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Selected International Fund, Inc – ‘N-30D’ for 12/31/98

On: Monday, 3/8/99, at 12:27pm ET · For: 12/31/98 · Accession #: 950147-99-195 · File #s: 811-01533, 811-01550 · Correction: This Filing’s “Filed as of” Date was Corrected and “Changed as of” 3/10/99 by the SEC on 4/7/04. `®`

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/08/99  Selected International Fund, Inc  N-30D®     12/31/98    1:113K                                   Imperial Fin’l … Corp/FA

Annual or Semi-Annual Report Mailed to Shareholders — Rule 30d-1
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Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Annualreportfor the Year Ended 12/31/98               44    198K

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                            SELECTED FUNDS

                             ANNUAL REPORT
                         DECEMBER 31, 1998

                                               [SELECTED FUNDS LOGO]

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
Dear Fellow Shareholder:                                                        

1998 was a year when no one, including ourselves, seemed capable of consistently
predicting  the trend of the market.  What lessons did we learn as managers (and
the largest investors in our funds) from the market's volatile  performance last
year?  The first  lesson is that it pays to stay aboard for the long voyage with
stocks inspite of occasional financial hurricanes. It's like being in a sailboat
circling the globe. You've got to ride out whatever storms may come your way.   

The second lesson we learned is that to stay  invested  during  turbulent  times
requires  keeping within a circle of competence.  Our expertise is buying growth
at a value  price based on  rigorous  research.  Research is the North Star that
guides us and gives us the  conviction  to hold fast even when we are  bombarded
with negative information.                                                      

The third lesson is that buying on market dips worked again.  This suggests that
rather than panicking and selling,  it is better to keep on a steady course. One
of the easiest ways to do this is to make  investing a regular  habit through up
and down markets with a program of dollar cost averaging.(1)                    

The fourth  lesson is that the Federal  Reserve  Board (the "Fed") really is the
investor's  friend.  After the  market  declined  20% last  year,  the Fed moved
aggressively to reduce interest rates.(2) With inflation low, the Fed appears to
prefer  nurturing  slow,  continuous  growth  through  attempts to moderate  the
business cycle rather than driving the economy into recession.  This reduces the
risk that corporate earnings might collapse and may help avoid a big collapse in
the stock  market.  Still,  we have to keep in mind that the Fed was prepared to
have a 20% market drop before it acted last year, and it might be willing to let
the market drop 20% again.                                                      

Looking ahead, we are neither totally  bearish nor  euphorically  bullish in the
short run. Stock  valuations  are currently high but, at the same time,  nothing
succeeds like success.  Financial  assets have been successful for investors and
are still benefiting from that momentum. In addition, huge money flows are being
created by baby boomers saving for their  retirement and by central banks around
the world stimulating  money-supply growth. A good bit of this money is spilling
into the financial markets and marking prices up.                               

At the end of the day, we believe the  strength  and  direction  of earnings are
likely to  determine  the market  outlook  in 1999.  But the  crosscurrents  and
variables that could affect earnings are numerous.  What will happen to the U.S.
dollar?  Will the Euro be strong or weak?  Will China  devalue?  Will Japan turn
around? Will the Asian nations find the legal and political resolve to deal with
their huge  overhang of debt?  Will the Fed raise  interest  rates or lower them
further?  What will  happen on the  American  political  scene?  What  about the
potential for year 2000 computer disruptions?                                   

While the market does face a number of potentially  troublesome problems,  there
are few attractive  alternatives to equities.  Moreover, it is still possible to
find good  stocks to put on our  shopping  list  because  we live in a  dynamic,
constantly  changing economy and the American  business model still works.  U.S.
companies are  undergoing  another  round of  restructuring,  consolidation  and
cost-cutting  in order to concentrate on core  businesses,  improve  bottom-line
earnings and raise returns on capital.                                          

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
We approach the job of investing  shareholders'  money and our own pragmatically
with the long-term in mind.  We intend to remain  fairly fully  invested--trying
every day to make sensible  decisions,  rather than getting carried away with an
overly bullish or bearish stance.  We emphasize  firsthand  research and meeting
with company managements so we are prepared to act when opportunities arise. And
we seek to buy stocks at  pressure  points when we  perceive  their  prices have
dipped temporarily.                                                             

If you take a 30-year view of the market,  assume a starting  level of 9,000 for
the Dow and compound  that figure at 7% annually,  the Dow would be at 72,000 in
three decades.  Even if the Dow dropped to 6,000 and you compound that amount at
7% a year, the Dow would reach 48,000 in 30 years. Given those possibilities, we
are not going to make  market  calls,  we are just going to stay  aboard for the
long voyage.(3)                                                                 

Sincerely,                                                                      

/s/ James J. McMonagle                  /s/ Shelby M.C. Davis                   

James J. McMonagle                      Shelby M.C. Davis                       
Chairman                                Chief Investment Officer                

February 19, 1999                                                               

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS                                            

SELECTED AMERICAN SHARES, INC.                                                  

PERFORMANCE OVERVIEW                                                            

+ Selected  American Shares,  Inc.  (Selected  American Shares) provided a total
return of 16.27% for the one-year period ended December 31, 1998 compared with a
return of 28.58% for the S&P 500  Index(4)  and an average  return of 15.61% for
the 768 growth and income funds tracked by Lipper Analytical Services.(5)       

+ From May 6, 1993 through December 31, 1998, the approximate  period that Davis
Selected  Advisers has managed Selected  American Shares, it provided an average
annual total return of 21.53% versus an average  annual return of 17.67% for the
256 funds for that time period in the Lipper growth and income category.(6)     

+ The Fund holds  Morningstar's  highest ***** (five-star) rating for the latest
three-year and five-year  periods and a ****  (four-star)  rating for the latest
10-year period.(7) According to Morningstar, "The fund's core strategy of buying
great companies at fair prices remains intact and so do its prospects."(8)      

AN INTERVIEW WITH CHRISTOPHER C. DAVIS AND KENNETH CHARLES FEINBERG, PORTFOLIO  
MANAGERS                                                                        

Q. How would you describe the Fund's performance in 1998?                       

A. Investors often measure performance on both an absolute and a relative basis.
After  several years of strong  performance  on both counts,  Selected  American
Shares  fired on only one  cylinder in 1998,  as our solid  absolute  return was
overshadowed by the roaring performance of the S&P 500. Ken and I view this as a
disappointing  result,  and while we don't judge ourselves and our  shareholders
don't judge us on short-term  performance,  we can still learn important lessons
by taking a closer look at the factors that contributed to last year's results. 

The  first  contributor  to the  Fund's  disappointing  short-term  results  was
mistakes.  My grandfather Shelby Cullom Davis once said, "If you don't admit you
make mistakes you don't learn from them." It's worth  examining your mistakes so
that if similar  circumstances  arise in the future,  hopefully you won't repeat
the errors.                                                                     

For us as  long-term  investors,  it's not a  mistake  if we buy a stock  and it
subsequently  goes down.  Ken and I recognize  that every stock we purchase will
probably  trade  lower at some point in the future than on the day we bought it.
No one we know is gifted enough to buy the bottom tick in every stock. But it is
a mistake if we buy a stock that subsequently goes down and we don't want to add
to our  position--or  worse,  we want to sell it. If we weren't  mistaken in our
judgment about management or our judgment about the business,  any stock that we
initially  bought  at price of $100 a share,  for  example,  would be much  more
attractive a price of $75 a share.                                              

Our  biggest  mistake  last year  involved  the  Fund's  holdings  in the energy
category. The energy-services  companies we own are among market leaders in that
industry. However, we overestimated how much control a well-run company can have
over its own destiny in an industry with  deteriorating  fundamentals.  As Asian
economies  slowed,  the  demand  for  oil  fell  far  below  levels  that we had
anticipated.  As a result,  oil companies were caught with excess  inventory and
capacity,  putting even more pressure on energy prices.  In such an environment,
major oil  companies  dramatically  reduced  their  exploration  and  production
budgets and,  therefore,  their need for the equipment and services  provided by
the type of companies that we own.                                              

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED                                

AN INTERVIEW WITH CHRISTOPHER C. DAVIS AND KENNETH CHARLES  FEINBERG,  PORTFOLIO
MANAGERS - CONTINUED                                                            

Although  many of these  stocks  have  fallen  significantly,  we do not see the
outlook  brightening  for some time,  and we have sold many of our  positions at
prices  well  below  what we  paid.  While  we  continue  to own  some of  these
companies,  such as  Schlumberger  and  Halliburton,  as core names, we have not
added to them even at these low  prices.(9) We will continue to closely  monitor
them for signs of change,  but we must put our  holdings in this sector into the
category of mistakes.                                                           

Q.  What other factors affected portfolio performance last year?                

A. A second factor  contributing to our disappointing  relative  performance was
not a mistake,  but instead was a direct  result of our  investment  philosophy.
This philosophy  includes a strict price discipline that prevents us from buying
high-flying glamorous growth companies--not because we don't like the companies,
but  because  we don't  like  their high  valuations.  In  particular,  we see a
speculative  bubble developing in Internet stocks where valuations have inflated
to levels  reminiscent  of the biotech craze of the early 1990s and the emerging
markets craze of the mid-1990s.                                                 

Unfortunately, the outstanding performance of just these kinds of glamour stocks
drove the market last year,  and not owning them hurt our relative  performance.
Nevertheless,  we think  that our price  discipline  has served us well over the
years and helped produce strong risk-adjusted  returns for our shareholders.  As
we expect 1999 to be another  extremely  volatile  year,  this  discipline  will
remain at the heart of our investment philosophy.                               

Another  aspect  of our  investment  philosophy  that  contributed  to our mixed
short-term  results was our  fundamental  belief in the  importance of companies
having successful international operations.  Last year, it wasn't fashionable to
have  significant  operations  outside  the  United  States,  and that  hurt the
performance   of   portfolio    holdings   such   as   American    Express   and
Hewlett-Packard.(9)  But the  fact  that  95% of the  world's  population  lives
outside the United States(10) should make it obvious that the ability to operate
globally is a big long-term advantage.                                          

Unlike the category of mistakes  discussed above, our belief in being global and
our price discipline are at the heart of our investment  process,  for better or
for worse. We believe that price must always be an essential  factor in deciding
which  businesses  to buy, just as we think the  competitive  advantage of being
global is a vital consideration. So even if we had last year to live over again,
we would still stick with our price discipline and still value global expertise.

Q.  Could you comment on the Fund's holdings of financial stocks?               

A. Given the poor relative showing of financial stocks last year, some investors
have asked if we consider the Fund's  ownership of many  high-quality  financial
companies to be a mistake.  We do not.  First, we always remember that financial
stocks rarely  perform in a uniform way. For example,  while  companies  such as
BankAmerica and Allstate were down 1% and almost 14%,  respectively,  the shares
of  SunAmerica  and  Progressive  surged  90%  and  41%,  respectively.(9)  More
generally,  however, Ken and I continue to think that favorable demographics,  a
benign interest-rate environment, ongoing consolidation and the globalization of
the financial  industry  combined with  reasonable  valuations make this diverse
sector an attractive area to be invested in.                                    

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED                                

AN INTERVIEW WITH CHRISTOPHER C. DAVIS AND KENNETH CHARLES  FEINBERG,  PORTFOLIO
MANAGERS - CONTINUED                                                            

Another question we often receive concerns the large position we held in General
Re, which was purchased by Berkshire  Hathaway last year. Our current  intention
is to keep the Berkshire  Hathaway  shares we received  from this  merger.(9) My
father,  Ken and I have attended  Berkshire's  annual  meeting in Omaha for many
years and have long admired CEO Warren Buffett and his partner Charles Munger.  

Q.  What is your outlook as we move into the next century?                      

A.  Looking  ahead,  if the market  euphoria  leading  up to the new  millennium
continues,  it is likely  that we will again lag behind  funds that do not use a
price discipline in choosing their stocks.  In such an environment,  we would be
pleased to again achieve good absolute results even if relative results lag.    

Our price  discipline is an important  element in controlling  risk and avoiding
big losses, such as those investors experienced in 1973 and 1974 after a similar
bubble developed in growth stock valuations and was subsequently burst.  Because
our family and  employees  remain  among the  largest  shareholders  of Selected
American  Shares,  we feel it is vital to control risk.  We've often said that a
successful  long-term  investment  record is built as much by  avoiding  the big
losses as by picking the big winners. In the coming years, that theory may again
be put to the test.(11)                                                         

In  addition  to  euphoria,  the  approaching  millennium  may begin to increase
investor  anxiety  regarding   possible  year  2000  computer   problems.   Such
uncertainty  combined  with such  euphoria  promises to create  another  year of
exceptional  volatility  that  will  again  test  investors'  nerves.   Although
short-term results may be extremely volatile, we feel confident that the Fund is
positioned  to weather  any  storm.(11)  We  appreciate  shareholders'  trust in
investing with us.                                                              

SELECTED SPECIAL SHARES, INC.                                                   

PERFORMANCE OVERVIEW                                                            

+    Selected   Special   Shares,   Inc.   (Selected   Special  Shares)  handily
     outperformed  its  small-cap  and mid-cap  benchmarks  last year.  The Fund
     provided a total  return of 24.52% for the 12-month  period ended  December
     31, 1998 while the Lipper Small Company Funds Index  declined 0.85% and the
Wilshire Mid Cap Company Growth Index declined 1.08%.(12)             

+    Unlike many more aggressive small-cap funds,  Selected Special Shares seeks
     to deliver  less  volatile  returns  while  building  long-term  wealth for
     shareholders.  The Fund's  three-  and  five-year  results--average  annual
returns of 20.91% and 18.26%--support this objective.(6)              

+    Morningstar has awarded Selected  Special Shares a performance  rating of 4
     in the Mid-Cap  Growth fund category for the latest  three-year  period.  A
     rating of 4 indicates the Fund has  above-average  return and below-average
risk relative to the other funds in its category.(7)                  

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED                                

PERFORMANCE OVERVIEW - CONTINUED                                                

+    According to Morningstar,  Portfolio Manager Elizabeth  Bramwell's  "unique
     way of seeing things sets her apart.  She looks for big top-line growth and
     P/Es below the growth rates, but also pursues long-term themes, such as the
     outsourcing  trend and companies using  technology to boost  business.  The
     fund's  returns  since  Bramwell's  1994  arrival  now beat the  mid-growth
average by four percentage points per year."(13)                      

AN INTERVIEW WITH ELIZABETH R. BRAMWELL, PORTFOLIO MANAGER                      

Q.  Could you summarize the performance of small-cap and mid-cap stocks in 1998?

A. The  first  half of the  year was a  dazzling  time for the  market  overall,
including  many  small- and  mid-cap  companies.  Then in  mid-July,  the market
sharply  reversed  course as concerns  about  corporate  profits began to mount,
followed by disappointment in a  smaller-than-expected  interest rate cut by the
Federal  Reserve Board in September.  However,  the market came roaring back and
multiples again expanded after the Fed lowered interest rates further in October
and November--thereby signaling that its focus was on global financial stability
and growth, not just fighting inflation.                                        

The  industries  that  were  particularly  attractive  in  the  second  half  of
1998--information  processing,  retailing and financial services--were reflected
in the Fund's top 10 contributors to  appreciation  during that period.  Many of
these  stocks have been held for some time and  include:  Charles  Schwab,  Dell
Computer,  Amazon.com,  Home Depot,  Firstar,  Office Depot, CVS,  Lexmark,  MCI
WorldCom and Imax.(9)                                                           

Q.  What's your outlook for the year ahead?                                     

A. The  macroeconomic  picture remains favorable with virtually no inflation and
the likelihood of flat to lower  interest  rates.  In that scenario,  P/E ratios
should expand and small-cap stocks, in particular,  should benefit.  We also see
the potential for global  synchronized growth toward the end of the year because
of lower interest rates and recent recovery in emerging markets.                

