<PAGE>
SEQUOIA FUND, INC.
ANNUAL REPORT
December 31, 1996
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholder:
Sequoia Fund's results for the fourth quarter and full year
1996 are shown below with comparable results for the leading
market indexes:
Sequoia Dow Jones Standard &
1996 Fund Industrials Poor's 500
Fourth Quarter +7.4% +10.2% +8.3%
Year 21.7 28.8 23.0
As shown above, 1996 was yet another surprisingly strong
year for U.S. stock markets and for Sequoia Fund also. You will
recall that 1995 results were even more dazzling, with the Fund
and the S&P 500 up 41% and 38%, respectively. In fact, as I
write this letter, Sequoia is up an additional 10% year to date
1997 compared to a gain of about 9% for the S&P 500.
As your longtime Chairman, I think this might be an
appropriate time to step back and reflect on what our goals were
when we started the firm which manages Sequoia and measure the
degree to which we have achieved those goals.
In a memo written in 1969, we stated that we wanted to do
only one thing -- strive for excellence in money management by
having the principals concentrate on security analysis and use
the results of their own research, as opposed to using outside
research, to manage portfolios themselves rather than separate
the task between the "research department" and the "portfolio
managers". Rick Cunniff and I had been doing research and
investing in this fashion for over fifteen years at that time.
This approach is still unusual on Wall Street, some 28
years later. Typically, people start out their careers in an
"analyst" function but aspire to get promoted to the more
prestigious "portfolio manager" designation which is considered
to be a distinct and higher function. To the contrary, we have
always believed that if you are truly a long term investor, the
analyst function is paramount and portfolio management follows
naturally. While we don't go in much for titles at our firm, if
we did, my business card would read "Bill Ruane, Research
Analyst".
Rick and I are designated in most publications as the
specific managers of Sequoia. However, many people are aware
that Bob Goldfarb joined us in 1971, the year after Sequoia was
born, and that his name deserves equal billing. From day one,
Bob's creativity, financial capability and judgment have made him
2
<PAGE>
a key person at Ruane, Cunniff & Co., Inc., and therefore at
Sequoia. Bob has been a major shareholder of the management
company for some time. He helped pave the way to any success we
may have had in the past and at the present age of 52 will
provide the leadership in research excellence which we strive to
achieve for many years to come.
Fourteen years ago, our firm's research ability was further
enhanced in a major way by the arrival of Carley Cunniff at our
firm. Carley, who just happens to be the daughter of Rick
Cunniff, had come to my attention a number of years earlier prior
to her graduation from Harvard Business School when the head of a
major Wall Street investment bank called me to see if I could
influence her to accept a job at his firm instead of at a
competitor's. After a number of years in investment banking
where she became expert at tearing apart balance sheets and
income statements, Carley decided the search for undervalued
stocks was more interesting than mergers and acquisitions. She
joined us in what was one of our finest acquisitions. Carley is
deeply involved in selecting and analyzing the companies we have
under consideration and in monitoring the progress of the
companies we own.
I have designated Bob Goldfarb in my will as the trustee and
money manager for essentially all of the personal finances of my
wife and family in total confidence that he will provide both
outstanding prudence and sound growth of capital for them. The
common stock portion of my family's investment accounts is almost
entirely invested in Sequoia. Further, I have also named Carley
as successor trustee to Bob. I do not believe the future of the
firm and the security of my family could be in finer hands.
Twelve years ago, Greg Alexander joined us out of Yale where,
despite his economics degree, it appears he spent most of his
time reading annual reports. He is highly creative and still
spends at least eight hours a day consuming annual reports. I
don't know anyone who processes more ideas with greater
analytical depth and he is excellent at cutting through to the
heart of an issue. He is a master of chewing through immense
detail to reach original insights and judgments about our
portfolio companies.
Another major addition to our firm came three years ago in
the person of Jon Brandt. Jon combines warm humor and a low-key,
pleasant personality with a computer-like mind. Jon reviews the
earnings reports of our companies with x-ray scrutiny and in very
short order focuses in on the economic reality behind the
accounting numbers, with insights that a typical analyst may or
may not attain in a week of study. He has had a major impact on
the selection and composition of our portfolio holdings from the
day he arrived.
