Welcome to the Moderate Trader. Within these pages a potential investor can easily find information that will be helpful when making the decision to buy or sell a stock. These factors are explored in detail in the section titled “Investing.”


The stock of Tyco International fell tremendously during the past three weeks. These wondering if now is a good time to buy this stock will want to read “Buy & Sell” to find out what our target level for this stock is.


Recently the market has experienced a very fast rebound. In light of this, the present valuations are still too high. Therefore investors and speculators should wait until they reach our “buy target level.” Speculators may visit our section titled “Stocks for traders” for a list of stocks and their short-term buy and sell target levels.


Investors will find a small description about each stock that is held in our Model Portfolio in the section Model Portfolio. Furthermore, investor will find our target level to buy these stocks, and approximately when to sell them and at what price level.


The Internet stock that was held in our Model Portfolio for two years was sold with a gain of 84 percent. Read Sold to find out which stock was sold.


We have compiled a list of technology stocks that will be bought as soon as they reach our target level and added to our Model Portfolio. Read Buy Alert to find out which stocks will be bought and our target levels.


All of the stocks that are held in our Model Portfolio are listed in the Model Portfolio Chart, along with the stock split dates and the change in value for each one.


We welcome your questions, or comments. Please E-mail them to: webmaster@moderatetrader.com

JESSICA BEZOLD, Editor

The Federal Reserve board met on January 30, 2002, and left the interest rate unchanged. Although the Fed does not have much more room left for easing, if the economy does not start recovering from its recessionary cycle, the Fed may cut rates once again and bring the funds rate to 1.5 percent in the first half of 2002.

In such a scenario, some of the investors may start moving cash out of the Certificates of Deposit and invest it in stocks. As more money flows into equities and the earnings gradually improve, the market could reach higher level. Even though the Fed has done all they can, it appears that instead of a V-shaped, the economic recovery may be a slow process lasting throughout the year 2002.

Although the market has been very volatile, the momentum of many stocks has changed drastically. In the past it would take a volatile stock just four weeks to reach its high level, then approximately eight weeks to fall and test its support level.

Now it may still take only four weeks for a volatile stock to reach its high level, but afterwards the stock may continue to trade near its high level, in a narrow range for as long as three, to four months, then finally fall at a fast pace and test its support level. In such a market environment it is not easy to estimate when a certain stock may reach its low level.

The market is overbought and the price to earnings ratio is still too high. Speculators who have cash on the sidelines should wait patiently and then start buying stocks at low level by the end of February through March 2002.

Short-term, the market may remain very volatile and speculators could achieve best results by trading stocks such as the ones mentioned in the section Stocks for traders. Investors should remember that short-term trading is risky and will greatly increase the tax liability.

There are many factors that influence investors’ decisions. Two of these factors are greed and fear. Here is a basic example of greed. An investor buys 100 shares of ABZ stock at $22 per share after it has fallen from its 52-week high of $45 per share. After eight months, the stock has reached its previous high and once again is trading at $45 per share. The investor continues to hold this stock, hoping that it may reach a higher level.

Unfortunately, two months later the stock starts to fall. Four months into the downtrend of this stock, its chart specifies that the 50-week moving average fell below the 200-day moving average. This technical indicator reinforces the downward trend and after an additional eight months this stock is down to $22 per share. Had this investor sold the stock at $45 per share, the sale would have generated a short-term gain of approximately 100 percent. Although this investor would have to pay tax on this short-term capital gain, the sale could still net an approximately 62 percent gain for someone who is in the highest tax bracket.

Although there is an adage “Let your profits run,” it is very beneficial for an investor to set a target level at what price a particular stock will be sold. When the stock nears that level, monitor it closely, every day. If an investor had bought the stock of ABZ at $22 per share and set a target level of $40, and sold it at $40 per share, the investor would have locked in a short-term gain of approximately $18 a share, or 81 percent, before taxes. Surely, it would have been better to sell this stock at $40 per share and pay taxes on short-term gain than to hold this stock and watch it fall to $22 per share.

Now lets take a look at “fear,” another major factor that influences investors’ decisions. The stock of XYZ has traded as high as $55 during the past 52-weeks. An investor buys 100 shares of a blue-chip XYZ stock when it has fallen to $32 per share, after analyzing its fundamentals. Four weeks later, this stock falls $8 a share in one day, to $24 per share. The investor is concerned that this stock could continue to fall and sells it the next day at $23.50 per share, with a loss of $850 plus the cost of commission. Five weeks later, this investor is shocked when the stock reaches $32 per share. Furthermore, to make matters worse, after an additional eight weeks, XYZ stock reaches $37 per share. Had the investor continued holding this stock it would have generated a gain of $5 a share.

First, it makes a big difference if this was a large-cap blue chip stock or, for example, an Internet stock. If it were a large-cap blue chip stock, surely the investor could have held it.