In this  environment,  we continue to look for  companies  with strong  top-line
growth.  Emerging  companies are likely to have new products and services  where
they have pricing  power and the ability to  differentiate  themselves,  thereby
facilitating their achieving  above-average  growth. For companies that actually
deliver  on their  projected  earnings,  we think  the  potential  for  multiple
expansion is high.                                                              

The  potential  for  substantial  gains is the primary  reason to own  small-cap
stocks. Although the Fund is not meant to be an entire investment program, it is
designed  to be a  complementary  component  to  our  large-cap  fund,  Selected
American Shares, in a diversified, long-term investment plan.                   

Q.  Where do you see opportunities today?                                       

A. We  believe  that we are in a period  of  tremendous  advances  in  medicine,
technology and communications. Although some people have worried about year 2000
spending  slowing other  technology  expenditures,  we believe that any deferred
spending  will take off again after  January 1, 2000.  SELECTED  FUNDS P.O.  Box
1688, 124 East Marcy Street Santa Fe, New Mexico 87501                          

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED                                

AN INTERVIEW WITH ELIZABETH R. BRAMWELL, PORTFOLIO MANAGER - CONTINUED          

We think one of the major opportunities going forward will be companies that use
the Internet well.  This would include not only obvious  highly valued  Internet
stocks,  such as  Amazon.com,  but hidden  players as well.  We are  continually
searching for companies that will be beneficiaries  of the Internet  revolution.
This could range from  traditional  retailers that expand into online selling to
companies  that provide  information  processing  services,  such as Paychex and
Computer  Sciences,  two  of the  Fund's  holdings.  For  example,  at  Computer
Sciences,  most of the company's  management  consulting and systems integration
work now includes Internet-enabling facilitation.(9)                            

New Fund investments made in the fourth quarter include Flextronics,  a contract
manufacturer  in the  semiconductor  industry,  and Sepracor,  a  pharmaceutical
separations company with single-isomer versions of several major drugs.(9)      

Outsourcing  is another  strong  investment  theme.  In  addition to Paychex and
Computer Sciences, another outsourcing investment is Robert Half, which provides
accounting  and other  professional  staff.  We think the  company  could have a
particularly  strong  year  because  of the demand for  accounting  services  to
maintain and back up records as we cross through January 1, 2000.(9)            

Financial stocks,  which enjoyed strong gains in the fourth quarter of 1998, are
another  area of  interest.  Here we are  focused on  regional  stocks,  such as
Firstar, Zions Bancorporation and Washington Mutual.(9)                         

Q. How has your strategy  positioned the Fund to benefit from the current market
environment?                                                                    

A. We invest on a stock-by-stock  basis--looking  at such factors as strength of
management and  consistency  of earnings as well as  valuations,  especially the
price/earnings  to growth  [(P/E)/G]  ratio. A primary  strategy is to invest in
stocks at a discount to their  projected  future earnings growth rates or to the
overall market.                                                                 

We estimate that the 1999 earnings growth rate on the Fund's portfolio is 23.6%,
for which we are currently  paying a P/E multiple of 23.4. That gives the Fund a
P/E to growth  ratio of 99%. So the Fund has an estimated  earnings  growth rate
that is four to five times higher than that of the S&P 500 and yet it is selling
at a slight discount to the P/E multiple for the S&P.                           

We think that Selected Special Shares offers an attractively  valued  portfolio,
particularly  relative to the overall market,  and that ultimately  stock prices
move at least in line with their earnings growth.  All in all, we expect 1999 to
be a good year for small- and mid-cap stocks.  Moreover,  given the valuation of
our portfolio,  we think that there is potential for the portfolio's overall P/E
ratio to expand as well, giving shareholders an enhanced investment return.(11) 

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED                                

SELECTED U.S. GOVERNMENT INCOME FUND                                            

PERFORMANCE OVERVIEW                                                            

+    The  Selected  U.S.  Government  Income  Fund seeks to  provide  stable yet
     competitive   current  income  consistent  with  capital   preservation  by
     investing in debt securities  sponsored or issued by the U.S. government or
     its  agencies.(14)   Specifically,   by  emphasizing   investments  in  the
     intermediate range of the bond maturity spectrum,  the Fund seeks to smooth
    out performance and provide stability in a variety of market climates.(15)

+    The Fund  generated a total return of 5.90% for the  one-year  period ended
     December 31, 19986 versus an average return of 7.68% for the funds included
     in  Lipper  Analytical   Services'   Intermediate  U.S.   Government  Funds
category.(5)                                                          

AN INTERVIEW WITH CAROLYN H. SPOLIDORO, PORTFOLIO MANAGER                       

Q. What is the Selected U.S. Government Income Fund's general strategy?         

A. Our strategy is to create a  well-diversified  portfolio in terms of types of
government   securities,   maturity   lengths  and  call   provisions--providing
opportunities to capitalize on different interest-rate environments.  Currently,
the  Fund's  portfolio  is  divided  roughly  equally  between   mortgage-backed
securities,   including  pass-through  securities  and  collateralized  mortgage
obligations (CMOs), and U.S. government agency notes, including some issues that
can be called by the issuer before maturity and some that cannot. Currently, the
portfolio's duration is 4.3 years and its average life is 5.6 years.            

The Fund's  cautious  approach  offers  downside  protection  in declining  bond
markets  but may  underperform  in rising  bond  markets.  In other  words,  the
portfolio  tends  to hold up a bit  better  when  interest  rates  climb  or are
variable.  But the  price we pay for this  stability  is that the Fund  does not
rally as well when rates go down as they did last year.(15)                     

Q.  Could you recap the bond market's performance in 1998?                      

A. If you just look at the numbers  over time,  total  returns were good on most
types of securities last year,  including U.S. government  securities.  However,
that overlooks the volatility the markets experienced starting at the end of the
summer when a liquidity  crisis erupted  because of concerns about the health of
the global economy. This triggered a massive flight to quality and yield spreads
on  fixed-income  securities  widened  dramatically  relative  to U.S.  Treasury
securities.  While the  liquidity  crisis  subsequently  eased and yield spreads
narrowed, spreads are still not as narrow as they were at the beginning of 1998.

This  environment  made  long-term  U.S.  Treasury  securities  one of the  best
fixed-income  investment to own last year.  Long-term Treasuries did much better
than  government  agency  securities,  which,  in  turn,  did much  better  than
mortgages--even  though the quality  differences  among these  various  types of
securities  are fairly  small.  The Fund's  performance  generally  lagged other
intermediate-term U.S. government fund peers because its portfolio is a blend of
intermediate government agency securities and mortgage securities.              

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED                                

AN INTERVIEW WITH CAROLYN H. SPOLIDORO, PORTFOLIO MANAGER - CONTINUED           

Q. How are you positioning the Fund in 1999?                                    

A. We have been  positioning  the Fund to take  advantage  of market  rallies if
interest rates drop further as we anticipate.  Specifically, we have been buying
various  government agency and  mortgage-backed  securities,  always with an eye
toward lengthening  maturity and always carefully weighing the trade-off between
increasing  call  protection  versus  increasing  yield.(9) At the same time, we
recognize the importance of continuing to maintain a disciplined approach with a
diversified,  all-weather  portfolio so that the Fund is  structured  to benefit
from various market conditions.                                                 

Q. Why should investors choose a government bond fund?                          

A. A government bond fund can help create a strong  foundation for any long-term
investment plan. The Selected U.S.  Government Income Fund provides  potentially
higher monthly income than most  short-term  investments and can offer investors
an excellent means of balancing equity holdings with fixed-income  securities of
the highest credit quality.                                                     

----------                                                                      
This annual report is furnished to you by Davis Distributors, LLC, which acts as
the  distributor  for the Selected  Funds.  This annual report is authorized for
distribution  only when  accompanied or preceded by a current  prospectus of the
Selected Funds that contains more  information  about fees and expenses.  Please
read the prospectus carefully before investing or sending money.                

(1)  Neither dollar cost averaging nor any other mechanical system can guarantee
   a profit. Such a plan does not protect against loss in declining markets.
(2)  There  can be no  assurance  that the  Federal  Reserve  Board  will act to
     support  stock prices or that the Federal  Reserve  Board's  actions in the
future might not hurt stock prices.                                   
(3)  This example  illustrates  the power of compounding  over a 30-year period,
     and is not intended to be indicative of future investment results which may
be higher or lower than the assumed rate.                             
(4)  The S&P 500 Index is an unmanaged index of 500 selected common stocks, most
     of which are listed on the New York Stock  Exchange.  The index is adjusted
     for dividends,  weighted  towards stocks with large market  capitalizations
     and  represents  approximately  two-thirds of the total market value of all
     domestic common stocks.  Investments cannot be made directly in the S&P 500
Index.                                                                
(5)  Lipper  Analytical  Services'  rankings and  comparisons are based on total
returns unadjusted for commissions.                                   

9 

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SELECTED FUNDS                                                                  
P.O. Box 1688, 124 East Marcy Street                                            
Santa Fe, New Mexico 87501                                                      
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED                                

(6)  Total  return   assumes   reinvestment   of  dividends   and  capital  gain
     distributions.  Past  performance  is not a  guarantee  of future  results.
     Investment return and principal value will vary so that, when redeemed,  an
investor's shares may be worth more or less than when purchased.      

Average Annual Total Returns as of December 31, 1998 (no sales charge)          

    FUND NAME               1 YEAR    3 YEARS    5 YEARS    10 YEARS
    ---------               ------    -------    -------    --------
Selected American Shares          16.27%     27.77%     22.75%     18.02%       
Selected Special                  24.52%     20.91%     18.26%     15.39%       
Selected US Government Income      5.90%      5.34%      5.69%      7.18%       
Selected Daily Government          4.85%      4.82%      4.64%      5.03%       

(7)  Morningstar   proprietary   ratings   reflect   historical    risk-adjusted
     performance  as of  December  31,  1998.  The ratings are subject to change
     every  month.  Morningstar  ratings are  calculated  from a fund's 3, 5 and
     10-year average annual returns (based on available track records) in excess
     of 90-day Treasury bill (T-bill) returns,  with appropriate fee adjustments
     and a risk  factor that  reflects  fund  performance  below  90-day  T-bill
     returns.  Ten percent of the funds in an investment  category  receive five
     stars; the next 22.5% receive four stars; the next 35% receive three stars;
     the next  22.5%  receive  two  stars;  and the last 10%  receive  one star.
     Selected  American  Shares was rated against 2,802,  1,702 and 732 domestic
equity funds for the three-, five- and 10-year periods, respectively. 

     Like  the  Morningstar  risk-adjusted  rating,  the  category  rating  is a
     quantitative measure of risk-adjusted returns. This three-year rating shows
     how well a fund has balanced risk and return relative to other funds in the
     same  Morningstar  category.  The rating uses the same  methodology  as the
     Morningstar  risk-adjusted  rating.  Unlike the star rating,  however,  the
     category  rating does not reflect  any front- or  back-end  sales  charges.
     Other expenses,  such as 12b-1 fees, are included. As with the Star rating,
five is the best rating and one is the worst.                         
(8)  Source: Morningstar Mutual Funds, December 6, 1998.                        
(9)  Portfolio  holdings and portfolio  manager  opinions cited in this material
     are  current at the time of printing  but are  subject to change.  See each
   Fund's Schedule of Investments for a detailed list of portfolio holdings.
(10) U.S. Census Bureau.                                                        
(11) No price  discipline  or other  method of  controlling  risk can  guarantee
     shareholders  will  not  experience  a  loss.  Past  performance  is  not a
guarantee of future success.                                          
(12) The Lipper Small  Company  Funds Index is comprised of the 30 largest funds
     that,  by prospectus or portfolio  practice,  normally  invest in companies
     with  market  capitalizations  of  less  than  $1  billion  at the  time of
     purchase.  Funds in the index are equally weighted, and returns include the
     reinvestment of all dividends and are net of expenses.  Investments  cannot
be made directly in the index.                                        

     The  Wilshire  Mid  Cap  Company  Growth  Index  is  an  unmanaged,  market
     capitalization-weighted  index of  companies  with  market  capitalizations
     ranging from $826  million to $3.0 billion and with growth  characteristics
     screened by sales growth, return on equity and dividend payout. Investments
cannot be made directly in the index.                                 
(13) Source: Morningstar Mutual Funds, September 6, 1998.                       
(14) There can be no assurance that the Fund will be successful in managing risk
or achieve its investment objective.                                  
(15) Prices of shares will vary, so that when redeemed, an investor's shares may
be worth more or less than their original cost.                       

     An  investment  in the Fund is not a deposit of any bank and is not insured
     or guaranteed by the Federal  Deposit  Insurance  Corporation  or any other
government agency.                                                    

10

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SELECTED AMERICAN SHARES, INC.                                                  
PORTFOLIO HOLDINGS - AT DECEMBER 31, 1998                                       
================================================================================
(The following two tables were depicted as pie charts in the printed material.) 