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Rounding out our research team are four highly discerning
analysts, Kirk Hosfelt, Andy Kneeter, Paul Lountzis and Tania
Pouschine, who work hand in hand with us with a primary focus on
developing an in-depth qualitative understanding of the products,
organizations and managements of our portfolio companies. Tania
is particularly astute in the thoughtful appraisal of company
managements and Kirk excels in getting at the nuts and bolts of
how a business really works. Andy and Paul do an outstanding job
concentrating on developing extensive business information
sources to shed light on key business issues.
If you were to ask any company in which we have invested,
they would point out that over any year's time they have met with
searching questions from just about every one of the ten of us.
When we have the seed of a good idea, we all work on it and try
to cover the facts like "the dew covers Dixie". We believe that
truth is in the details and this intensive research on stock
ideas is of immense importance in avoiding big mistakes and
developing the positive convictions required to own and hold
concentrated investment positions.
The product of this ongoing research effort is our current
portfolio which we regard as among the finest group of companies
we have ever owned. This qualitative assessment is supported
quantitatively by the underlying statistics for the aggregate
portfolio, including a return on equity in excess of 20% with an
ability to reinvest significant retained earnings at attractive
rates of growth. This latter factor has tremendous value in a
time of 6 1/2% money.
Our enthusiasm for the portfolio is tempered only by its
current level of valuation. Two years ago, we were equally
enthusiastic about the companies and their stocks. In the
ensuing period, the companies performed exceptionally well while
their stocks performed even better. As economist Herbert Stein
observed, if something cannot go on forever it will not. It
would not surprise us, therefore, if these businesses performed
better than their stocks over the next several years.
4
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I am proud of the depth and intensity of our research effort.
It is the cornerstone of the careful management of your money.
We've come a long way since Rick and I declared all signals go in
starting our firm. Finally, and thankfully, the two of us need
not be in shape for a decathlon to do careful research, and as
long as our health remains as good as it is we will continue to
do our best to contribute to the team.
Sincerely,
William J. Ruane
February 18, 1997
5
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SEQUOIA FUND, INC.
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $ 10,000
With Income Dividends Reinvested and Capital Gains
Distributions Accepted in Shares
The table below covers the period from July 15, 1970 (the date
Fund shares were first offered to the public) to December 31,
1996. This period was one of widely fluctuating common stock
prices. The results shown should not be considered as a
representation of the dividend income or capital gain or loss
which may be realized from an investment made in the Fund today.
Value of Value of Value of
Initial Cumulative Cumulative Total
$10,000 Capital Reinvested Value of
PERIOD ENDED: Investment Distributions Dividends Shares
- ------------ ---------- ------------- ---------- ---------
July 15, 1970 $10,000 $0 $0 $10,000
May 31, 1971 11,750 0 184 11,934
May 31, 1972 12,350 706 451 13,507
May 31, 1973 9,540 1,118 584 11,242
May 31, 1974 7,530 1,696 787 10,013
May 31, 1975 9,490 2,137 1,698 13,325
May 31, 1976 12,030 2,709 2,654 17,393
May 31, 1977 15,400 3,468 3,958 22,826
Dec. 31, 1977 18,420 4,617 5,020 28,057
Dec. 31, 1978 22,270 5,872 6,629 34,771
Dec. 31, 1979 24,300 6,481 8,180 38,961
Dec. 31, 1980 25,040 8,848 10,006 43,894
Dec. 31, 1981 27,170 13,140 13,019 53,329
Dec. 31, 1982 31,960 18,450 19,510 69,920
Dec. 31, 1983 37,110 24,919 26,986 89,015
Dec. 31, 1984 39,260 33,627 32,594 105,481
Dec. 31, 1985 44,010 49,611 41,354 134,975
Dec. 31, 1986 39,290 71,954 41,783 153,027
Dec. 31, 1987 38,430 76,911 49,020 164,361
Dec. 31, 1988 38,810 87,760 55,946 182,516
Dec. 31, 1989 46,860 112,979 73,614 233,453
Dec. 31, 1990 41,940 110,013 72,633 224,586
Dec. 31, 1991 53,310 160,835 100,281 314,426
Dec. 31, 1992 56,660 174,775 112,428 343,863
Dec. 31, 1993 54,840 213,397 112,682 380,919
Dec. 31, 1994 55,590 220,943 117,100 393,633
Dec. 31, 1995 78,130 311,266 167,129 556,525
Dec. 31, 1996 88,440 397,099 191,967 677,506
6
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The total amount capital gains distributions accepted in shares
was $206,031, the total amount of dividends reinvested was
$80,792.
