Subject: File No. S7-09-00
 
Date:    03/24/2000 1:36 PM
     
     
Dear Mr. Jonathan G. Katz: 
 Ref. S7-09-00
     
I am the president of the investment advisory firm named Dynamic Capital 
Management.  In my practice I have solved the mathematical problems 
associated with tax efficiency, or rather tax optimization.  We have received 
notification of the allowance of a patent on our about to be release product 
called DynamicTaxOptimizer. It involves inputs of a set of facts and 
alternate price performance expectations.   In it we are able to calculate 
for investors on a lot-by-lot basis at what price it makes sense to sell a 
stock, pay the tax, and reinvest for higher after tax wealth.  We expect it 
to become a standard in the industry because it represents a higher value 
goal of maximizing wealth instead of minimizing taxes.
     
The reason I mention this is that one of the essential elements of the 
discipline is to discriminate not only on the basis of each lot by purchase 
date, and cost basis, but also of tax rates.  Lower tax rated individuals can 
justify higher turnover than higher ones.  Lower cost basis lots, or those 
subject to higher tax rates, need higher rates of returns to justify a sale. 
This because the additional tax burden suffered by the selling and 
reinvesting, as opposed to the continued holding of a lot, needs to be offset 
by the superior performance of a substitute investment as compared with 
holding a position. The practical consequence is that given an assumed 
reinvestment rate, only higher sale prices warrant a sale for such lower cost 
basis, or higher tax burdened lots.  Therefore, since this will also work in 
commingled environments, mutual funds will eventually want to offer different 
funds targeted at different tax rated individuals in order to optimize after 
tax results.  Using the same turnover for all tax rated individuals will 
either result in lost opportunities for lower tax rated individuals, or too 
high taxes for higher ones.  Therefore a requirement that the highest tax 
rates should be assumed for all reporting of mutual fund performance may 
substitute for what may possibly be more accurate results associated with a 
properly executed tax optimization discipline. Or it may inadvertently 
disaffect an otherwise more sophisticated and optimal strategy that must 
discriminate by purchase date, cost basis, and tax rates, in order to be 
fully effective.
     
We believe that the only way for accurate after tax results to be represented 
is either to have an investors tax rates inputted into a system before 
performance numbers are presented, or that a table, or set of tables, be 
presented whereby investors could match their respective short and long term 
tax rates and identify their appropriate respective performance. The 
importance and application of all this in the separate account arena is no 
less.
     
Our website will be available to the mass market by May, and institutionally 
in the months that follow.  We believe it represents what is the first 
fundamental, and we think best, solution to date, for this complex subject. If 
you would like some material on the efficacy of DynamicTaxOptimizer, or would 
like a demonstration of it's logic and power, I would be happy to offer it to 
you.  The math is compelling, and we are receiving a substantial reception 
from the investment community, even prior to market availability. We also 
anticipate the patent issuance by June, having satisfied all federal 
requirements.  
     
Our goal here is to perhaps alert you to the potential regulatory impedance 
that a flat based measurement benchmark might generate, at what could 
otherwise be the forefront of significant market sophistication and customer 
service enhancement and disclosure capability. Across perhaps a  variety of 
technology supported products. We applaud your move to improve the customer 
protection environment.  We would be delighted to work with you to that end.
     
I hope this has been helpful, and would look forward to brief you further 
should you desire.  Thank you for your time.
     
Respectfully;
     
David Gottstein
President
DynamicTaxOptimizer LLC