PORTFOLIO MAKEUP                                  SECTOR WEIGHTINGS     
(% OF FUND NET ASSETS)                             (% OF STOCK HOLDINGS)      
----------------------                             ---------------------      
Preferred Stocks              1.1%        Diversified                       4.5%
Cash & Cash Equivalents       5.5%        Technology                       11.6%
Common Stocks                93.4%        Real Estate                       3.4%
                                          Consumer Products                 5.1%
                                          Electronics                       5.9%
                      Pharmaceutical and
                                            Health Care                     7.0%
                                          Insurance                        13.5%
                                          Other                             9.9%
                                          Food/Beverage                     4.9%
                                          Financial                        13.7%
                                          Building Material                 4.7%
                                          Energy                            4.9%
                                          Bank and Savings and Loan        10.9%

TOP 10 HOLDINGS                                                                 
    STOCK                               SECTOR              % OF FUND NET ASSETS
---------------                         ------              --------------------
Wells Fargo & Co.                   Banks and Savings &                         
                               Loan Associations               5.31%
American Express Co.                Financial                        5.25%      
Hewlett-Packard Company             Technology                       4.72%      
McDonald's Corp.                    Food/Beverage & Restaurant       4.55%      
International Business                                                          
Machines Corporation               Technology                       4.55%     
Berkshire Hathaway, Inc. - CL A     Diversified                      4.23%      
Philip Morris Cos., Inc.            Consumer Products                3.84%      
Citigroup, Inc.                     Financial                        3.58%      
Texas Instruments Inc.              Electronics                      3.56%      
Morgan Stanley, Dean Witter,                                                    
Discover & Co.                     Investment Firms                 3.39%     

11

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SELECTED AMERICAN SHARES, INC.                                                  
PORTFOLIO ACTIVITY - JANUARY 1, 1998 THROUGH DECEMBER 31, 1998                  
================================================================================
NEW POSITIONS ADDED (1/1/98-12/31/98)                                           
(Highlighted Positions are those greater than 0.99% of Net Assets)              

                                                        [Enlarge/Download Table]

                                                                           DATE OF 1ST   % OF 12/31/98  
SECURITY                            SECTOR                                  PURCHASE     FUND NET ASSETS
--------                            ------                                  --------     ---------------
                                                                                                        
American Home Products Corp.        Pharmaceutical and Health Care          11/10/98          0.84%     
Camco International Inc.            Energy                                  05/26/98            --      
Centerpoint Properties Corporation  Private Real Estate                     04/02/98          0.08%     
Donaldson, Lufkin & Jenrette, Inc.  Investment Firms                        10/07/98          0.07%     
DOVER CORP.                         ENERGY                                  03/12/98          2.05%     
HOUSEHOLD INTERNATIONAL, INC.       FINANCIAL                               10/07/98          1.57%     
Micron Technology, Inc.             Electronics                             10/12/98          0.19%     
NORWEST CORPORATION                 BANKS AND SAVINGS & LOAN ASSOCIATIONS   06/17/98            --      
Sealed Air Corporation              Consumer Products                       10/07/98          0.65%     
Swisscom AG                         Telecommunications                      10/05/98            --      
Tyco International Ltd.             Diversified Manufauring                 12/23/98          0.41%     
Union Pacific Cap Trust             Railroad                                03/27/98            --      
UNUM Corp.                          Insurance                               11/25/98          0.54%     
Vulcan Materials Co.                Building Materials                      10/23/98          0.37%     

POSITIONS CLOSED (1/1/98-12/31/98) (Gains and losses greater than $3 million are                        
highlighted)                                                                                            

SECURITY                                   SECTOR             DATE OF FINAL SALE   GAIN/(LOSS)          
--------                                   ------             ------------------   -----------          
360 (DEGREE) COMMUNICATIONS COMPANY        TELECOMMUNICATIONS      04/01/98        $ 5,467,796          
Archer-Daniels-Midland Co.                 Agriculture             06/10/98          2,596,176          
BOEING CO.                                 AEROSPACE               10/16/98        (10,767,911)         
Burlington Resources, Inc.                 Energy                  11/09/98         (2,998,589)         
Crescent Operating, Inc.                   Real Estate             12/10/98         (1,006,883)         
J.P. MORGAN & CO., INC.                    FINANCIAL               09/08/98          5,809,165          
Nabors Industries, Inc.                    Energy                  06/02/98           (947,110)         
NESTLE SA - ADR                            FOOD/BEVERAGE           12/17/98         11,217,677          
Nestle SA                                  Food/Beverage           12/18/98          2,348,118          
NIKE INC.                                  APPAREL                 05/05/98         (7,362,637)         
Novellus Systems, Inc.                     Technology              11/04/98         (1,163,121)         
Qwest Communications International, Inc.   Telecommunications      04/08/98          1,206,700          
SWISSCOM AG                                TELECOMMUNICATIONS      12/11/98         10,040,099          
TCF Financial Corp.                        Financial               10/01/98             (7,804)         
Tyson Foods, Inc.                          Food/Beverage           10/09/98           (160,566)         
UNION PACIFIC CORP.                        RAILROAD                07/16/98         (5,148,825)         
Union Pacific Cap Trust                    Preferred               10/08/98           (255,000)         
Vornado Operating Inc.                     Real Estate             12/09/98            (50,385)         

12

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SELECTED AMERICAN SHARES, INC.                                                  
COMPARISON  OF SELECTED  AMERICAN  SHARES,  INC. AND STANDARD & POOR'S 500 STOCK
INDEX                                                                           
================================================================================
Average Annual Total Return For the Periods ended December 31, 1998.            

  One Year...........................   16.27%
  Five Years.........................   22.75%
  Ten Years..........................   18.02%

$10,000  INVESTED  OVER TEN YEARS.  Let's say you  invested  $10,000 in Selected
American  Shares  ("SAS") on December  31, 1988.  As the chart below  shows,  by
December 31, 1998 the value of your  investment  would have grown to $52,489 - a
424.89%  increase on your initial  investment.  For  comparison,  the Standard &
Poor's 500 Stock Index is also presented on the chart below.                    

(The following table was depicted as a line chart in the printed material.)     

S & P 500        SAS      
---------        ---      
1988     10,000.00     10,000.00            
1989     13,164.00     12,007.41            
1990     12,756.00     11,538.78            
1991     16,635.00     16,876.50            
1992     17,901.00     17,854.09            
1993     19,702.00     18,822.24            
1994     19,962.00     18,220.53            
1995     27,457.00     25,161.54            
1996     33,758.00     32,894.98            
1997     45,017.00     45,143.43            
1998     57,845.00     52,489.39            

Standard  & Poor's  is an  unmanaged  index  which  has no  specific  investment
objective.  Investments  cannot be made directly into the index.  The index used
includes net dividends reinvested.                                              

The  performance  data for  Selected  American  Shares  contained in this report
represents past performance and assumes that all distributions  were reinvested,
and should not be  considered as an  indication  of future  performance  from an
investment in the Fund today.  The  investment  return and principal  value will
fluctuate so that shares may be worth more or less than their original cost when
redeemed.                                                                       

13

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SELECTED SPECIAL SHARES,  INC.                                                  
PORTFOLIO  HOLDINGS - AT DECEMBER 31, 1998                                      
================================================================================
(The following two tables were depicted as pie charts in the printed material.) 

PORTFOLIO MAKEUP                                  SECTOR WEIGHTINGS     
(% OF FUND NET ASSETS)                             (% OF STOCK HOLDINGS)      
----------------------                             ---------------------      
Cash & Cash Equivalents       3.7%        Industrial Products               3.7%
Common Stocks                96.3%        Employee Staffing                 9.7%
                                          Other                             6.7%
                                          Communications                    4.2%
                                          Entertainment/Leisure             4.3%
                                          Health Care                       9.6%
                                          Chemicals                         2.9%
                                          Financial Services               16.2%
                                          Automotive/Heavy Equipment        2.3%
                                          Home/Office Furniture             6.7%
                                          Retailing                        13.2%
                                          Transportation                    2.2%
                                          Information Processing           18.1%

TOP 10 HOLDINGS                                                                 
   STOCK                          SECTOR                    % OF FUND NET ASSETS
---------------                   ------                    --------------------
Computer Sciences Corporation     Information Processing--                      
                           Services                        4.77%
Robert Half International, Inc.   Employee Staffing                3.14%        
The Charles Schwab Corporation    Financial Services               3.12%        
Dell Computer Corporation         Information Processing--                      
                           Office Equipment                3.09%
Sterling Commerce, Inc.           Information Processing--                      
                           Services                        2.71%
Cardinal Health, Inc.             Healthcare                       2.65%        
Kohl's Corporation                Retailing                        2.62%        
On Assignment, Inc.               Employee Staffing                2.50%        
Tiffany & Co.                     Retailing                        2.47%        
Washington Mutual, Inc.           Financial Services               2.44%        

14

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SELECTED SPECIAL SHARES, INC.                                                   
PORTFOLIO ACTIVITY - JANUARY 1, 1998 THROUGH DECEMBER 31, 1998                  
================================================================================
NEW POSITIONS ADDED (1/1/98-12/31/98)                                           
(Highlighted Positions are those greater than 0.99% of Net Assets)              

                                                        [Enlarge/Download Table]

                                                                           DATE OF 1ST   % OF 12/31/98 
SECURITY                               SECTOR                               PURCHASE    FUND NET ASSETS
--------                               ------                               --------    ---------------
                                                                                                       
Abercrombie & Fitch Co.              Retailing                               01/29/98       0.37%      
DA Consulting Group, Inc.            Employee Staffing                       04/24/98       0.61%      
Dril-Quip, Inc.                      Machinery                               01/06/98       --         
Dura Pharmaceuticals, Inc.           Pharmaceutical                          02/09/98       --         
EarthLink Network, Inc.              Communications                          06/17/98       0.60%      
ETHAN ALLEN INTERIORS, INC.          HOME/OFFICE FURNITURE                   04/14/98       1.30%      
Federated Investors, Inc.            Financial Services                      05/13/98       0.96%      
FLEXTRONICS INTERNATIONAL LTD.       ELECTRONICS                             12/07/98       1.36%      
Friede Goldman International, Inc.   Energy                                  01/29/98       0.30%      
FURNITURE BRANDS INTERNATIONAL, INC. HOME/OFFICE FURNITURE                   03/16/98       1.01%      
Galileo International, Inc.          Travel Services                         03/11/98         --       
IMAX CORPORATION                     ENTERTAINMENT/LEISURE TIME              06/08/98       1.67%      
Infinity Broadcasting Corp.          Communications                          12/09/98         --       
Keane, Inc.                          Information Processing - Services       11/25/98       0.86%      
KEEBLER FOODS CO.                    FOOD/BEVERAGE                           04/20/98       1.51%      
LEXMARK INTERNATIONAL GROUP, INC.    INFORMATION PROCESSING - OFFICE EQUIP.  11/09/98       2.12%      
Linens 'n Things, Inc.               Retailing                               02/06/98         --       
The Maxim Group, Inc.                Retailing                               03/13/98         --       
Mercury General Corporation          Insurance                               05/04/98         --       
North Fork Bancorporation, Inc.      Financial Services                      05/29/98       0.89%      
ORBITAL SCIENCES CORPORATION         COMMUNICATIONS                          04/27/98       1.17%      
PAREXEL INTERNATIONAL CORPORATION    HEALTHCARE                              01/23/98       1.31%      
PREMIER PARKS, INC.                  ENTERTAINMENT/LEISURE TIME              03/26/98       1.28%      
Professional Detailing, Inc.         Consulting Services                     05/19/98         --       
Proffitt's Inc.                      Retailing                               06/24/98         --       
SEPRACOR, INC.                       HEALTHCARE                              11/04/98       1.02%      
SPR, Inc.                            Information Processing - Services       05/05/98       0.37%      
STERLING COMMERCE, INC.              INFORMATION PROCESSING - SERVICES       03/11/98       2.71%      
Superior Consultant Holdings Corp.   Consulting Services                     06/17/98         --       
Teleglobe, Inc.                      Communications                          03/27/98       0.76%      

15

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SELECTED SPECIAL SHARES, INC.                                                   
PORTFOLIO ACTIVITY - JANUARY 1, 1998 THROUGH DECEMBER 31, 1998                  
================================================================================
POSITIONS CLOSED (1/1/98-12/31/98)                                              
(Gains and losses greater than $500,000 are highlighted)                        

                                                        [Enlarge/Download Table]

SECURITY                           SECTOR                     DATE OF FINAL SALE  GAIN/(LOSS)
--------                           ------                     ------------------  -----------
                                                                                             
Alkermes, Inc.                     Healthcare                       11/05/98       $  98,924 
American Express Co.               Financial Services               09/11/98         276,559 
Biacore International, AB - ADR    Healthcare                       06/30/98        (245,000)
Black Box Corporation              Electronics                      04/03/98          59,975 
Ciena Corporation                  Communications                   09/17/98        (481,702)
CliniChem Development Inc.         Pharmaceutical                   07/02/98            (188)
Compaq Computer Corporation        Information Processing--                                  
                                    Office Equipment                03/09/98         167,995 
Dril-Quip, Inc.                    Energy                           06/12/98          37,386 
Dura Pharmaceuticals, Inc.         Healthcare                       03/10/98        (351,976)
Fastenal Company                   Industrial Products              05/12/98         287,496 
First Union Corporation            Financial Services               03/26/98         204,089 
Galileo International, Inc.        Travel Services                  10/27/98         (25,619)
Global Marine, Inc.                Energy                           04/15/98         109,587 
Great Plains Software, Inc.        Information Processing-Software  08/11/98         119,360 
Infinity Broadcasting Corp.        Communications                   12/10/98           6,254 
Input/Output, Inc.                 Energy                           08/26/98        (395,429)
KENT ELECTRONICS CORPORATION       ELECTRONICS                      10/14/98        (637,136)
Linens 'n Things, Inc.             Retailing                        10/19/98         109,765 
Littlefuse, Inc.                   Industrial Products              03/19/98         (91,545)
The Maxim Group, Inc.              Retailing                        11/12/98         (69,558)
Mercury General Corporation        Insurance                        10/27/98        (358,645)
Myriad Genetics, Inc.              Healthcare                       07/14/98         (68,752)
NationsBank Corporation            Financial Services               05/27/98         218,931 
Neurex Corporation                 Healthcare                       06/12/98         345,425 
Professional Detailing, Inc.       Consulting Services              06/10/98           8,399 
REGAL CINEMAS, INC.                ENTERTAINMENT/LEISURE TIME       01/23/98         921,939 
Renaissance Worldwide, Inc.        Consulting Services              08/19/98          (9,457)
Rowan Companies, Inc.              Energy                           04/15/98         104,359 
Sealed Air Corporation             Packaging                        07/02/98         190,570 
Superior Consultant Holdings Corp. Consulting Services              12/11/98           8,656 
ThermoQuest Corporation            Industrial Products              10/30/98        (299,690)
Whole Foods Market, Inc.           Retailing                        06/10/98         377,129 

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SELECTED SPECIAL SHARES, INC.                                                   
COMPARISON OF SELECTED SPECIAL SHARES, INC. AND STANDARD & POOR'S 500           
STOCK INDEX                                                                     
================================================================================
Average Annual Total Return For the Periods ended December 31, 1998.            

One Year...........................   24.52%  
Five Years.........................   18.26%  
Ten Years..........................   15.39%  

$10,000  INVESTED  OVER TEN YEARS.  Let's say you  invested  $10,000 in Selected
Special  Shares  ("SSS") on December  31,  1988.  As the chart below  shows,  by
December 31, 1998 the value of your  investment  would have grown to $41,888 - a
318.88%  increase on your initial  investment.  For  comparison,  the Standard &
Poor's 500 Stock Index is also presented on the chart below.                    

(The following table was depicted as a line chart in the printed material.)     

S & P 500        SSS      
---------        ---      
1988     10,000.00     10,000.00            
1989     13,164.00     12,891.28            
1990     12,756.00     12,006.06            
1991     16,635.00     15,063.87            
1992     17,901.00     16,341.26            
1993     19,702.00     18,098.70            
1994     19,962.00     17,652.69            
1995     27,457.00     23,696.66            
1996     33,758.00     26,507.98            
1997     45,017.00     33,639.94            
1998     57,845.00     41,887.73            

Standard  & Poor's  is an  unmanaged  index  which  has no  specific  investment
objective.  Investments  cannot be made directly into the index.  The index used
includes net dividends reinvested.                                              

The  performance  data for  Selected  Special  Shares  contained  in this report
represents past performance and assumes that all distributions  were reinvested,
and should not be  considered as an  indication  of future  performance  from an
investment in the Fund today.  The  investment  return and principal  value will
fluctuate so that shares may be worth more or less than their original cost when
redeemed.                                                                       

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SELECTED U.S. GOVERNMENT INCOME FUND                                            
COMPARISON OF U.S.  GOVERNMENT INCOME FUND AND THE LEHMAN BROTHERS  INTERMEDIATE
TERM U.S. TREASURY SECURITIES INDEX                                             
================================================================================
Average Annual Total Return For the Periods ended December 31, 1998.            