Second, the price of each stock will fluctuate. The price of some of the stocks fluctuates as much as $15 per share within three months, and that is why investors should look at the chart of each stock before buying it. Surely, if the stock is at the three months high, one should not buy it at this level. An investor could wait four to six weeks and then buy it. Once again, monitor the chart, and once the stock reaches a bottom and then starts to rebound, buy it. If a stock had reached a high level of $42 per share two months ago, and after falling to $26.50 a week ago, now trades at $30 per share, it could be bought at this level. Once the stock revisits its recent high of $42 per share it could be sold to lock-in a short-term gain of $12 a share, or 40 percent.

These are simplistic scenarios that take into account money flow and fluctuations in the price of the stock. In real trading situations investors should pay attention to other factors. Another major factor is earnings in the specific quarter, and this could influence the price of the stock substantially in either direction, depending on whether announced earnings are better, or lower, than expected. Our latest motto is: If the projected earnings for the quarter are lower than earnings for the same quarter a year ago, sell the stock before the company makes its earnings announcement.

Last but not least is the investment strategy. Investors have been told to buy stocks and hold long-term. Such strategy is excellent when an investor buys a stock that continues its overall upward trend over the course of five or ten years, and generates a return as high as 3,000 percent. This type of investment strategy would be great if it were possible to select stocks that would perform in such a manner, but it is almost impossible to estimate beforehand, which stock out of several thousand could generate such a return.

On the other hand, it is much easier to monitor the charts of a group of stocks and buy each one, selectively, after it has reached its 52-week low and starts rebounding. Such stocks could be traded monthly, quarterly, or held as long as eleven months, and then sold as soon as each stock reaches its target level. Some of the large-cap blue chip stocks fall as much as 40 percent from their 52-week high. If such a stock is bought at a low level, once it rebounds to its 52-week high it could generate a return of approximately 60 percent in less than one year.

At www.moderatetrader.com our previous strategy was to buy stocks and hold long-term. Some of our stock picks were excellent. Thirty shares of Intel Corporation were bought in March of 1995, and in less than seven years have risen 560 percent in value.

Nokia Corporation was another great performer. In April 1997, ADRs of Nokia Corporation were bought at $58.88 and after three splits are up 312 percent in less than five years.

Although the name of our web site remains unchanged: www.moderatetrader.com there will be higher turnover of stocks in our Model Portfolio. In the future, as much as 50 percent of the Model Portfolio may be turned over annually. Assuming beforehand that the majority of our trades are successful, such action could generate higher short-term capital gains, and along with it, higher tax consequences.

Although it is not likely that a typical investor will acquire all of the stocks that are in our Model Portfolio, an investor has to be aware beforehand that these stocks that are intended to be held short-term could greatly increase the tax liability. Furthermore, we estimate that such trading strategy could increase the average annual return of our Model Portfolio to approximately 40 percent. Our Model Portfolio is heavily weighed in technology stocks and the risk of such asset allocation is much greater than owning a group of stocks in several sectors.

Every investor should remember that diversification is the main rule when it comes to investing. Investing all of the funds in the stock of the company where you work is the worst thing an investor may do. Do not repeat the mistake made by the employees of Enron Corporation.

Once again we would like to inform investors that our Model Portfolio is heavily weighed in the technology stocks and the risk of such asset allocation is above average. We suggest that each investor diversify their stock portfolio and hold several stocks from different sectors.

Applied Materials, Inc. (NASDAQ symbol: AMAT) is a major supplier of wafer processing equipment that is used to produce semiconductors. The company produces systems that use physical vapor deposition technology, chemical vapor deposition and oxide etching. The demand for the company’s equipment continues to accelerate in line with the growing sales of computers and telecommunication devices.

Although short-term, there may be a temporary decline in demand for the equipment made by Applied Materials but in our opinion long-term outlook for the company is excellent. As the demand for chips continues to grow worldwide, the sales of Applied Materials could grow approximately 20 percent annually during the next five years.

On July 16, 2001, this stock fell to a low of $41.95 per share and then closed at $45.86 on July 31, 2001. In the September issue, we stated that AMAT could fall to $39 per share in September and at such a level would be a strong buy. Due to the horrific event on September 11, 2001, this stock fell tremendously and closed at $27.87 on September 27, 2001.

AMAT closed at $41.82 per share on February 7, 2002. This stock may test its support level and although it may not fall to $27.87 per share, as soon as it falls to approximately $30 per share by the end of March 2002, it would be a strong buy. Hold this stock at least four years.


CMGI, Inc. (NASDAQ symbol: CMGI) finds, acquires, develops and operates Internet companies. It is one of the worlds largest Internet investment companies. CMGI consists of three venture capital funds.

