Excellence is not confined to any one part of the globe. In volatile economic times, superb companies work hard to prosper whatever their geographic location may be, and they capitalize on whatever circumstances they encounter. The leading chief executive officers of the new century are flexible, opportunistic, and patient, which are admirable traits of good investors as well. An emphasis on shareholder value and timely financial reports, once deemed important by only a handful of world markets, is rapidly gaining momentum. This guide seeks to spotlight excellence and investment potential wherever it may be, and familiarize investors with companies whose stocks are destined to be long-term portfolio leaders. Some of these excellent companies are on a roll and their share prices reflect it, while others are temporarily in down periods that make their shares quite a bargain. I've made a point to include both of these types. Available either as U.S. stocks or foreign stocks trading as American Depositary Receipts (ADRs) on U.S. exchanges, all these companies are easy to find and invest in. Consider each corporate story individually and decide which ones you personally find to be the most compelling.

I have had the opportunity, as financial columnist and television anchor, to talk with many leaders of today's world-beater companies. I've lately observed that new breed of CEO coming to the forefront as we enter the year 2000. This leader has broad professional experience in various parts of the world, makes decisions with a decidedly world view, is aggressive in using technology to further business, and insists on moving quickly. Change is nothing to fear, but something to capitalize upon. No matter what the geographic size or economic potential of the homeland, this executive always demands much more. A student of the strategies of other outstanding companies around the globe, whether in the same field or in others, this executive is dedicated to improving efficiency. There's a prime example of this generation management in the competitive cellular telephone business, where Finland's Nokia Corp., a new addition to our fifty best this year, is run by a shrewd manager who is part of a management team that thinks much more about the future than the past.

On a sunny but chilly March day in Espoo, Finland, with a foot of snow still on the ground, I received a clear indication of the sort of commitment and competitiveness that typifies today's best global companies. At the sparkling two-year-old glass-and-steel headquarters of Nokia, I met with Jorma Ollila, the forty-eight-year-old president and CEO of the company, who chatted with me as he prepared for the following day's annual shareholder meeting. His "embarrassment of riches" was a 75 percent gain in operating profits in the prior year. He wasn't gloating, since gaudy results meant higher expectations at a time when he preferred to focus on the many obstacles he needed to address around the globe. Even the inclusion of his company in this book added more pressure, he mused.

"My daughter, who used to be on the national team for gymnastics in Finland, says that when you do a vault on a balance beam and feel really good about it, you must quickly put it out of your mind or you'll be sure to fall at your next vault," the bespectacled Ollila said with a wry smile. "This company must continue to execute well without becoming complacent and feeling too good about what we've done." Nokia, which prides itself on the youthfulness of its management team, has vaulted to the number one position in its field over Sweden's Ericsson Telephone and the U.S.'s Motorola Inc., thanks to attractive products, savvy bets on technology, and aggressive production goals. Its goal is for 25 to 35 percent annual growth. The company has been listed on the New York Stock Exchange as an ADR since 1994 and, as is the case with an increasing number of popular foreign companies, more than half its shareholders are U.S.-based. Unlike the more typical large, bloated European firms that think only of the "big picture" and have reputations as being overly concerned with opulent management quarters and other perks, Nokia stays lean and thinks of shareholders and prospective customers first. The company is active on all continents, not just in sales, but in building research and development teams, because its Finnish base is quite small. Only about 4 percent of its total sales are derived from Finland. There's no reason to relax in the competitive, high-visibility telecommunications business, Ollila reasons, so the shifting around of key executives keeps everyone on their toes. "If people stay put in positions for years, they become stale, soft, believing too much in their ideas because they're continually mulling the same mixture," Ollila, who's been in charge since 1992, said with a hard edge to his voice. "Changing one's job to another part of the business, even if you've done well where you are, gives a positive shot."

There is just so much you can learn from others, he believes: "In innovation there are American companies that serve as role models, in globalization there are a number of European companies that are pretty good at it, and in product quality there are others well worth watching. But we hope we've been able to demonstrate there is a Nokia way of doing things, because I think being loyal to your own self is important, since an organization quickly notices whenever very alien ideas are being pushed on it."