One Year...........................    5.90%  
Five Years.........................    5.69%  
Ten Years..........................    7.18%  

$10,000  INVESTED  OVER  TEN  YEARS.  Let's  say you  invested  $10,000  in U.S.
Government  Income Fund  ("SUSGIF")  on December  31,  1988.  As the chart below
shows,  by December  31, 1998 the value of your  investment  would have grown to
$20,021 - an 100.21% increase on your initial  investment.  For comparison,  the
Lehman  Brothers  Intermediate  Term  U.S.  Treasury  Securities  Index  is also
presented on the chart below.                                                   

(The following table was depicted as a line chart in the printed material.)     

Lehman Index     SUSGIF     
------------     ------     
1988     10,000.00      10,000.00           
1989     11,268.00      10,846.86           
1990     12,345.22      11,772.47           
1991     14,091.29      13,370.91           
1992     15,073.56      14,063.62           
1993     16,317.93      15,176.49           
1994     15,983.86      14,765.45           
1995     18,298.69      17,129.52           
1996     19,024.63      17,617.43           
1997     20,483.08      18,904.91           
1998     22,253.68      20,020.76           

The Lehman  Brothers  Intermediate  Term U.S.  Treasury  Securities  Index is an
unmanaged index which has no specific investment  objective.  Investments cannot
be made directly into the index.                                                

The performance data for Selected U.S.  Government Income Fund contained in this
report  represents  past  performance  and assumes that all  distributions  were
reinvested,  and should not be considered as an indication of future performance
from an investment in the Fund today. The investment  return and principal value
will fluctuate so that shares may be worth more or less than their original cost
when redeemed.                                                                  

18

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED AMERICAN SHARES, INC.                                                  
December  31, 1998                                                              
                                                               VALUE
SHARES                     SECURITY                                 (NOTE 1)    
=============================================================================== 

                                                                [Download Table]

                                                                               
COMMON STOCK - (93.44%)                                                        
BANKS AND SAVINGS & LOAN ASSOCIATIONS - (10.15%)                               
    346,844  Banc One Corporation.............................     $ 17,710,722
    900,834  BankAmerica Corporation..........................       54,162,644
    153,800  Golden West Financial Corporation................       14,101,538
  1,535,302  U.S. Bancorp.....................................       54,503,221
  3,866,560  Wells Fargo & Co.................................      154,420,740
                                                                   ------------
                                                                    294,898,865
                                                                   ------------
BUILDING MATERIALS - (4.38%)                                                   
    930,600  Martin Marietta Materials, Inc...................       57,871,688
  2,040,000  Masco Corporation................................       58,650,000
     81,900  Vulcan Materials Co..............................       10,774,969
                                                                  ------------ 
                                                                    127,296,657
                                                                   ------------
CONSUMER PRODUCTS - (4.80%)                                                    
    190,000  Gillette Co......................................        9,179,375
  2,085,000  Philip Morris Cos., Inc. ........................      111,547,500
    370,700  Sealed Air Corporation*..........................       18,928,869
                                                                   ------------
                                                                    139,655,744
                                                                   ------------
DIVERSIFIED - (4.23%)                                                          
      1,754  Berkshire Hathaway, Inc. - CL A*.................      122,780,000
         16  Berkshire Hathaway, Inc. - CL B*.................           37,600
                                                                   ------------
                                                                    122,817,600
                                                                   ------------
DIVERSIFIED MANUFACTURING - (0.41%)                                            
    160,000  Tyco International Ltd...........................       12,070,000
                                                                   ------------
ELECTRONICS - (5.53%)                                                          
    708,000  Applied Materials, Inc.*.........................       30,222,750
    110,000  Micron Technology, Inc.*.........................        5,561,875
    558,750  Molex Incorporated...............................       21,267,422
  1,210,000  Texas Instruments Inc............................      103,530,625
                                                                   ------------
                                                                    160,582,672
                                                                   ------------
ENERGY - (4.57%)                                                               
    154,880  British Petroleum Company PLC - ADR* (c).........       14,713,600
    423,000  Cooper Cameron Corporation*......................       10,363,500
  1,630,200  Dover Corporation................................       59,706,075
    702,000  Halliburton Co...................................       20,796,750
    244,085  Noble Affiliates, Inc............................        6,010,593
    323,000  Schlumberger Limited.............................       14,898,375
    251,900  Smith International, Inc.*.......................        6,344,731
                                                                   ------------
                                                                    132,833,624
                                                                   ------------
FINANCIAL - (12.84%)                                                           
  1,491,500  American Express Co...............................     152,505,875
  1,100,000  Freddie Mac.......................................      70,881,250
  2,102,095  Citigroup, Inc....................................     104,053,703

19

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED AMERICAN SHARES, INC. - CONTINUED                                      
December  31, 1998                                                              
                                                                     VALUE
SHARES                                 SECURITY                       (NOTE 1)  
================================================================================

                                                                [Download Table]

                                                                                
COMMON STOCK - CONTINUED                                                        
FINANCIAL - CONTINUED                                                           
  1,150,000  Household International, Inc.........................  $ 45,568,750
                                                                    ------------
                                                                     373,009,578
                                                                    ------------
FOOD/BEVERAGE & RESTAURANT - (4.55%)                                            
  1,725,000  McDonald's Corporation...............................   132,178,125
                                                                    ------------
INVESTMENT FIRMS - (3.46%)                                                      
     50,000  Donaldson, Lufkin & Jenrette, Inc....................     2,050,000
  1,387,432  Morgan Stanley, Dean Witter, Discover & Co...........    98,507,672
                                                                    ------------
                                                                     100,557,672
                                                                    ------------
LIFE INSURANCE - (3.68%)                                                        
  1,124,356  SunAmerica, Inc. ....................................    91,213,381
    269,400  UNUM Corporation.....................................    15,726,225
                                                                    ------------
                                                                     106,939,606
                                                                    ------------
PHARMACEUTICAL AND HEALTH CARE - (6.53%)                                        
    435,100  American Home Products Corporation...................    24,501,569
    170,000  Johnson & Johnson....................................    14,258,750
     80,000  Merck & Co., Inc.....................................    11,815,000
    272,000  Novartis AG - ADR....................................    26,735,016

    400,000  Pfizer Inc...........................................    50,175,000
    895,600  SmithKline Beecham PLC - ADR.........................    62,244,200
                                                                    ------------
                                                                     189,729,535
                                                                    ------------
PROPERTY/CASUALTY INSURANCE - (8.94%)                                           
  1,265,028  The Allstate Corporation.............................    48,861,707
    481,250  American International Group, Inc....................    46,500,781
    450,400  Chubb Corporation....................................    29,219,700
    471,700  Progressive Corporation (Ohio).......................    79,895,481
    732,200  Transatlantic Holdings, Inc..........................    55,326,863
                                                                    ------------
                                                                     259,804,532
                                                                    ------------
PUBLISHING - (2.56%)                                                            
    452,800  Gannett Co., Inc.....................................    29,205,600
    286,000  Harcourt General, Inc................................    15,211,625
    134,000  The News Corporation Ltd., Sponsored ADR.............     3,542,625
    400,000  Tribune Co...........................................    26,400,000
                                                                    ------------
                                                                      74,359,850
                                                                    ------------
RAILROAD - (0.82%)                                                              
    394,100  Burlington Northern Santa Fe (c).....................    13,300,875
    202,204  Canadian National Railway Co.........................    10,489,333
                                                                    ------------
                                                                      23,790,208
                                                                    ------------
REAL ESTATE - (3.20%)                                                           
     77,000  Avalonbay Communities, Inc...........................     2,637,250
  1,451,194  Centerpoint Properties Corporation (e)...............    49,068,497
     70,000  Centerpoint Properties Corporation Private (d)(e)....     2,248,531

20

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED AMERICAN SHARES, INC. - CONTINUED                                      
December  31, 1998                                                              

                                                        [Enlarge/Download Table]

                                                                                 VALUE      
SHARES/PRINCIPAL                            SECURITY                            (NOTE 1)    
=========================================================================================== 
COMMON STOCK - CONTINUED                                                                    
REAL ESTATE - CONTINUED                                                                     
                                                                                            
    416,300  Crescent Real Estate Equities Company........................   $    9,574,900 
    165,400  Mack-Cali Realty Corporation.................................        5,106,725 
     54,599  Patriot American Hospitality, Inc............................          327,594 
    713,800  Vornado Realty Trust.........................................       24,090,750 
                                                                             -------------- 
                                                                                 93,054,247 
                                                                             -------------- 
TECHNOLOGY - (10.80%)                                                                       
  2,005,975  Hewlett-Packard Company......................................      137,033,165 
    378,000  Intel Corporation............................................       44,793,000 
    715,000  International Business Machines Corporation..................      132,096,250 
                                                                             -------------- 
                                                                                313,922,415 
                                                                             -------------- 
TELECOMMUNICATIONS - (1.99%)                                                                
    648,000  AirTouch Communications, Inc.*...............................       46,737,000 
    180,000  Motorola, Inc................................................       10,991,250 
                                                                             -------------- 
                                                                                 57,728,250 
                                                                             -------------- 
                 Total Common Stock - (identified                                           
                   cost $1,527,563,880)...................................    2,715,229,180 
                                                                             -------------- 
CONVERTIBLE PREFERRED STOCK - (1.09%)                                                       
     20,600  AirTouch Communications, Inc., 4.25%, Ser. C Conv. Pfd.......        2,121,800 
    230,000  Devon Financing Trust, $3.25, Ser. 144A Conv. Pfd. (b).......       12,650,000 
     25,000  Devon Financing Trust, $3.25, Conv. Pfd. (b).................        1,375,000 
    361,400  Rouse Company, $3.00, Conv. Pfd..............................       15,675,725 
                                                                             -------------- 
                 Total Convertible Preferred Stock--                                        
                   (identified cost $36,077,962)..........................       31,822,525 
                                                                             -------------- 
SHORT TERM INVESTMENTS- (6.08%)                                                             
$16,380,000  Fannie Mae Discount Note, 5.12%, 01/05/99....................       16,370,682 
 21,150,000  Fannie Mae Discount Note, 5.10%, 01/07/99....................       21,132,023 
 19,375,000  Federal Home Loan Bank Discount Note, 5.05%, 01/15/99........       19,336,950 
 17,675,000  Federal Home Loan Bank Discount Note, 5.12%, 01/20/99........       17,627,238 
 19,275,000  Federal Home Loan Bank Discount Note, 4.50%, 01/26/99........       19,214,766 
 16,985,000  Freddie Mac Discount Note, 5.11%, 01/04/99...................       16,977,767 
 22,555,000  Freddie Mac Discount Note, 5.11%, 01/08/99...................       22,532,589 
 19,065,000  Freddie Mac Discount Note, 5.10%, 01/14/99...................       19,029,889 
  9,245,000  Freddie Mac Discount Note, 5.16%, 01/22/99...................        9,217,173 
 13,258,000  Lehman Brothers Repurchase  Agreement, 5.04%,                                  
               01/04/99, dated 12/31/98, repurchase value                                   
               $13,265,424 (collateralized  by $12,819,000                                  
               par value U.S. Treasury Note, 5.875%, 09/30/02,                              
               market value $13,524,045)..................................       13,258,000 
  1,900,000  State Street Bank and Trust Company Repurchase                                 
               Agreement, 4.60%, 01/04/99, dated 12/31/98,                                  
               repurchase value $1,900,971 (collateralized                                  
               by $1,950,000 par value Federal Home Loan Bank,                              
               4.95%, 12/04/00, market value $1,947,563)..................        1,900,000 
                                                                             -------------- 
                 Total Short Term Investments (identified                                   
                   cost $176,597,077).....................................      176,597,077 
                                                                             -------------- 

             Total Investments - (100.61%) - (identified cost                               
               $1,740,238,919) - (a)......................................    2,923,648,782 
             Liabilities Less Other Assets- (0.61%).......................      (17,741,956)
                                                                             -------------- 
                    Net Assets - (100%)...................................   $2,905,906,826 
                                                                             ============== 

* Non-Income Producing Security                                                 

21

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED AMERICAN SHARES, INC. - CONTINUED                                      
December  31, 1998                                                              

                                                                 VALUE
                                                                  (NOTE 1)
================================================================================
(a)  Aggregate  cost for  Federal  Income Tax  purposes  is  $1,740,238,919.  At
December 31, 1998  unrealized  appreciation  (depreciation)  of  securities  for
Federal Income Tax purposes is as follows:                                      

         Unrealized appreciation..............................  $1,198,216,369
          Unrealized depreciation..............................     (14,806,506)
                                                                --------------
                Net unrealized appreciation ..................  $1,183,409,863
                                                                ==============

(b) These  securities  are subject to Rule 144A.  The Board of  Directors of the
Fund has determined  that there is sufficient  liquidity in these  securities to
realize current  valuations.  These securities amounted to $14,025,000 and 0.48%
of the Fund's net assets as of December 31, 1998.                               

(c) Loaned security - See Note 7 of Notes to Financial Statements               

(d) Restricted security - See Note 8 of Notes to Financial Statements.          

