Indexes, which look at sub-sets of information and are more inclined to fluctuations over the long-term.

In brief, the three categories of indexes are as follows:

Super-Macro Indexes measure the performance of several markets simultaneously, using Macro Indexes and/or other Super-Macro Indexes as building blocks. They are the most representative of the possible choices for investors and consequently provide the greatest possible diversification.
Macro Indexes or major market indexes measure the performance of entire types of markets such as the equity market, the U.S. Treasury Securities market or the investment grade corporate bond market.
Micro Indexes, or portfolio security selection indexes, are those that look at portions of a Macro Index. For example, the equity market can be viewed by size of capitalization, industry, growth, value or other characteristics. Each of these indexes looks only at a portion of a market and, therefore, should not be expected to perform over a longer time horizon in a manner like Macro Indexes or Super-Macro Indexes.

All indexes are rules-based or systematic, meaning there is a transparent, recurring logic in their construction. Some indexes are completely rules based while others - generally Micro Indexes - are managed by a committee making "judgment calls" in addition to any relevant rules. Indexes managed by committee do not generally have the same degree of transparency.

Additionally, all Super-Macro Indexes and most Macro Indexes are calculated using market capitalization weighting methods. Many new Micro Indexes, which filter or cull the market in different ways, have appeared recently. Micro Indexes can be calculated by using either capitalization-weighted methods or other methods such as equal weightings, dividend weightings, or weightings derived from income and balance sheet data. It is possible for these indexes to have greater returns than corresponding macro indexes in the same market due to their higher levels of risk.

Previous highs and lows, as well as the current values for the CPMKTS family of indexes are as follows:

CPMKTS Indexes' Levels and Compounded Returns During Current Cycle
(Total Return Indexes)

Previous High Return Previous Low Return New High Return Current

CMPKTS 10502.20
(3/24/00) -23.68%
8015.73
(7/23/02) 47.71%
10532.81
(11/22/04) 18.70%
12044.98
(10/12/06)

CMPKTE 10684.13
(3/24/00) -47.71%
5586.38
(10/9/02) 92.10%
10731.30
(5/5/06) 2.77%
11028.56
(10/12/06)

CMPKTB 10000.00
(1/1/00) -0.94%
9905.80
(1/18/00) 1.39%
10043.00
(2/3/00) 58.54%
15771.04
(10/12/06)

CMPKTL 10000.00
(1/1/00) N.A.
25.03%
12502.82
(10/12/06)

About Dorchester Capital Management Co.
Dorchester Capital Management Company is a Houston-based company focused on designing financial products for the professional investment community. The data used in the analysis is from Dorchester’s extensive data base of the American securities market. CPMKTS The Capital Markets IndexSM, is carried on The American Stock Exchange under the symbol CPMKTS, with data updates every 15 seconds. The Amex also publishes sub-indexes CPMKTE, CPMKTB and CPMKTL, tracking equities, bonds and liquidity.

For additional information, please visit the company's Web site at www.cpmkts.com.

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