No adjustment has been made for any taxes payable by shareholders
on capital gain distributions and dividends reinvested in shares.
7
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SEQUOIA FUND, INC.
Statement of Investments
December 31, 1996
COMMON STOCKS (91.85%)
Value
Shares Cost (Note 1)
- ------ ---- --------
BANK HOLDING COMPANIES (18.42%)
2,761,050 Fifth Third Bancorp $ 92,765,943 $ 173,428,453
2,100,000 First Bank Systems, Inc. 80,610,090 143,325,000
225,000 Mercantile Bankshares
Corporation 3,475,625 7,200,000
298,700 National Commerce Bancorp 7,406,981 11,425,275
160,000 Regions Financial Corporation5,348,750 8,270,000
479,900 Wells Fargo & Company 119,285,679 129,453,025
------------ ------------
308,893,068 473,101,753
------------ ------------
CONSUMER PRODUCTS (.26%)
339,200 Sturm, Ruger & Company, Inc. 361,700 6,572,000
----------- ------------
FINANCIAL SERVICES (27.93%)
21,034 Berkshire Hathaway Inc.* 165,788,581 717,259,400
------------ ------------
INSURANCE (11.54%)
4,400,000 Progressive Corporation-
Ohio+ 150,092,362 296,450,000
------------ ------------
MANUFACTURING - MOTORCYCLES (4.56%)
2,490,600 Harley Davidson, Inc. 66,707,726 117,058,200
------------ ------------
MOTION PICTURES & VIDEO
PRODUCTION (4.23%)
1,560,924 The Walt Disney Company 63,866,333 108,679,334
------------ ------------
PERSONAL CREDIT (2.20%)
613,400 Household International Inc.23,103,672 56,586,150
------------ ------------
PHARMACEUTICALS (5.35%)
2,760,000 Johnson & Johnson 55,292,183 137,310,000
------------ ------------
SERVICES (15.22%)
3,550,000 Federal Home Loan Mortgage
8
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Corporation 58,732,552 390,943,750
------------ -------------
Miscellaneous Securities
(2.14%) 48,739,496 54,924,000
------------ ------------
TOTAL COMMON STOCKS $ 941,577,673 $2,358,884,587
------------ -------------
9
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SEQUOIA FUND, INC.
Statement of Investments
December 31, 1996
(continued)
Principal Value
Amount Cost (Note 1)
- --------- ---- -------
U.S. GOVERNMENT OBLIGATIONS(8.15%)
$ 4,700,000 U.S. Treasury Bills due
1/23/97 $ 4,685,639 $ 4,685,639
54,000,000 U.S. Treasury Notes,
5-7/8% due 7/31/97 54,085,309 54,151,875
150,000,000 U.S. Treasury Notes,
6% due 5/31/98 149,533,364 150,539,062
----------- -----------
TOTAL U.S. GOVERNMENT OBLIGATIONS 208,304,312 209,376,576
----------- -----------
TOTAL INVESTMENTS (100%)++ $1,149,881,985 $2,568,261,163
============== ==============
++ The cost for federal income tax purposes is identical.
* Non-income producing.
+ Refer to Note 7.
SEQUOIA FUND, INC.