(e)  Affiliated  company.  Represents  ownership  of at least  5% of the  voting
securities  of the issuer  and is an  affiliate,  as  defined in the  Investment
Company  Act of 1940,  at or  during  the year  ended  December  31,  1998.  The
aggregate  fair value of the security of affiliated  company held by the Fund as
of December 31, 1998 amounts to $51,317,028.  Transactions  during the period in
which the issuer was an affiliate are as follows:                               

          Shares                            Shares
                     December 31,   Gross      Gross    December 31,  Dividend
 Security              1997      Additions  Reductions    1998        Income
 --------              ----      ---------  ----------    ----        ------
Centerpoint Properties                                                          
  Corporation          1,351,194    100,000       --      1,451,194    2,236,306

Centerpoint Properties                                                          
  Corporation Private         --     70,000       --         70,000       83,790

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED SPECIAL SHARES, INC.                                                   
December  31, 1998                                                              
                                                                     VALUE
SHARES                 SECURITY                                        (NOTE 1) 
================================================================================

                                                                [Download Table]

                                                                               
COMMON STOCK - (96.33%)                                                        
APPAREL - (1.57%)                                                              
     40,000  Cutter & Buck, Inc.*..................................  $1,490,000
                                                                     ----------
AUTOMOTIVE/HEAVY EQUIPMENT - (2.24%)                                           

     32,000  Hays Lemmerz International, Inc.*.....................     966,000
     30,000  Lear Corporation*.....................................   1,155,000
                                                                     ----------
                                                                      2,121,000
                                                                     ----------
CHEMICALS - (2.80%)                                                            
     22,000  Minerals Technologies, Inc............................     900,625
     48,000  OM Group, Inc.........................................   1,752,000
                                                                     ----------
                                                                      2,652,625
                                                                     ----------
COMMUNICATIONS - (4.05%)                                                       
     10,000  EarthLink Network, Inc.*..............................     568,125
     20,000  MCI Worldcom, Inc.*...................................   1,435,000
     25,000  Orbital Sciences Corporation.*........................   1,106,250
     20,000  Teleglobe, Inc........................................     720,000
                                                                     ----------
                                                                      3,829,375
                                                                     ----------
ELECTRONICS - (1.36%)                                                          
     15,000  Flextronics International Ltd.*.......................   1,282,500
                                                                     ----------
EMPLOYEE STAFFING - (9.37%)                                                    
     28,000  DA Consulting Group, Inc.*............................     581,000
     15,000  Data Processing Resources Corporation*................     431,250
     65,000  Interim Services, Inc.*...............................   1,519,375
     50,787  Labor Ready, Inc.*....................................     999,869
     70,000  On Assignment, Inc.*..................................   2,366,875
     66,500  Robert Half International, Inc.*......................   2,971,719
                                                                     ----------
                                                                      8,870,088
                                                                     ----------
ENERGY - (0.93%)                                                               
     25,000  Diamond Offshore Drilling, Inc. ......................     592,188
     25,000  Friede Goldman International, Inc.*...................     284,375
                                                                     ----------
                                                                        876,563
                                                                     ----------
ENTERTAINMENT/LEISURE TIME - (4.11%)                                           
     44,000  Cinar Corporation, Class B*...........................   1,100,000
     50,000  Imax Corporation*.....................................   1,581,250
     40,000  Premier Parks, Inc.*..................................   1,210,000
                                                                     ----------
                                                                      3,891,250
                                                                     ----------
FINANCIAL SERVICES - (15.63%)                                                  
     52,500  The Charles Schwab Corporation........................   2,949,844
     50,100  Federated Investors, Inc..............................     908,063
     20,000  Firstar Corporation...................................   1,865,000
     35,000  LaSalle Partners, Inc.*...............................   1,030,313

23      

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED SPECIAL SHARES, INC. - CONTINUED                                       
December  31, 1998                                                              
                                                                       VALUE
SHARES                              SECURITY                            (NOTE 1)
================================================================================

                                                                [Download Table]

                                                                                
COMMON STOCK - CONTINUED                                                        
FINANCIAL SERVICES - CONTINUED                                                  
     35,000  North Fork Bancorporation, Inc........................  $   837,813
     18,000  Northern Trust Company................................    1,570,500
     60,000  TCF Financial Corporation.............................    1,451,250
     60,500  Washington Mutual, Inc................................    2,310,344
     30,000  Zions Bancorporation..................................    1,871,250
                                                                     -----------
                                                                      14,794,377
                                                                     -----------
FOOD/BEVERAGE - (1.51%)                                                         
     38,100  Keebler Foods Co.*....................................    1,433,513
                                                                     -----------
HEALTHCARE - (9.27%)                                                            
     20,000  BioChem Pharmaceuticals Inc.* - ADR...................      572,500
     33,000  Cardinal Health, Inc..................................    2,503,875
     10,000  Closure Medical Corporation*..........................      297,500
     15,000  Elan Corporation, PLC ADR*............................    1,043,438
     30,000  Focal, Inc*...........................................      285,000
     50,000  PAREXEL International Corporation*....................    1,237,500
     35,000  Quintiles Transnational Corporation*..................    1,865,938
     11,000  Sepracor, Inc.*.......................................      968,688
                                                                     -----------
                                                                       8,774,439
                                                                     -----------
HOME/OFFICE FURNITURE - (6.60%)                                                 
     30,000  Ethan Allen Interiors, Inc............................    1,230,000
     35,000  Furniture Brands International, Inc.*.................      953,750
     30,000  Herman Miller, Inc....................................      802,500
     34,000  HON Industries, Inc...................................      813,875
     25,000  Knoll, Inc.*..........................................      740,625
     77,600  Leggett & Platt, Inc..................................    1,707,200
                                                                     -----------
                                                                       6,247,950
                                                                     -----------
INDUSTRIAL PRODUCTS - (3.60%)                                                   
     20,600  Illinois Tool Works, Inc..............................    1,194,800
     35,156  Molex Inc., Class A...................................    1,120,598
     23,600  Schlumberger  Limited.................................    1,088,550
                                                                     -----------
                                                                       3,403,948
                                                                     -----------
INFORMATION PROCESSING - OFFICE EQUIPMENT - (5.22%)                             
     40,000  Dell Computer Corporation*............................    2,927,500
     20,000  Lexmark International Group, Inc.*....................    2,010,000
                                                                     -----------
                                                                       4,937,500
                                                                     -----------
INFORMATION PROCESSING - SERVICES - (12.24%)                                    
     70,000  Computer Sciences Corporation*........................    4,510,625
     40,000  DST Systems, Inc.*....................................    2,282,906
     20,200  Keane, Inc.*..........................................      806,738
     20,750  Paychex, Inc..........................................    1,067,328

24

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED SPECIAL SHARES, INC. - CONTINUED                                       
December  31, 1998                                                              
                                                                   VALUE
SHARES/PRINCIPAL             SECURITY                                 (NOTE 1)  
================================================================================

                                                                [Download Table]

                                                                               
COMMON STOCK - CONTINUED                                                       
INFORMATION PROCESSING - SERVICES - CONTINUED                                  
     21,000  SPR, Inc.*............................................ $   351,750
     57,000  Sterling Commerce, Inc.*..............................   2,565,000
                                                                    -----------
                                                                     11,584,347
                                                                    -----------
INSURANCE - (1.08%)                                                            
     36,000  Horace Mann Educators Corporation.....................   1,026,000
                                                                    -----------

RETAILING - (12.67%)                                                           
      5,000  Abercrombie & Fitch Co.*..............................     353,750
      1,500  Amazon.com, Inc.*.....................................     481,781
     34,000  CVS Corporation.......................................   1,870,000
     30,000  The Home Depot, Inc...................................   1,835,625
     40,400  Kohl's Corporation*...................................   2,482,075
     50,000  Office Depot, Inc.*...................................   1,846,875
     25,000  Saks Incorporated*....................................     789,063
     45,000  Tiffany & Co..........................................   2,334,375
                                                                    -----------
                                                                     11,993,544
                                                                    -----------
TRANSPORTATION - (2.08%)                                                       
     40,000  Kansas City Southern Industries, Inc..................   1,967,500
                                                                    -----------
                Total Common Stock - (identified                               
                  cost $53,855,924)................................  91,176,519
                                                                    -----------
SHORT TERM INVESTMENTS- (3.21%)                                                
$ 3,035,000  State Street Bank and Trust Co. Repurchase                        
              Agreement, 4.60%, 01/04/99, dated 12/31/98,                      
              repurchase value of $3,036,551 (collateralized                   
              by $3,115,000 par value Federal Home Loan Bank,                  
              4.95%, 12/04/00, market value $3,111,106) -                      
              (identified cost $3,035,000).........................   3,035,000
                                                                    -----------
                 Total Investments - (99.54%) - (identified                    
                   cost $56,890,924) - (a).........................  94,211,519
                 Other Assets Less Liabilities - (0.46%)...........     432,596
                                                                    -----------
                  Net Assets - (100%).............................. $94,644,115
                                                                    ===========

* Non-Income Producing Security.                                                

(a) Aggregate cost for Federal Income Tax purposes is  $56,890,924.  At December
31, 1998 unrealized appreciation (depreciation) of securities for Federal Income
Tax purposes is as follows:                                                     

            Unrealized appreciation..............................  $38,847,456
             Unrealized depreciation..............................   (1,526,861)
                                                                   -----------
                 Net unrealized appreciation ....................  $37,320,595
                                                                   ===========
See Notes to Financial Statements.                                              

25

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED CAPITAL PRESERVATION TRUST -                                           
SELECTED U.S. GOVERNMENT INCOME FUND                                      
December  31, 1998                                                              

                                                        [Enlarge/Download Table]

                                                                                        VALUE  
PRINCIPAL                                        SECURITY                             (NOTE 1) 
===============================================================================================
MORTGAGES - (44.20%)                                                                           
FANNIE MAE POOLS - (3.95%)                                                                     
                                                                                               
   $  2,390  10.00%, 07/01/05, Pool No. 98835......................................  $    2,497
      7,702  10.00%, 08/01/05, Pool No. 99903......................................       8,143
      5,279   8.50%, 07/01/17, Pool No. 51539......................................       5,555
      6,885   8.50%, 04/01/21, Pool No. 117725.....................................       7,242
    216,940   7.50%, 01/01/27, Pool No. 356381.....................................     222,904
                                                                                     ----------
                      Total Fannie Mae - (identified cost $238,838)................     246,341
                                                                                     ----------
FREDDIE MAC POOLS - (6.46%)                                                                    
     96,506   8.00%, 09/01/21, Pool No. D2-7906....................................     100,367
    193,505   8.00%, 10/01/21, Pool No. D2-7334....................................     200,882
     97,626   8.00%, 06/01/22, Pool No. D2-0670....................................     101,348
                                                                                     ----------
                      Total Freddie Mac  - (identified cost $390,094)..............     402,597
                                                                                     ----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION POOLS - (17.09%)                                      
     23,755  10.00%, 09/15/01, Pool No. 265854.....................................      24,673
     14,158   7.00%, 09/20/23, Pool No. 008299 (Adjustable Rate)...................      14,368
     16,695   7.00%, 01/20/24, Pool No. 008360 (Adjustable Rate)...................      16,943
    336,920   6.50%, 02/20/28, Pool No. 002547.....................................     338,393
    342,152   6.50%, 04/15/28, Pool No. 780776.....................................     345,679
    324,413   6.50%, 11/20/28, Pool No. 002673.....................................     325,830
                                                                                     ----------
                      Total GNMA - (identified cost $1,055,624)....................   1,065,886
                                                                                     ----------
COLLATERALIZED MORTGAGE OBLIGATIONS & REAL ESTATE MORTGAGE                                     
INVESTMENT CONDUITS - (16.70%)                                                                 
    500,000  Federal National Mortgage Association, 92-152M, 7.75%, 08/25/07.......     528,590
    500,000  United States Department of Veteran Affairs, Mortgage Trust 1992-1,               
                 7.75%, 07/15/17...................................................     513,125
                                                                                     ----------
                      Total CMOs & REMICs - (identified cost $983,474).............   1,041,715
                                                                                     ----------

                      Total Mortgages - (identified cost $2,668,030)...............   2,756,539
                                                                                     ----------
MEDIUM TERM NOTES - (50.30%)                                                                   
    300,000  Fannie Mae, 6.23%, 07/18/02...........................................     310,266
    350,000  Fannie Mae, 6.57%, 08/22/07...........................................     377,944
    250,000  Fannie Mae, 6.39%, 09/24/07...........................................     266,757
    300,000  Fannie Mae, 6.34%, 02/04/08...........................................     307,407
    350,000  Fannie Mae, 6.00%, 05/15/08...........................................     369,467
    350,000  Federal Farm Credit Bank, 5.79%, 06/23/08.............................     357,381
    239,444  Freddie Mac, 6.50%, 01/01/04..........................................     241,482
    350,000  Freddie Mac, 6.51%, 01/08/07..........................................     375,102

26

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED CAPITAL PRESERVATION TRUST -                                           
SELECTED U.S. GOVERNMENT INCOME FUND - CONTINUED                          
December  31, 1998                                                              
                                                                   VALUE
PRINCIPAL                       SECURITY                              (NOTE 1)  
=============================================================================== 

                                                                [Download Table]

                                                                                
MEDIUM TERM NOTES - CONTINUED                                                   
    $500,000 Freddie Mac, 8.00%, 06/20/11..........................  $  531,330 
                                                                     ---------- 
                   Total Medium Term Notes - (identified cost                   
                      $3,044,681)..................................   3,137,136 
                                                                     ---------- 
SHORT TERM INVESTMENTS- (5.69%)                                                 
     355,000 State Street Corporation Repurchase Agreement,                     
             4.60%, 01/06/99, dated 12/31/99, repurchase                        
             value of $355,272 (collateralized by $365,000                      
             par value Federal Home Loan Bank,  5.03%,                          
             10/29/99, market value $364,658) -                                 
             (identified cost $355,000)............................     355,000 
                                                                     ---------- 

             Total Investments - (100.19%) - (identified                        
               cost $6,067,711) - (a)..............................   6,248,675 
             Liabilities Less Other Assets - (0.19%)...............     (12,042)
                                                                     ---------- 
                      Net Assets - (100%) .........................  $6,236,633 
                                                                     ========== 

(a) Aggregate cost for Federal  Income Tax purposes is  $6,067,711.  At December
31, 1998 unrealized appreciation (depreciation) of securities for Federal Income
Tax purposes is as follows:                                                     

             Unrealized appreciation..............................  $   186,212 
             Unrealized depreciation..............................       (5,248)
                                                                    ----------- 
                      Net unrealized appreciation.................  $   180,964 
                                                                    =========== 

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
SCHEDULE OF INVESTMENTS                                                         
SELECTED CAPITAL PRESERVATION TRUST -                                           
SELECTED DAILY GOVERNMENT FUND                                            
December  31, 1998                                                              

                                                        [Enlarge/Download Table]

                                                                                          VALUE    
PRINCIPAL                                                                               (NOTE 1)   
================================================================================================== 
FANNIE MAE - (11.75%)                                                                              
                                                                                                   
 $ 2,755,000  5.12%, 01/05/99 Discount Note.......................................... $  2,753,433 
   2,305,000  4.80%, 01/08/99 Discount Note..........................................    2,302,849 
   1,305,000  5.07%, 01/08/99 Discount Note..........................................    1,303,713 
   3,610,000  4.83%, 01/27/99 Discount Note..........................................    3,597,407 
   4,890,000  5.03%, 02/05/99 Discount Note..........................................    4,866,087 
                                                                                      ------------ 
                  Total Fannie Mae - (identified cost $14,823,489) ..................   14,823,489 
                                                                                      ------------ 
FEDERAL FARM CREDIT BANK - (3.15%)                                                                 
   3,995,000  4.98%, 02/11/99 Discount Note - (identified cost $3,972,342)...........    3,972,342 
                                                                                      ------------ 
FEDERAL HOME LOAN BANK - (10.66%)                                                                  
   2,090,000  4.78%, 01/13/99 Discount Note..........................................    2,086,670 
   3,085,000  4.78%, 01/22/99 Discount Note..........................................    3,076,398 
   8,360,000  4.65%, 03/02/99 Discount Note..........................................    8,295,210 
                                                                                      ------------ 
                  Total Federal Home Loan Bank - (identified cost $13,458,278).......   13,458,278 
                                                                                      ------------ 
FREDDIE MAC - (74.67%)                                                                             
   3,455,000  5.03%, 01/04/99 Discount Note..........................................    3,453,552 
   5,620,000  5.05%, 01/06/99 Discount Note..........................................    5,616,058 
   2,155,000  5.05%, 01/07/99 Discount Note..........................................    2,153,186 
   4,110,000  5.09%, 01/11/99 Discount Note..........................................    4,104,189 
   5,775,000  5.02%, 01/12/99 Discount Note..........................................    5,766,142 
   4,170,000  5.11%, 01/14/99 Discount Note..........................................    4,162,305 
   7,165,000  4.95%, 01/15/99 Discount Note..........................................    7,151,207 
   1,225,000  5.02%, 01/15/99 Discount Note..........................................    1,222,609 
   3,765,000  4.76%, 01/20/99 Discount Note..........................................    3,755,541 
   6,625,000  5.11%, 01/22/99 Discount Note..........................................    6,605,252 
   5,435,000  5.11%, 01/25/99 Discount Note..........................................    5,416,485 
   1,270,000  5.12%, 01/28/99 Discount Note..........................................    1,265,123 
   4,560,000  5.00%, 01/29/99 Discount Note..........................................    4,542,267 
  10,670,000  4.94%, 02/18/99 Discount Note..........................................   10,599,720 
  12,000,000  5.06%, 02/19/99 Discount Note..........................................   11,917,353 
   2,120,000  4.925%, 02/22/99 Discount Note.........................................    2,104,919 
   2,710,000  5.08%, 02/25/99 Discount Note..........................................    2,688,967 
   3,975,000  4.90%, 02/26/99 Discount Note..........................................    3,944,702 
   7,835,000  5.07%, 02/26/99 Discount Note     .....................................    7,773,207 
                                                                                      ------------ 
                  Total Freddie Mac - (identified cost $94,242,784)..................   94,242,784 
                                                                                      ------------ 

              Total Investments - (100.23%) - (identified cost $126,496,893) - (a)...  126,496,893 
              Liabilities Less Other Assets - (0.23%)................................     (294,385)
                                                                                      ------------ 
                       Net Assets - (100%)........................................... $126,202,508 
                                                                                      ============ 

(a) Aggregate cost for Federal income tax purposes is $126,496,893.             