Each day in the financial news we hear more of the names of corporations that are making a difference in world business and economies. Yet few investors know much about the comparative strengths of these companies other than the fact that one is "really big" or that it might make consumer products they're familiar with. In particular, they don't know how foreign stocks compare to those of the more familiar domestic choices in terms of their nature and growth. Even the designation of "corporation" commonly used after the names of U.S. companies varies elsewhere around the globe. For example, the designation Plc. stands for public limited company in the United Kingdom. Meanwhile, S.A. stands for Société Anonyme in Belgium, France, Luxembourg, and Switzerland, while it represents Sociedad Anomima in Spain and Latin America. A.G. stands for the term Aktiengesellschaft in Austria, Germany, Switzerland, and Liechtenstein. Finally, N.V. stands for Naamioze Vennootschap in Belgium and the Netherlands. All of the companies in this book are worth knowing about and tracking, whatever your home country.

Since daily economic events seem to affect all world markets to some degree, many investors wonder whether international investing is as much of a diversification move as it was in the past. The answer is that there's not as much correlation between the markets as you might think. It's true that on a given day when the U.S. markets tank, that event is often immediately followed by declines in Asia and Europe. On another day, Asia may lead the way with a positive move and is mimicked by a buoyant U.S. market. However, if you take the last ten years or any period over the past fifty years, you'll see scant connection. For example, in recent years the U.S. market went up sharply, while the Tokyo stock market performed disastrously. Recent world stock market results also indicate that markets truly have minds of their own.

You say you've been overcome with joy and capitalistic pride whenever the Dow Jones industrial average has hit another 1000-point benchmark? Don't let your head get too big. The 134-company Helsinki stock market turned in a blistering 52 percent annualized return from 1996 through 1998, more than double the 23 percent average return of the Dow during its record-breaking run. Nokia comprises half the asset value of that exchange. During my visit, I didn't hear any cheering or find confetti on the wood parquet trading floor of the exchange's ornate eighty-eight-year-old Russian-style exchange building that was erected while the country was under the rule of the czars. It is a very quiet place. Trading has been silent in Finland since 1935, when hand-operated keyboards were first used to plug in trades on a large electronic board.

In France, on my trip to the Paris Bourse, I found that its advanced electronic trading system -- now employed by a dozen exchanges around the world -- exudes a similar high-tech silence. On the bourse's fifth-floor monitoring floor, two dozen young people sat at computers examining block trades which either looked unusual or had been reported as such by outside sources. France's 200-year-old outcry trading floor had been open for only a couple of hours each day, so the shift to electronic trading in 1990 and the subsequent move to an anonymous, gray, former bank building meant little culture shock. Paris Bourse officials expect the future to take the form of a pan-European network of exchanges, which can't really become one platform right away because they involve individual governments with many differing securities regulations. Listing nearly 1000 companies, including this book's featured firms AXA-UAP S.A. and TotalFina S.A., the Paris Bourse averaged a 25 percent annualized gain from 1996 through 1998, outperforming the NYSE.

It's true that the U.S. still holds nearly half of the total market capitalization worldwide, but that percentage has been eroding over the past two decades. The United Kingdom weighs in with market capitalization of about 10 percent, followed closely by Japan with about a half-percentage-point less. Germany, France, and Switzerland have about 4 percent apiece, while the Netherlands holds nearly 3 percent.

To give some perspective, here are the ten best-performing stock markets over the five-year period from 1994 through 1998 in dollar terms, along with their percentage of world market capitalization and their largest-cap stocks:

• Finland -- 41 percent five-year annualized return; 0.70 percent of world market capitalization; Nokia.
• Spain -- 28 percent return; 1.51 percent of world; telecommunications company Telefonica de Espana.
• Belgium -- 25 percent return; 0.87 percent of world; financial and insurance services firm Fortis Belgium.
• United States -- 25 percent return; 48.75 percent of world; software maker Microsoft Corp.
• Greece -- 24 percent return; 0.28 percent of world; Hellenic Telecommunication.
• Netherlands -- 24 percent return; 2.94 percent of world; Royal Dutch Petroleum.
• Ireland -- 24 percent return; 0.222 percent of world; Allied Irish Banks.
• Sweden -- 23 percent return; 1.19 percent of world; banking firm Foereningssparbanken A.B.
• Switzerland -- 23 percent return; 3.84 percent of world; pharmaceutical company Roche Holding A.G.
• Italy -- 22 percent return; 2.35 percent of world; oil and natural gas producer ENI Spa.

Proving that the world markets do not move in lockstep, during that same five-year period the market of economically depressed Japan suffered a 4 percent annualized decline, while Thailand, Malaysia, and Pakistan were each down more than 20 percent annually.