Statement of Assets and Liabilities
December 31, 1996
ASSETS:
Investments in securities, at value
(cost $1,149,881,985) (Note 1) $2,568,261,163
Cash on deposit with custodian 2,608,151
Receivable for capital stock sold 9,728,786
Dividends and interest receivable 3,247,129
Other assets 42,187
--------------
Total assets 2,583,887,416
==============
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LIABILITIES:
Payable for capital stock repurchased 705,156
Accrued expenses 2,183,763
-------------
Total liabilities 2,888,919
-------------
Net assets applicable to 29,185,056
shares of capital stock outstanding
(Note 4) $2,580,998,497
==============
Net asset value, offering price and
redemption price per share $88.44
======
See Notes to Financial Statements.
11
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SEQUOIA FUND, INC.
Statement of Operations
Year Ended December 31, 1996
INVESTMENT INCOME:
Income:
Dividends:
Unaffiliated companies $ 20,129,355
Affiliated companies (Note 7) 1,012,000
Interest 13,524,192
------------
Total income 34,665,547
------------
Expenses:
Investment advisory fee (Note 2) 24,026,121
Legal and auditing fees 100,159
Stockholder servicing agent fees 200,280
Custodian fees 130,343
Directors fees and expenses (Note 5) 148,989
Other 114,378
------------
Total expenses 24,720,270
Less expenses reimbursed by
Investment Adviser (Note 2) 544,000
------------
Net expenses 24,176,270
------------
Net investment income 10,489,277
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain on investments in:
Unaffiliated companies 181,100,219
Net increase in unrealized appreciation on:
Investments 284,570,632
------------
Net realized and unrealized
gain on investments 465,670,851
------------
Increase in net assets from operations $476,160,128
============
See Notes to Financial Statements.
12
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SEQUOIA FUND, INC.
Statements of Changes in Net Assets
Year Ended December 31,
-----------------------------
1996 1995
---- ----
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income $ 10,489,277 $ 8,739,165
Net realized gain (loss) 181,100,219 (13,914,683)
Net increase in unrealized
appreciation 284,570,632 646,622,517
-------------- --------------
Net increase in net
assets from operations 476,160,128 641,446,999
Distributions to shareholders from:
Net investment income (10,387,500) (8,810,242)
Net realized gain on
investments (166,897,159) (2,200,955)
Capital share transactions
(Note 4) 96,600,320 6,775,846
-------------- --------------
Total increase 395,475,789 637,211,648
NET ASSETS:
Beginning of year 2,185,522,708 1,548,311,060
-------------- --------------
End of year $2,580,998,497 $2,185,522,708
============== ==============
NET ASSETS CONSIST OF:
Capital (par value and
paid in surplus) $1,162,223,712 $1,065,623,392
Undistributed net
investment income 107,230 5,453
Undistributed net
realized gains (losses) 288,377 (13,914,683)
13
<PAGE>
Unrealized appreciation 1,418,379,178 1,133,808,546
-------------- --------------
$2,580,998,497 $2,185,522,708
============== ==============
See Notes to Financial Statements.
14
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SEQUOIA FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Sequoia Fund Inc. is registered under the Investment Company
Act of 1940, as amended, as a non-diversified, open-end
management company. The investment objective of the Fund is
growth of capital from investments primarily in common stocks and
securities convertible into or exchangeable for common stock. The
following is a summary of significant accounting policies,
consistently followed by the Fund in the preparation of its
financial statements.
A. Valuation of investments: Investments are carried at market
value or at fair value as determined by the Board of
Directors. Securities traded on a national securities
exchange are valued at the last reported sales price on the
principal exchange on which the security is listed on the
last business day of the period; securities traded in the
over-the-counter market and listed securities for which no
sale was reported on that date are valued at the mean between
the last reported bid and asked prices; U.S. Treasury Bills
with remaining maturities of 60 days or less are valued at
their amortized cost. U.S. Treasury Bills that when purchased
have a remaining maturity in excess of sixty days are stated
at their discounted value based upon the mean between the bid
and asked discount rates until the sixtieth day prior to
maturity, at which point they are valued at amortized cost.
B. Accounting for investments: Investment transactions are
accounted for on the trade date and dividend income is
recorded on the ex-dividend date. The net realized gain or
loss on security transactions is determined for accounting
and tax purposes on the specific identification basis.