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
STATEMENT OF ASSETS AND LIABILITIES                                             
At December 31, 1998                                                            

                                                        [Enlarge/Download Table]

========================================================================================================
                                                 SELECTED       SELECTED    U.S. GOVERNMENT     DAILY   
                                                 AMERICAN       SPECIAL         INCOME       GOVERNMENT 
                                                  SHARES         SHARES          FUND           FUND    
                                              --------------   -----------   ------------   ------------
                                                                                                        
ASSETS:                                                                                                 
 Investments in securities, at value * (see                                                             
   accompanying Schedules of Investments)                                                               
   Unaffiliated companies .................   $2,859,010,668   $94,211,519   $  6,248,675   $126,496,893
   Affiliated companies ...................       51,317,028            --             --             --
 Collateral for securities loaned (Note 7)        13,321,086            --             --             --
 Prepaid expenses .........................           77,708         6,985          9,043         10,559
 Cash .....................................          132,770        13,969         42,157         14,392
 Receivables:                                                                                           
   Dividends and interest .................        2,724,252        41,970         61,964             --
   Capital stock sold .....................        2,945,424       885,248            750         30,413
   Due from Adviser .......................               --            --          6,000             --
                                              --------------   -----------   ------------   ------------
 Total assets .............................    2,929,528,936    95,159,691      6,368,589    126,552,257
                                              --------------   -----------   ------------   ------------
LIABILITIES:                                                                                            
 Return of collateral for securities loaned                                                             
 (Note 7) .................................       13,321,086            --             --             --
 Payables:                                                                                              
   Capital stock reacquired ...............        1,839,652        31,411        105,299         10,343
   Investment securities purchased ........        5,961,332       369,125             --             --
 Accrued expenses .........................        2,451,852       115,040         14,426         87,009
 Distributions payable ....................           48,188            --         12,231        252,397
                                              --------------   -----------   ------------   ------------
       Total liabilities ..................       23,622,110       515,576        131,956        349,749
                                              --------------   -----------   ------------   ------------

NET ASSETS ................................   $2,905,906,826   $94,644,115   $  6,236,633   $126,202,508
                                              ==============   ===========   ============   ============

SHARES OUTSTANDING (NOTE 5) ...............       93,247,795     6,410,129        689,837    126,202,508
                                              ==============   ===========   ============   ============
NET ASSET VALUE, offering and                                                                           
 redemption price per share (Net                                                                        
 Assets / shares outstanding) .............   $        31.16   $     14.76   $       9.04   $       1.00
                                              ==============   ===========   ============   ============
NET ASSETS CONSIST OF:                                                                                  
 Paid-in capital ..........................   $1,705,904,429   $56,068,885   $  6,028,088   $126,202,508
 Accumulated net realized gain ............       16,592,534     1,254,635         27,581             --
 Net unrealized appreciation on                                                                         
  investments .............................    1,183,409,863    37,320,595        180,964             --
                                              --------------   -----------   ------------   ------------
                                              $2,905,906,826   $94,644,115   $  6,236,633   $126,202,508
                                              ==============   ===========   ============   ============

* Including  repurchase  agreements of $15,158,000,  $3,035,000 and $355,000 for
Selected American Shares,  Selected Special Shares and Selected U.S.  Government
Income Fund, respectively, and cost of $1,740,238,919,  $56,890,924,  $6,067,711
and $126,496,893 for Selected  American  Shares,  Selected Special Shares,  U.S.
Government Income Fund and Daily Government Fund, respectively.                 

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
STATEMENT OF OPERATIONS                                                         
For the year ended December 31, 1998                                            

                                                        [Enlarge/Download Table]

===================================================================================================
                                               SELECTED       SELECTED  U.S. GOVERNMENT    DAILY   
                                               AMERICAN        SPECIAL      INCOME       GOVERNMENT
                                                SHARES         SHARES        FUND          FUND    
                                             ------------    -----------    --------    ---------- 
                                                                                                   
INVESTMENT  INCOME:                                                                                
Income:                                                                                            
 Dividends                                                                                         
   Unaffiliated companies ................   $ 29,731,676    $   333,850    $     --    $       -- 
   Affiliated companies ..................      2,320,096             --          --            -- 
 Interest ................................      5,111,584        226,123     402,917     6,634,374 
 Lending fees ............................         14,519             --          --            -- 
                                             ------------    -----------    --------    ---------- 
     Total income ........................     37,177,875        559,973     402,917     6,634,374 
                                             ------------    -----------    --------    ---------- 
Expenses:                                                                                          
 Management fees (Note 2) ................     14,793,828        575,453      30,211       364,848 
 Custodian fees ..........................        298,738         22,752       9,369        15,880 
 Transfer agent fees .....................      1,250,108        140,880      13,959        75,437 
 Audit fees ..............................         31,007         16,007       6,955        14,059 
 Legal fees ..............................        122,736         18,308         519        19,975 
 Reports to shareholders .................        392,812         15,841       2,518        24,168 
 Directors fees and expenses .............        322,753          7,598         576        11,453 
 Registration and filing fees ............        197,405         28,368      17,527        30,906 
 Miscellaneous ...........................        205,212         15,762       1,036         7,909 
 Payments under distribution plan                                                                  
  (Note 3) ...............................      6,383,558        208,501      15,105       304,040 
                                             ------------    -----------    --------    ---------- 
     Total expenses ......................     23,998,157      1,049,470      97,775       868,675 
     Expenses paid indirectly (Note 6) ...         (6,794)        (4,105)     (1,141)         (232)
     Reimbursement of expenses by                                                                  
       adviser (Note 2) ..................             --             --      (6,000)           -- 
                                             ------------    -----------    --------    ---------- 
     Net expenses ........................     23,991,363      1,045,365      90,634       868,443 
                                             ------------    -----------    --------    ---------- 
     Net investment income (loss) ........     13,186,512       (485,392)    312,283     5,765,931 
                                             ------------    -----------    --------    ---------- 
REALIZED  AND  UNREALIZED                                                                          
GAIN ON INVESTMENTS:                                                                               
 Net realized gain from                                                                            
   investment transactions ...............     29,504,571      7,077,136      97,915            -- 
 Net increase (decrease) in unrealized                                                             
   appreciation of investments                                                                     
   during the period .....................    345,128,542     11,375,084     (62,420)           -- 
                                             ------------    -----------    --------    ---------- 
     Net realized and unrealized                                                                   
       gain on investments ...............    374,633,113     18,452,220      35,495            -- 
                                             ------------    -----------    --------    ---------- 
   Net increase in net                                                                             
     assets resulting from                                                                         
     operations ..........................   $387,819,625    $17,966,828    $347,778    $5,765,931 
                                             ============    ===========    ========    ========== 

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
STATEMENT OF CHANGES IN NET ASSETS For the year ended December 31, 1998         

                                                        [Enlarge/Download Table]

=================================================================================================== 
                                               SELECTED       SELECTED  U.S. GOVERNMENT    DAILY    
                                               AMERICAN        SPECIAL      INCOME       GOVERNMENT 
                                                SHARES         SHARES        FUND          FUND     
                                             ------------    -----------    --------    ----------  
                                                                                                    
OPERATIONS:                                                                                         
 Net investment income (loss) ........   $   13,186,512    $  (485,392)   $  312,283   $  5,765,931 
 Net realized gains from                                                                            
  investment transactions ............       29,504,571      7,077,136        97,915             -- 
 Net increase (decrease) in unrealized                                                              
  appreciation of investments ........      345,128,542     11,375,084       (62,420)            -- 
                                         --------------    -----------    ----------   ------------ 
 Net increase in net                                                                                
  assets resulting from operations ...      387,819,625     17,966,828       347,778      5,765,931 

DISTRIBUTIONS TO                                                                                    
  SHAREHOLDERS FROM:                                                                                
  Net investment income ..............      (13,186,512)            --      (312,283)    (5,765,931)
  Realized gains from investment                                                                    
    transactions .....................      (23,381,397)    (7,866,840)      (16,994)            -- 
  Dividend in excess of net                                                                         
    investment income ................         (180,435)            --            --             -- 

CAPITAL SHARE TRANSACTIONS                                                                          
 (NOTE 5) ............................      333,180,761      9,613,669       256,546      8,731,677 
                                         --------------    -----------    ----------   ------------ 

Total increase in net assets .........      684,252,042     19,713,657       275,047      8,731,677 

NET ASSETS:                                                                                         

 Beginning of period .................    2,221,654,784     74,930,458     5,961,586    117,470,831 
                                         --------------    -----------    ----------   ------------ 
 End of period .......................   $2,905,906,826    $94,644,115    $6,236,633   $126,202,508 
                                         ==============    ===========    ==========   ============ 

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
STATEMENT OF CHANGES IN NET ASSETS For the year ended December 31, 1997         

                                                        [Enlarge/Download Table]

============================================================================================== 
                                     SELECTED         SELECTED    U.S. GOVERNMENT     DAILY    
                                     AMERICAN          SPECIAL        INCOME        GOVERNMENT 
                                      SHARES           SHARES          FUND           FUND     
                                   ------------      -----------      --------      ---------- 
                                                                                               
OPERATIONS:                                                                                    
 Net investment income (loss) .   $   11,399,273    $  (400,259)   $   346,481    $  5,537,055 
 Net realized gain from                                                                        
  investment transactions .....      141,428,955      2,882,984         21,776              -- 
 Net increase in unrealized                                                                    
  appreciation of investments .      399,055,976     13,446,850         44,190              -- 
                                  --------------    -----------    -----------    ------------ 
 Net increase in net assets                                                                    
  resulting from operations ...      551,884,204     15,929,575        412,447       5,537,055 

DISTRIBUTIONS TO                                                                               
 SHAREHOLDERS FROM:                                                                            

 Net investment income ........      (11,399,273)            --       (346,481)     (5,537,055)
 Realized gains from investment                                                                
   transactions ...............     (153,472,089)    (3,472,560)            --              -- 
 Paid-in capital ..............       (1,360,646)            --             --              -- 

CAPITAL SHARE TRANSACTIONS                                                                     
 (NOTE 5) .....................      459,536,450         37,950     (1,038,054)      4,796,597 
                                  --------------    -----------    -----------    ------------ 
    Total increase (decrease)                                                                  
      in net assets ...........      845,188,646     12,494,965       (972,088)      4,796,597 

NET ASSETS:                                                                                    
 Beginning of period ..........    1,376,466,138     62,435,493      6,933,674     112,674,234 
                                  --------------    -----------    -----------    ------------ 
 End of period ................   $2,221,654,784    $74,930,458    $ 5,961,586    $117,470,831 
                                  ==============    ===========    ===========    ============ 

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
NOTES TO FINANCIAL STATEMENTS                                                   
December 31, 1998                                                               
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                             

    The Selected Funds (the Funds) consist of Selected  American  Shares,  Inc.,
(American Shares,  Inc.), Selected Special Shares, Inc., (Special Shares, Inc.),
and the Selected Capital Preservation Trust (the Trust). The Trust operates as a
series fund,  consisting of the U.S. Government Income Fund and Daily Government
Fund.  The Funds and Trust are registered  under the  Investment  Company Act of
1940, as amended, as diversified,  open-end management investment companies. The
Trust  accounts  separately for the assets,  liabilities  and operations of each
series. The following is a summary of significant  accounting  policies followed
by the Funds in the preparation of financial statements.                        

    American   Shares,   Inc.  and  Special   Shares,   Inc.  are   diversified,
professionally managed stock-oriented funds.                                    

    Selected  U.S.  Government  Income Fund (U.S.  Government  Income)  seeks to
obtain  current  income  consistent  with  preservation  of capital by investing
primarily  in  debt  obligations  of  the  U.S.  Government,   its  agencies  or
instrumentalities.                                                              

    Selected Daily  Government Fund (Daily  Government)  seeks to provide a high
level of current income from short-term money market securities  consistent with
prudent  investment  management,  preservation  of capital  and  maintenance  of
liquidity. It invests in U.S. Government Securities and repurchase agreements in
respect thereto.                                                                

    An investment in any of the Funds,  as with any mutual fund,  includes risks
that vary depending upon the fund's investment objectives and policies. There is
no assurance  that the  investment  objective  of any fund will be  achieved.  A
fund's  return and net asset value will  fluctuate,  although  Daily  Government
seeks to maintain a net asset value of $1.00 per share.                         

A. VALUATION OF SECURITIES - Securities listed on national securities  exchanges
are valued at the last reported sales price on the day of valuation.  Securities
traded in the over the counter  market and listed  securities  for which no sale
was  reported on that date are stated at the last  quoted bid price.  Securities
for which market  quotations are not readily  available are valued at fair value
as determined by the Boards of  Directors/Trustees.  The Daily  Government  Fund
uses the amortized cost method of valuing investment securities which represents
fair value as determined by the Board of Trustees.  These  valuation  procedures
are reviewed and subject to approval by the Board of Directors/Trustees.        

B.  FEDERAL  INCOME  TAXES  - It is  each  fund's  policy  to  comply  with  the
requirements  of the Internal  Revenue Code  applicable to regulated  investment
companies  and  to  distribute  substantially  all  of  its  taxable  income  to
shareholders.  Therefore,  no  provision  for  federal  income or excise  tax is
required.                                                                       

C. USE OF ESTIMATES IN FINANCIAL  STATEMENTS - In preparing financial statements
in conformity with generally accepted  accounting  principles,  management makes
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, as well as the reported amounts of income and expenses
during the reporting period. Actual results may differ from these estimates.    