Many of the CEOs of the companies in this book are stars in their own right whose pronouncements on world events draw attention. For example, the worst of the global economic downturn was declared in 1999 to be "over" by the results of an annual survey of chief executives conducted by the Business Council, a group made up of active and retired CEOs from 300 of the nation's largest companies. Several CEOs of 1999's 50 best companies, namely Larry Bossidy, retiring chairman of Honeywell International; Ralph Larsen, chairman of Johnson & Johnson; Sanford Weill, co-chairman of Citigroup Inc.; and Jack Welch, chairman of General Electric Co., were members of the council's executive committee who presented those results at the group's two-day meeting in Williamsburg, Virginia, in May 1999. How good do things look? Well, Weill asserted at an upbeat news conference that these are truly "the best of times," with a strong U.S. economy and Asia battling back from the depths. Bossidy said government could help most if it were to "basically, stay out of it." And Welch observed that "I don't see any issues really" in regard to the economy, which seems to be suffering no inflationary pressures whatsoever.

Such leaders also command monetary respect. The William M. Mercer Inc. study of highest-paid executives in 1998 noted that Citigroup's Weill had total direct compensation of $166.9 million, primarily from a $156.6 million gain on option exercises and restricted shares valued at $777,395 at the time of the grant. GE's Welch made $83.6 million, which mostly reflected option gains of $46.5 million and a restricted-stock grant initially valued at $27 million. Coca-Cola's M. Douglas Ivester made $57 million, including nearly $37 million in option gains, a restricted-stock award initially valued at $16.9 million, and $702,000 in long-term incentive payoffs. For 1998, Welch's total shareholder return was by far the strongest of those three, but being a successful CEO isn't a one-year gig.

Even among truly world-class companies, the competitive advantage can vary considerably. For example, because technology changes dramatically, it might take four to six years for a rival making the right moves to overtake Intel Corporation. However, it's been estimated that it would take well-financed competitors more than twenty years to catch up to Coca-Cola Company. Strong market position, solid management, good cash generation, and a focus on return are common attributes of the world's best. This book's companies and their stock have performed well over time. They are steady, long-term performers, dominant in their fields.

Financial strength, value, expansion, competitiveness, consistency, and performance were all considered in putting together this group of companies in a mix that is slightly more foreign than representative of the United States. Since these are very different companies, and competitive advantage varies dramatically among fields, it's a gut-level rather than by-the-numbers process. Watch these companies. They're all proven winners, even though some may win more or win sooner than others. Care has been taken not either to "write off" or to favor regions or stock groups because of current events. These companies for the most part have diversified their efforts globally so that one downturn won't spell disaster for them. In addition, an investor shouldn't write off anything forever. Yes, Asia will come back. After all, it turned from a leader to a laggard, and the reverse will occur. Yes, technology will suffer downturns, but it is, after all, our path to the future and the future is onward and upward. Although bad news can offer opportunity to buy shares at more reasonable prices in the belief that the circumstances leading to their decline will reverse themselves, you should still buy and hold. Don't try to be an active trader in international stocks based on daily, weekly, or monthly events around the globe, because you won't win at that complicated game.

U.S. holdings of foreign securities have taken a big jump since the mid-1990s as investors who have ridden the American bull market look to spread their assets around a bit. As this interest in global investing has accelerated, U.S. brokerage firms have been rapidly expanding their research presence to meet the demands of a global client base. It used to be difficult to find any information about foreign firms, but now there's plenty. In addition, foreign firms have improved their reporting procedures and also produce company materials or Web sites every bit the equal of the best efforts of U.S. firms. In this year's edition of Global Investing, all of the available Internet addresses of the companies are included in the financial data at the end of each chapter.

There is a handful of changes in this 2000 edition versus 1999, in part due to the merger push among global companies. Argentine oil company YPF S.A. was removed from the list after it was acquired by Spain's Repsol S.A., while French oil firm Elf Aquitaine Group S.A. was taken off because it was the target of an unresolved takeover battle as the book was being completed. Mergers also led to two name changes among companies that remain on the list: Siebe Plc. became Invensys Plc. following its merger with the firm BTR Plc., and AlliedSignal Inc. became Honeywell International after its merger with Honeywell Inc. In addition, while I am still confident that previous list members Amway Japan Ltd., Sweden's L. M. Ericsson Telephone Co., Manpower Inc., and Mattel Inc. will prosper going forward, I wanted to freshen up the list and felt several other firms currently have better prospects. So this year's new arrivals are French insurance firm AXA-UAP, IBM, MCI WorldCom, Nokia, British telecommunications firm Vodafone AirTouch Plc., and Wal-Mart Stores. Clearly, a lot is going on among the world's best companies and stocks. This guide is designed to help you sort it all out.