C. Federal income taxes: It is the Fund's policy to comply with
the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its
taxable income to its stockholders. Therefore, no federal
income tax provision is required.
D. Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
increases and decreases in net assets from operations during
the reporting period. Actual results could differ from those
estimates.
15
<PAGE>
E. General: Dividends and distributions are recorded by the Fund
on the ex-dividend date. Interest income is accrued as
earned.
NOTE 2--INVESTMENT ADVISORY CONTRACTS AND PAYMENTS TO INTERESTED
PERSONS:
The Fund retains Ruane, Cunniff & Co., Inc., as its
investment adviser. Ruane, Cunniff & Co., Inc. (Investment
Adviser) provides the Fund with investment advice, administrative
services and facilities.
Under the terms of the Advisory Agreement, the Investment
Adviser receives a management fee equal to 1% per annum of the
Fund's average daily net asset values. This percentage will not
increase or decrease in relation to increases or decreases in the
net asset value of the Fund. Under the Advisory Agreement, the
Investment Adviser is obligated to reimburse the Fund for the
amount, if any, by which the operating expenses of the Fund
(including the management fee) in any year exceed the sum of 1-
1/2% of the average daily net asset values of the Fund during
such year up to a maximum of $30,000,000, plus 1% of the average
daily net asset values in excess of $30,000,000. The expenses
incurred by the Fund exceeded the percentage limitation during
the year ended December 31, 1996 and the Investment Adviser
reimbursed the Fund $544,000.
For the year ended December 31, 1996, there were no amounts
accrued to interested persons, including officers and directors,
other than advisory fees of $24,026,121 and brokerage commissions
of $309,715 to Ruane, Cunniff & Co., Inc. Certain officers of
the Fund are also officers of the Investment Adviser and the
Fund's distributor. Ruane, Cunniff & Co., Inc., the Fund's
distributor, received no compensation from the Fund on the sale
of the Fund's capital shares during the year ended December 31,
1996.
NOTE 3--PORTFOLIO TRANSACTIONS:
The aggregate cost of purchases and the proceeds from the
sales of securities, excluding U.S. government obligations, for
the year ended December 31, 1996 were $261,113,062 and
$480,807,359, respectively.
At December 31, 1996 the aggregate gross unrealized
appreciation of securities was $1,418,379,178.
NOTE 4--CAPITAL STOCK:
At December 31, 1996 there were 40,000,000 shares of $.10 par
value capital stock authorized. Transactions in capital stock
were as follows:
16
<PAGE>
1996 1995
------------------- -------------------
Shares Amount Shares Amount
------ ------ ------ ------
Shares sold 1,605,188 $ 136,443,268 1,446,747 $ 94,340,709
Shares issued to
stockholders on
reinvestment of:
Net investment
income 88,467 7,512,710 93,996 6,408,962
Net realized
gain on
investments 1,739,720 149,633,365 34,096 2,045,382
---------- ----------- ---------- ---------- -
3,433,375 293,589,343 1,574,839 102,795,053
Shares repurchased 2,220,186 196,989,023 1,453,448 96,019,207
---------- ----------- ---------- ---------- -
Net Increase 1,213,189 $ 96,600,320 121,391 $ 6,775,846
========== =========== ========== ===========
NOTE 5--DIRECTORS FEES AND EXPENSES:
Directors who are not deemed "interested persons" receive
fees of $6,000 per quarter and $2,500 for each meeting attended,
and are reimbursed for travel and other out-of-pocket
disbursements incurred in connection with attending directors
meetings. The total of such fees and expenses paid by the Fund to
these directors for the year ended December 31, 1996 was
$148,989.
17
<PAGE>
NOTE 6--AFFILIATED COMPANIES:
Investment in portfolio companies 5% or more of whose
outstanding voting securities are held by the Fund are defined in
the Investment Company Act of 1940 as "affiliated companies."
The total value and cost of investments in affiliates at December
31, 1996 aggregated $296,450,000 and $150,092,362, respectively.