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SELECTED FUNDS                                                                  
NOTES TO FINANCIAL STATEMENTS - (Continued)                                     
December 31, 1998                                                               
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)               

D.  SECURITIES   TRANSACTIONS  AND  RELATED   INVESTMENT   INCOME  -  Securities
transactions  are accounted for on the trade date (date the order to buy or sell
is  executed)  with  realized  gain  or loss on the  sale  of  securities  being
determined  based upon  identified  cost.  Interest  income is  recorded  on the
accrual basis and dividend income is recorded on the ex-dividend date. Discounts
and premiums on debt  securities  (excluding  convertible  bonds)  purchased are
amortized  over the lives of the  respective  securities in accordance  with the
requirements of the Internal Revenue Code.                                      

E. DIVIDENDS AND  DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to
shareholders  are  recorded  on  the  ex-dividend  date.  The  character  of the
distributions  made during the year from net  investment  income may differ from
its ultimate  characterization for federal income tax purposes. Also, due to the
timing of  distributions,  the fiscal year in which amounts are  distributed may
differ from the fiscal year in which  income or gain was  recorded by the Funds.
The Funds adjust the  classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions determined
in accordance with income tax  regulations.  Accordingly,  for American  Shares,
Inc. during the year ended December 31, 1998 accounts have been  reclassified to
reflect an increase in  undistributed  net  investment  income of  $180,435,  an
increase in accumulated  net realized gain of $564,989 and a decrease in paid-in
capital of $745,424. For Special Shares, Inc. during the year ended December 31,
1998 accounts have been reclassified to reflect an increase in undistributed net
investment  income of $485,392,  a decrease in accumulated  net realized gain of
$400,258 and a decrease in paid-in capital of $85,134.                          

NOTE 2 - INVESTMENT ADVISORY FEES                                               

    Advisory fees are paid monthly to the investment  adviser.  Until January 1,
1999, the rate for American Shares,  Inc. was 0.65% on the first $500 million of
average  net  assets,  0.60% on the next $500  million  and 0.55% of average net
assets in excess of $1 billion.  Effective  January 1, 1999,  the management fee
was reduced to 0.65% on the first $500  million of average net assets,  0.60% of
the average net assets on the next $500 million, 0.55% of the average net assets
on the next $2 billion,  0.54% of the average net assets on the next $1 billion,
0.53% of the average net assets on the next $1 billion, 0.52% of the average net
assets on the next $1  billion,  0.51% of the  average net assets on the next $1
billion and 0.50% of the  average  net assets in excess of $7 billion.  The rate
for  Special  Shares,  Inc.  is 0.70% on the first $50  million of  average  net
assets,  0.675% on the next $100  million,  0.65% on the next $100  million  and
0.60% of  average  net assets in excess of $250  million.  The rate for the U.S.
Government  Income Fund is 0.50% of average  net assets.  The rate for the Daily
Government Fund is 0.30% of average net assets.                                 

    Boston Financial Data Services is the Funds' primary  transfer agent.  Davis
Selected Advisers,  L.P. (the "Adviser") is also paid for certain transfer agent
services.  The fee paid to the Adviser for the year ended  December 31, 1998 was
$162,634,  $18,845, $1,165 and $6,560 for American Shares, Inc., Special Shares,
Inc., U.S. Government Income and Daily Government Funds,  respectively.  Certain
directors/trustees  and  officers of the Funds are also  directors/trustees  and
officers of the general partner of the Adviser.                                 

    The Adviser has agreed to reimburse the U.S.  Government Income Fund for any
expenses in excess of 1.50% of average net assets.                              

    Davis Selected Advisers - NY, Inc. ("DSA-NY"),  a wholly-owned subsidiary of
the Adviser, acts as sub-adviser to the Funds. The Funds pay no fees directly to
DSA-NY.                                                                         

    With respect to Special Shares,  Inc.,  Bramwell  Capital  Management,  Inc.
("Bramwell")  also acts as  sub-adviser  and manages the  day-to-day  investment
operations  for the  fund.  The Fund  pays no fees  directly  to  Bramwell,  who
receives from the Adviser a percentage of the total annual  investment  advisory
fees paid by the Fund to the Adviser.                                           

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SELECTED FUNDS                                                                  
NOTES TO FINANCIAL STATEMENTS - (Continued)                                     
December 31, 1998                                                               
================================================================================
NOTE 2 - INVESTMENT ADVISORY FEES - (Continued)                                 

Each fund has adopted  procedures to treat Shelby Cullom Davis & Co.  ("SCD") as
an affiliate of the Adviser. For American Shares, Inc., SCD received $155,832 in
commissions on the purchases/sales of portfolio securities.                     

NOTE 3 - DISTRIBUTION                                                           

    For services under the distribution agreement,  the Funds pay a fee of 0.25%
of average  daily net assets.  For the year ended  December 31,  1998,  American
Shares,  Inc., Special Shares, Inc., U.S. Government Income and Daily Government
Funds,  incurred  distribution  services  fees  totaling  $6,383,558,  $208,501,
$15,101 and $304,040, respectively.                                             

NOTE 4 - PURCHASES AND SALES OF SECURITIES                                      

    Purchases  and  sales  of  investment   securities   (excluding   short-term
securities) during the year ended December 31, 1998 were as follows:            

                             AMERICAN          SPECIAL       U.S. GOVERNMENT
                       SHARES, INC.     SHARES, INC.        INCOME
                       ------------     ------------        ------

    Cost of purchases...  $705,361,536     $ 37,460,423     $  2,775,309
    Proceeds of sales...  $489,962,814     $ 32,335,025     $  1,996,841

NOTE 5 - CAPITAL STOCK                                                          

    At December  31,  1998,  there were 300 million  shares of capital  stock of
American Shares,  Inc. ($1.25 par value per share)  authorized.  At December 31,
1998,  there were 50 million  shares of capital  stock of Special  Shares,  Inc.
($0.25  par value per  share)  authorized.  At  December  31,  1998,  there were
unlimited shares of capital stock of Selected Capital  Preservation Trust ($0.10
par value per share) authorized. Transactions in capital stock were as follows: 

                                                        [Enlarge/Download Table]

                                                      YEAR ENDED DECEMBER 31, 1998              
                                  ------------------------------------------------------------- 
                                     AMERICAN       SPECIAL           U.S.                      
                                      SHARES         SHARES        GOVERNMENT         DAILY     
                                       INC.           INC.           INCOME         GOVERNMENT  
                                  -------------   ------------    ------------    ------------- 
                                                                                                
Shares sold ...................     29,034,922       2,135,219         192,677       24,255,402 
Shares issued in reinvestment                                                                   
 of distributions .............      1,213,367         527,262          30,016        5,746,130 
                                 -------------    ------------    ------------    ------------- 
                                    30,248,289       2,662,481         222,693       30,001,532 
Shares redeemed ...............    (18,727,709)     (2,004,322)       (194,758)     (21,269,855)
                                 -------------    ------------    ------------    ------------- 
   Net increase ...............     11,520,580         658,159          27,935        8,731,677 
                                 =============    ============    ============    ============= 

Proceeds from shares sold .....  $ 829,939,241    $ 29,840,446    $  1,747,977    $  24,255,402 
Proceeds from shares issued in                                                                  
  reinvestment of distributions     35,183,278       7,182,421         271,717        5,746,130 
                                 -------------    ------------    ------------    ------------- 
                                   865,122,519      37,022,867       2,019,694       30,001,532 
Cost of shares redeemed .......    (27,409,198)     (1,763,148)    (21,269,855)    (531,941,758)
                                 -------------    ------------    ------------    ------------- 
   Net increase ...............  $ 333,180,761    $  9,613,669    $    256,546    $   8,731,677 
                                 =============    ============    ============    ============= 

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SELECTED FUNDS                                                                  
NOTES TO FINANCIAL STATEMENTS - (Continued)                                     
December 31, 1998                                                               

                                                        [Enlarge/Download Table]

================================================================================================
NOTE 5 - CAPITAL STOCK - (Continued)                                                            

                                                       YEAR ENDED DECEMBER 31, 1998             
                                   -------------------------------------------------------------
                                      AMERICAN       SPECIAL           U.S.                     
                                       SHARES         SHARES        GOVERNMENT         DAILY    
                                        INC.           INC.           INCOME         GOVERNMENT 
                                   -------------   ------------    ------------    -------------
                                                                                                
Shares sold ...................      25,462,064         617,322          39,980      14,694,975 
Shares issued in reinvestment                                                                   
 of distributions .............       5,681,154         313,915          31,978       3,596,735 
                                  -------------    ------------    ------------    ------------ 
                                     31,143,218         931,237          71,958      18,291,710 
Shares redeemed ...............     (13,357,448)       (911,431)       (188,979)    (13,495,113)
                                  -------------    ------------    ------------    ------------ 
   Net increase ...............      17,785,770        (117,021)      4,796,597          19,806 
                                  =============    ============    ============    ============ 

Proceeds from shares sold .....   $ 640,917,425    $  7,637,165    $    356,629    $ 14,694,975 
Proceeds from shares issued in                                                                  
  reinvestment of distributions     148,002,730       3,227,796         284,113       3,596,735 
                                  -------------    ------------    ------------    ------------ 
                                    788,920,155      10,864,961         640,742      18,291,710 
Cost of shares redeemed .......    (329,383,705)    (10,827,011)     (1,678,796)    (13,495,113)
                                  -------------    ------------    ------------    ------------ 
   Net increase ...............   $ 459,536,450    $     37,950    $ (1,038,054)   $  4,796,597 
                                  =============    ============    ============    ============ 

NOTE 6 - CUSTODIAN FEES                                                         

    Under an agreement with the custodian bank,  each fund's  custodian fees are
reduced for earnings on cash balances  maintained at the custodian by the Funds.
Such reductions amounted to $6,794, $4,105, $1,141 and $232 for American Shares,
Inc.,  Special  Shares,  Inc.,  U.S.  Government  Income  and Daily  Government,
respectively.                                                                   

NOTE 7 - SECURITIES LOANED                                                      

    American  Shares,  Inc.  (the "Fund") has entered into a securities  lending
arrangement with  PaineWebber,  Inc. Under the terms of the agreement,  the Fund
receives  fee income  from  lending  transactions;  in  exchange  for such fees,
PaineWebber,  Inc.  is  authorized  to loan  securities  on  behalf of the Fund,
against  receipt of  collateral  at least  equal to the value of the  securities
loaned.  Cash collateral is invested by the Adviser in money market instruments.
As of December 31, 1998, the Fund had on loan securities  valued at $12,930,000;
cash of  $13,321,086  was  received  as  collateral  for the  loans and has been
invested in approved  instruments.  The Fund bears the risk of any deficiency in
the amount of the collateral available for return to a borrower due to a loss in
an approved investment.                                                         

NOTE 8 - RESTRICTED SECURITIES                                                  

    Restricted  securities are not  registered  under the Securities Act of 1933
and may have contractual  restrictions on resale.  They are valued under methods
approved by the Board of Directors as reflecting fair value. The aggregate value
of restricted  securities in American Shares,  Inc. was $2,248,531,  or 0.07% of
the  net  assets  of  December  31,  1998.   Information  concerning  restricted
securities is as follows:                                                       

                                                        [Enlarge/Download Table]

                                                     Number of               Valuation per Unit as
Fund         Security              Acquisition Date   Shares   Cost per Unit of December  31, 1998
----         --------              ----------------   ------   ------------- ---------------------
                                                                                                  
American     Centerpoint Properties                                                               
Shares, Inc. Corp. Private             04/02/98       70,000      $33.375          $32.121875     

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SELECTED FUNDS                                                                  
FINANCIAL HIGHLIGHTS                                                            
SELECTED AMERICAN SHARES, INC.                                                  
================================================================================
The following financial  information  represents selected data for each share of
capital stock outstanding throughout each period:                               

                                                                [Download Table]

                                                YEAR ENDED DECEMBER 31,         
                                        --------------------------------------  
                                         1998    1997    1996    1995    1994   
                                         ----    ----    ----    ----    ----   
                                                                                
Net Asset Value, Beginning of Period .. $27.18  $21.53  $17.68  $13.09  $14.59  
                                        ------  ------  ------  ------  ------  
INCOME FROM INVESTMENT OPERATIONS                                               
 Net Investment Income ................    .15     .16     .18     .22     .20  
 Net Realized and Unrealized                                                    
    Gains (Losses) ....................   4.24    7.72    5.15    4.74    (.66) 
                                        ------  ------  ------  ------  ------  
    Total From Investment Operations ..   4.39    7.88    5.33    4.96    (.46) 

DIVIDENDS AND  DISTRIBUTIONS                                                    
 Dividends from Net Investment Income .   (.15)   (.17)   (.17)   (.22)   (.20) 
 Distributions from Realized Gains ....   (.26)  (2.05)  (1.31)   (.15)   (.83) 
 Dividends in Excess of Net                                                     
    Investment Income .................     --    (.01)     --      --    (.01) 
                                        ------  ------  ------  ------  ------  
    Total Dividends and Distributions .   (.41)  (2.23)  (1.48)   (.37)  (1.04) 
                                        ------  ------  ------  ------  ------  

Net Asset Value, End of Period ........ $31.16  $27.18  $21.53  $17.68  $13.09  
                                        ======  ======  ======  ======  ======  

TOTAL RETURN(1) .......................  16.27%  37.25%  30.74%  38.09%  (3.20)%

RATIOS/SUPPLEMENTAL DATA                                                        
 Net Assets, End of Period                                                      
  (000,000 omitted) ................... $2,906  $2,222  $1,376  $  926  $  529  
 Ratio of Expenses to Average                                                   
  Net Assets ..........................    .94%    .96%   1.03%   1.09%   1.26% 
 Ratio of Net Investment Income to                                              
  Average Net Assets ..................    .52%    .62%    .87%   1.42%   1.42% 
 Portfolio Turnover Rate(2) ...........     20%     26%     29%     27%     23% 

(1) Assumes hypothetical initial investment on the business day before the first
    day of the fiscal period, with all dividends and distributions reinvested in
    additional shares on the reinvestment  date, and redemption at the net asset
value calculated on the last business day of the fiscal period.         

(2) The  lesser of  purchases  or sales of  portfolio  securities  for a period,
    divided by the monthly  average of the market value of portfolio  securities
    owned during the period.  Securities  with a maturity or expiration  date at
    the  time  of  acquisition  of one  year  or  less  are  excluded  from  the
calculation.                                                            

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
FINANCIAL HIGHLIGHTS                                                            
SELECTED SPECIAL SHARES, INC.                                                   
================================================================================
The following financial  information  represents selected data for each share of
capital stock outstanding throughout each period:                               

                                                        [Enlarge/Download Table]

                                                           YEAR ENDED DECEMBER 31,                 
                                               ------------------------------------------------    
                                                 1998        1997      1996      1995   1994(3)    
                                                 ----        ----      ----      ----   -------    
                                                                                                   
Net Asset Value, Beginning of Period ......... $ 13.03     $ 10.89   $ 10.80   $  9.02  $ 10.20    
                                               -------     -------   -------   -------  -------    
INCOME FROM INVESTMENT OPERATIONS                                                                  
 Net Investment Loss .........................    (.08)       (.07)       --        --     (.03)   
 Net Realized and Unrealized                                                                       
  Gains (Losses) .............................    3.14        2.83      1.27      3.04     (.22)   
                                               -------     -------   -------   -------  -------    
    Total From Investment Operations .........    3.06        2.76      1.27      3.04     (.25)   

DIVIDENDS AND DISTRIBUTIONS                                                                        
 Distributions from Realized Gains ...........   (1.33)       (.62)    (1.18)    (1.26)    (.93)   
                                               -------     -------   -------   -------  -------    
    Total Dividends and                                                                            
Distributions ................................   (1.33)       (.62)    (1.18)    (1.26)    (.93)   
                                               -------     -------   -------   -------  -------    

Net Asset Value, End of Period ............... $ 14.76     $ 13.03   $ 10.89   $ 10.80  $  9.02    
                                               =======     =======   =======   =======  =======    

TOTAL RETURN(1) ..............................   24.52%      26.91%    11.86%    34.24%   (2.56)%  

RATIOS/SUPPLEMENTAL DATA                                                                           
 Net Assets, End of Period (000 omitted) ..... $94,644     $74,930   $62,435   $58,975  $47,275    
 Ratio of Expenses to Average Net Assets .....    1.26%(4)    1.28%     1.33%     1.48%    1.41%(2)
 Ratio of Net Investment Loss to Average                                                           
    Net Assets ...............................    (.58)%      (.60)%    (.66)%    (.58)%   (.27)%  
 Portfolio Turnover Rate(5) ..................      41%         51%       98%      127%      99%   

(1) Assumes hypothetical initial investment on the business day before the first
    day of the fiscal period, with all dividends and distributions reinvested in
    additional shares on the reinvestment  date, and redemption at the net asset
value calculated on the last business day of the fiscal period.         

(2) Had the Adviser not absorbed certain expenses, the ratio of expenses for the
year ended  December  31, 1994 would have been  1.62%.                  

(3) Per share data has been  restated to give effect to a 2 for 1 stock split to
shareholders of record as of the close of January 4, 1994.              

(4) Ratio of expenses to average net assets  after the  reduction  of  custodian
    fees under a custodian agreement was 1.25% for the period ended December 31,
1998.                                                                   

(5) The  lesser of  purchases  or sales of  portfolio  securities  for a period,
    divided by the monthly  average of the market value of portfolio  securities
    owned during the period.  Securities  with a maturity or expiration  date at
    the  time  of  acquisition  of one  year  or  less  are  excluded  from  the
calculation.                                                            

SEE NOTES TO FINANCIAL STATEMENTS                                               

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SELECTED FUNDS                                                                  
FINANCIAL HIGHLIGHTS                                                            
SELECTED U.S. GOVERNMENT INCOME FUND                                            
================================================================================
The following financial  information  represents selected data for each share of
capital stock outstanding throughout each period:                               

                                                        [Enlarge/Download Table]

                                                           YEAR ENDED DECEMBER 31,                
                                            --------------------------------------------------    
                                             1998         1997      1996      1995       1994     
                                                                                                  
Net Asset Value, Beginning of Period ...... $ 9.01      $  8.90    $ 9.20    $ 8.45    $  9.20    
                                            ------      -------    ------    ------    -------    
INCOME FROM INVESTMENT OPERATIONS                                                                 
 Net Investment Income ....................    .47          .51       .53       .54        .50    
  Net Realized and Unrealized                                                                     
    Gains (Losses) ........................    .06          .11      (.28)      .78       (.75)   
                                            ------      -------    ------    ------    -------    
  Total From Investment Operations ........    .53          .62       .25      1.32       (.25)   

DIVIDENDS AND DISTRIBUTIONS                                                                       
 Dividends from Net Investment Income .....   (.47)      (.51))      (.53)     (.54)      (.50)   
 Distributions from Realized Gains ........   (.03)          --      (.02)     (.03)        --    
                                            ------      -------    ------    ------    -------    
    Total Dividends and Distributions .....   (.50)        (.51)     (.55)     (.57)      (.50)   
                                            ------      -------    ------    ------    -------    

Net Asset Value, End of Period ............ $ 9.04      $  9.01    $ 8.90    $ 9.20    $  8.45    
                                            ======      =======    ======    ======    =======    

TOTAL RETURN(1) ...........................   5.90%        7.32%     2.85%    15.97%     (2.71)%  

RATIOS/SUPPLEMENTAL DATA                                                                          
 Net Assets, End of Period                                                                        
  (000 omitted) ........................... $6,237      $ 5,962    $6,934    $7,811    $10,263    
 Ratio of Expenses to Average                                                                     
  Net Assets ..............................   1.52%(2,3)   1.50%(2)  1.44%(2)  1.44%(2)   1.42%(2)
 Ratio of Net Investment Income to                                                                
    Average Net Assets ....................   5.17%        5.79%     5.96%     6.09%      5.70%   
                                                                                            16%   
 Portfolio Turnover Rate(4) ...............     36%          16%       26%       76%        65%   

(1) Assumes hypothetical initial investment on the business day before the first
    day of the fiscal period, with all dividends and distributions reinvested in
    additional shares on the reinvestment  date, and redemption at the net asset
value calculated on the last business day of the fiscal period.         

(2) Had the Adviser not absorbed certain expenses, the ratio of expenses for the
    years ended  December 31, 1994,  1995,  1996,  1997 and 1998 would have been
1.69%, 1.58%, 1.67%, 1.60% and 1.62%, respectively.                     

(3) Ratio of expenses to average net assets  after the  reduction  of  custodian
    fees under a custodian agreement was 1.50% for the period ended December 31,
1998.                                                                   

(4) The  lesser of  purchases  or sales of  portfolio  securities  for a period,
    divided by the monthly  average of the market value of portfolio  securities
    owned during the period.  Securities  with a maturity or expiration  date at
    the  time  of  acquisition  of one  year  or  less  are  excluded  from  the
calculation.                                                            

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
FINANCIAL HIGHLIGHTS                                                            
SELECTED DAILY GOVERNMENT FUND                                                  
================================================================================
The following financial  information  represents selected data for each share of
capital stock outstanding throughout each period:                               

                                                        [Enlarge/Download Table]

                                                          YEAR ENDED DECEMBER 31,           
                                           -----------------------------------------------  
                                             1998       1997     1996      1995       1994  
                                             ----       ----     ----      ----       ----  
                                                                                            
Net Asset Value, Beginning of Period ..... $  1.000  $  1.000  $  1.000  $  1.000  $  1.000 
                                           --------  --------  --------  --------  -------- 
INCOME FROM INVESTMENT OPERATIONS                                                           
 Net Investment Income ...................     .047      .048      .046      .051      .034 

DIVIDENDS AND DISTRIBUTIONS                                                                 
 Dividends from Net Investment Income ....    (.047)    (.048)    (.046)    (.051)    (.034)
                                           --------  --------  --------  --------  -------- 

Net Asset Value, End of Period ........... $  1.000  $  1.000  $  1.000  $  1.000  $  1.000 
                                           ========  ========  ========  ========  ======== 

TOTAL RETURN(1) ..........................     4.85%     4.91%     4.70%     5.23%     3.51%

RATIOS/SUPPLEMENTAL DATA                                                                    
 Net Assets, End of Period                                                                  
  (000 omitted) .......................... $126,203  $117,471  $112,674  $184,603  $121,886 
 Ratio of Expenses to Average                                                               
  Net Assets .............................      .71%      .70%      .75%    .75%2     .75%2 
 Ratio of Net Investment Income                                                             
    to Average Net Assets ................     4.74%     4.80%     4.62%     5.13%     3.44%

(1) Assumes hypothetical initial investment on the business day before the first
    day of the fiscal period, with all dividends and distributions reinvested in
    additional shares on the reinvestment  date, and redemption at the net asset
value calculated on the last business day of the fiscal period.         

(2) Had the Adviser not absorbed certain expenses, the ratio of expenses for the
    years ended  December  31,  1994 and 1995 would have been,  1.07% and 0.78%,
respectively.                                                           

See Notes to Financial Statements.                                              

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SELECTED FUNDS                                                                  
INCOME TAX INFORMATION (UNAUDITED)                                              
December 31, 1998                                                               
================================================================================
    In early 1999, shareholders will receive information regarding all dividends
and  distributions  paid  to  them  by the  funds  during  calendar  year  1998.
Regulations  of the U.S.  Treasury  Department  require the funds to report this
information to the Internal Revenue Service.                                    

SELECTED AMERICAN SHARES, INC.                                                  

    Distributions  of $0.41  per  share  were paid to  shareholders  during  the
calendar  year  1998,  of  which  $0.26  was   designated  as  a  "capital  gain
distribution"  for federal  income tax  purposes.  Whether  received in stock or
cash, the capital gain distribution  should be treated by shareholders as a gain
from the sale of capital assets held for more than one year  (long-term  capital
gains).                                                                         

    Dividends paid by the Fund during the calendar year ended 1998 which are not
designated as capital gain distributions  should be multiplied by 100% to arrive
at the net amount eligible for the corporate dividend-received deduction.       

SELECTED SPECIAL SHARES, INC.                                                   

    Distributions  of $1.325  per share  were paid to  shareholders  during  the
calendar  year  1998,  of  which  $1.255  was  designated  as  a  "capital  gain
distribution"  for federal  income tax  purposes.  Whether  received in stock or
cash, the capital gain distribution  should be treated by shareholders as a gain
from the sale of capital assets held for more than one year  (long-term  capital
gains).                                                                         

    None of the  dividends  paid by the Fund during the calendar year ended 1998
are eligible for the corporate dividend-received deduction.                     

SELECTED U.S. GOVERNMENT INCOME FUND                                            

    Distributions  of $0.49013  per share were paid to  shareholders  during the
calendar  year  1998,  of  which  $0.025  was  designated  as  a  "capital  gain
distribution"  for federal  income tax  purposes.  Whether  received in stock or
cash, the capital gain distribution  should be treated by shareholders as a gain
from the sale of capital assets held for more than one year  (long-term  capital
gains).                                                                         

    None of the  dividends  paid by the Fund during the calendar year ended 1998
are eligible for the corporate dividend-received deduction.                     

    The foregoing  information is presented to assists shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal  regulations  which may affect your individual tax
return and the many variations in state and local regulations, we recommend that
you consult your tax adviser for specific guidance.                             

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SELECTED FUNDS                                                                  
INDEPENDENT AUDITORS' REPORT                                                    
================================================================================
To the Shareholders and Board of Directors/Trustees                             
of Selected American Shares, Inc., Selected Special Shares, Inc. and Selected   
Capital Preservation Trust:                                                     

        We have audited the accompanying  statement of assets and liabilities of
Selected American Shares,  Inc., Selected Special Shares,  Inc., U.S. Government
Income Fund and Daily  Government Fund including the schedules of investments as
of December 31, 1998 and the related  statement of operations,  the statement of
changes in net assets,  and the  financial  highlights  for the year then ended.
These financial  statements and financial  highlights are the  responsibility of
the  Funds'  management.  Our  responsibility  is to express an opinion on these
financial  statements and financial highlights based on our audit. The statement
of changes in net assets for the year ended  December 31, 1997 and the financial
highlights for each of the years in the four-year period ended December 31, 1997
were audited by other auditors  whose report dated February 13, 1998,  expressed
an unqualified opinion on this information.                                     

        We conducted our audit 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  financial
highlights 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, 1998, by correspondence  with the custodian and brokers;  and where
confirmations  were not  received  from  brokers,  we performed  other  auditing
procedures.  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  audit  provides  a
reasonable basis for our opinion.                                               

        In our  opinion,  the  financial  statements  and  financial  highlights
referred to above  present  fairly,  in all  material  respects,  the  financial
position of Selected American Shares,  Inc., Selected Special Shares, Inc., U.S.
Government  Income Fund and Daily  Government  Fund as of December 31, 1998, the
results of operations,  the changes in net assets, and the financial  highlights
for the year then  ended,  in  conformity  with  generally  accepted  accounting
principles.                                                                     

                                                      KPMG LLP

Denver, Colorado                                                                
February  5, 1999                                                               

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SELECTED                              
FUNDS                               

124 East Marcy Street Santa Fe, New Mexico 87501                            

=======================================================                         
DIRECTORS                    OFFICERS                                           
William P. Barr              James J. McMonagle                                 
Floyd A. Brown                 CHAIRMAN                                         
Andrew A. Davis              Shelby M.C. Davis                                  
Christopher C. Davis           PRESIDENT                                        
Jerome Hass                  Kenneth C. Eich                                    
James J. McMonagle             VICE PRESIDENT                                   
Katherine L. MacWilliams     Sharra L. Reed                                     
Richard O'Brien               VICE PRESIDENT, TREASURER                         
Larry Robinson                & ASSISTANT SECRETARY                             
Marsha Williams              Thomas D. Tays                                     
VICE PRESIDENT    
& SECRETARY       
Arthur Don            
 ASSISTANT SECRETARY
Sheldon R. Stein      
 ASSISTANT SECRETARY

INVESTMENT ADVISER                                                              
Davis Selected  Advisers, L.P.                                                  
124 East Marcy Street                                                           
Santa Fe, New Mexico  87501                                                     
(800) 243-1575                                                                  

DISTRIBUTOR                                                                     
Davis Distributors, LLC                                                         
124 East Marcy Street                                                           
Santa Fe, New Mexico  87501                                                     

TRANSFER AGENT & CUSTODIAN                                                      
State Street Bank and Trust Company                                             
c/o Selected Funds                                                              
P.O. Box 8243                                                                   
Boston, Massachusetts  02266-8243                                               

AUDITORS                                                                        
KPMG LLP                                                                        
707 Seventeenth Street, Suite 2300                                              
Denver, CO 80202                                                                

COUNSEL                                                                         
D'Ancona & Pflaum                                                               
111 E. Wacker Drive                                                             
Chicago, Illinois  60601-4205                                                   

=================================================                               

FOR MORE  INFORMATION  ABOUT THE SELECTED  FUNDS,                               
INCLUDING  MANAGEMENT FEE,  CHARGES AND EXPENSES,                               
SEE THE  CURRENT  PROSPECTUS  WHICH MUST  PRECEDE                               
OR ACCOMPANY THIS REPORT.                                                       

=================================================

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘N-30D’ Filing	Date	First	Last	Other Filings

Corrected on:	4/7/04
	1/1/00	7	8
Changed as of:	3/10/99
Filed on:	3/8/99
	2/19/99	3
	2/5/99	43
	1/1/99	35
For Period End:	12/31/98	1	43	24F-2NT, NSAR-B
	12/6/98	11
	9/6/98	11
	2/13/98	43
	1/1/98	13	17
	12/31/97	33	43	24F-2NT, N-30B-2, NSAR-B
	12/31/96	40		24F-2NT, N-30B-2, NSAR-B
	12/31/95	40	41	24F-2NT, N-30B-2, NSAR-A
	12/31/94	39	41
	1/4/94	39
	5/6/93	4
				List all Filings

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Filing Submission 0000950147-99-000195 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Selected International Fund, Inc – ‘N-30D’ for 12/31/98

On: Monday, 3/8/99, at 12:27pm ET · For: 12/31/98 · Accession #: 950147-99-195 · File #s: 811-01533, 811-01550 · Correction: This Filing’s “Filed as of” Date was Corrected and “Changed as of” 3/10/99 by the SEC on 4/7/04. ®

Previous ‘N-30D’: None · Next: ‘N-30D’ on 9/10/99 for 6/30/99 · Latest: ‘N-30D’ on 3/3/03 for 12/31/02

Annual or Semi-Annual Report Mailed to Shareholders — Rule 30d-1Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

On: Monday, 3/8/99, at 12:27pm ET · For: 12/31/98 · Accession #: 950147-99-195 · File #s: 811-01533, 811-01550 · Correction: This Filing’s “Filed as of” Date was Corrected and “Changed as of” 3/10/99 by the SEC on 4/7/04. `®`

Annual or Semi-Annual Report Mailed to Shareholders — Rule 30d-1
Filing Table of Contents