The summary of transactions for each affiliate during the period
of their affiliation for the year ended December 31, 1996 is
provided below:
Purchases Sales
----------- ----------- Realized Dividend
Affiliate Shares Cost Shares Cost Gain Income
-------- ------ ----- ------ ---- ----- ------
Progressive
Corp. - Ohio -- -- -- -- -- $1,012,000
==========
18
<PAGE>
NOTE 7--SELECTED FINANCIAL INFORMATION:
Year Ended December 31,
------------------------------------
1996 1995 1994 1993 1992
----- ----- ----- ----- -----
Per Share Operating Performance (for a
share outstanding throughout the year)
Net asset value, beginning
of year $78.13 $55.59 $54.84 $56.66 $53.31
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income 0.38 0.31 0.42 0.64 0.93
Net realized and unrealized
gains on investments 16.41 22.62 1.41 5.39 3.98
----- ------ ------ ------ ------
Total from investment
operations 16.79 22.93 1.83 6.03 4.91
----- ------ ------ ------ ------
Less distributions:
Dividends from net
investment
income (0.38) (0.31) (0.42) (0.65) (0.93)
Distributions from net
realized gains (6.10) (0.08) (0.66) (7.20) (0.63)
------ ------ ------ ------ ------
Total distributions (6.48) (0.39) (1.08) (7.85) (1.56)
------ ------ ------ ------ ------
Net asset value, end
of year $88.44 $78.13 $55.59 $54.84 $56.66
====== ====== ======= ====== =====
Total Return 21.7% 41.4% 3.3% 10.8% 9.4%
Average commission
rate paid $.0550+
19
<PAGE>
Ratios/Supplemental data
Net assets, end of year
(in millions) $2,581.0 $2,185.5 $1,548.3 $1,512.1 $1,389.3
Ratio to average net assets:
Expenses 1.0% 1.0% 1.0% 1.0% 1.0%
Net investment income 0.4% 0.5% 0.8% 1.1% 1.8%
Portfolio turnover rate 23% 15% 32% 24% 28%
+ Required by regulations issued in 1995
20
<PAGE>
INDEPENDENT AUDITOR's REPORT
The Board of Directors and Shareholders
Sequoia Fund, Inc.
We have audited the accompanying statement of assets and
liabilities, including the statement of investments, of Sequoia
Fund, Inc. as of December 31, 1996, and the related statements of
operations for the year then ended, changes in net assets for
each of the two years in the period then ended, and the selected
financial information for each of the five years in the period
then ended. These financial statements and the selected financial
information are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and the selected financial information based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and the selected financial information
are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation
of securities owned as of December 31, 1996, by correspondence
with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and the selected
financial information referred to above present fairly, in all
material respects, the financial position of the Sequoia Fund,
Inc. as of December 31, 1996, the results of its operations, the
changes in its net assets and the selected financial information
for the periods indicated, in conformity with generally accepted
accounting principles.
New York, New York
January 18, 1997
21
<PAGE>
SEQUOIA
FUND, INC.
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798
DIRECTORS
William J. Ruane
Richard T. Cunniff
Robert D. Goldfarb
John M. Harding
Francis P. Matthews
C. William Neuhauser
Robert L. Swiggett
OFFICERS
William J. Ruane - Chairman of the Board
Richard T. Cunniff - President
Robert D. Goldfarb - Vice President
Carol L. Cunniff - Vice President
Joseph Quinones, Jr. - Vice President, Secretary &
Treasurer
INVESTMENT ADVISER & DISTRIBUTOR
Ruane, Cunniff & Co., Inc.
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798
CUSTODIAN
The Bank of New York
90 Washington Street
New York, New York 10286
REGISTRAR AND SHAREHOLDER
SERVICING AGENT
DST Systems, Inc.
P.O. Box 419477
Kansas City, Missouri 64141
LEGAL COUNSEL
Seward & Kissel
One Battery Park Plaza
New York, New York 10004
This report has been prepared for the information of shareholders
of Sequoia Fund and is not authorized for distribution to
prospective investors unless preceded or accompanied by an
effective prospectus that includes information regarding the
Fund's objectives, policies, management, records and other
information.
22
69900020.AP5