CMGI, Inc. has developed a strategy to acquire start-up Internet companies, and then either sell them outright, or sell a minority interest and reinvest the cash proceeds. The company has a history of acquiring successful Internet companies. CMGI, Inc. acquired a majority stake in Alta Vista, while Compaq retained 17% equity ownership in the Alta Vista business.

To find out more about Alta Vista, visit the company’s Web site at www.altavista.com and to find out more about CMGI, Inc., visit the company’s Web site at www.CMGI.com

The main reason why we like this company is because it has an 83 percent interest in Alta Vista. CMGI planned to issue an Initial Public Offering in Alta Vista but due to the negative market condition the IPO has been postponed. When the market improves and the company does an IPO on Alta Vista, the stock of CMGI could establish a strong upward trend and may even reach $90 per share in the first half of the year 2003.

Once this stock reaches our revised target level of $90 per share, all three hundred shares will be sold to lock in the gain. We would like to remind investors that the risk of owning this stock is high; therefore it may only be bought by speculators. This stock closed at $1.28 per share on February 7, 2002. We maintain our rating of speculative screaming buy.


Cisco Systems, Inc. (NASDAQ symbol: CSCO) makes data networking equipment, data switches, and networking gear. Cisco Systems continues to expand its market share. The annual revenues have grown from $2.2 billion in fiscal 1995, to $12.2 billion in fiscal 1999. John T. Chambers, who is a CEO of Cisco Systems, continues to steer the company on a path to high growth and the long-term outlook for the company is excellent.

In our opinion, Cisco Systems, Inc. could continue its acquisition spree and the annual revenues may reach $50 billion in six years. Cisco Systems, Inc. is positioned to offer the latest equipment to service providers, such as IP internetworking technology which allows to host Internet applications and expand their service from basic voice traffic to broadband which can carry data, and provide Internet access and video conferencing.

On August 31, 2001, this stock closed at $16.33 per share. In the September, 2001 issue, we stated that this stock could test its support level and may fall to approximately $15 per share. At such a level this stock would be a strong buy.

This stock closed at a low of $11.24 per share on September 27, 2001, then proceeded to rebound and closed at $21.79 on December 6, 2001.

On February 7, 2002, this stock closed at $17.06 per share. This equity may test its support level by the end of March 2002 and while it may not revisit its recent low, at approximately $12.75 per share it would be a strong long-term buy. Investors who already own this stock could add to their position. Hold this stock at least ten years.


Compaq Computer Corp. (NYSE symbol: CPQ) is the third largest computer manufacturer in the world. The Company designs and makes notebook personal computers, servers, consumer PCs and networking equipment. The turnaround is taking longer than expected. Although revenues continue to grow, the earnings are still below the levels reached three years ago.

The company sold 83 percent of interest in Alta Vista Web site to CMGI, Inc. Compaq Computer Corp. retained 17 percent equity in the Alta Vista. Both companies will promote this site. In the future it could become one of the top three sites and generate a substantial amount of revenue.

On September 20, 2001, CPQ closed at a low level of $7.85 per share. Even if Hewlett-Packard Corporation did not acquire this company, this stock may rebound on its own.

This stock closed at $11.29 per share on January 8, 2002. This equity may test its support level of $7.85 in March 2002 and at such a level would be a strong buy. Speculators may buy this stock and trade it, while patient investors may want to hold it until it reaches our revised target level of $29 per share.

After closing at a high of $12.35 on January 31, 2002, this stock pulled back and closed at $11.66 on February 7, 2002. As soon as this stock reaches our target level of approximately $29 per share, one hundred shares that are held in our Model Portfolio will be sold immediately.


Compuware Corporation (NASDAQ symbol: CPWR) makes software that manages corporate networks, and improves productivity. The revenues are growing at a fast pace. The stock of Compuware Corporation reached $40 per share in December 1999.

On March 31, 2000, we stated that there is a probability that this stock could fall to $16 per share during the next three months. When this stock fell below $13 per share, an additional 200 shares were bought at $12.38 on April 14, 2000.

This stock closed at a high of $13.75 per share on January 24, 2002 and then proceeded to fall. On February 7, 2002, this stock closed at $12.00 per share.

Buy this stock on dips and hold long-term. Due to the negative short-term outlook for this sector, we have revised our target level to $28 per share, from $35 per share. Once this stock reaches our revised target level, two hundred shares will be sold immediately. The remaining 150 shares will be held long-term, at least three years.


Sold: Delia’s, Inc. (NASDAQ symbol: DLIA) were sold at $7.83 per share on February 1, 2002. Two hundred shares of Delia’s, Inc. were bought on December 31, 1999, at $7.19 per share. After Delia’s, Inc. merged with i Turf, Inc. these shares were converted into newly issued stock and after the conversion there were 342 shares in our Model Portfolio.

The original acquisition cost was adjusted to $4.20 per share. In two years, this stock generated a gain of 84 percent. The cash received from this trade was added to the existing cash in our Model Portfolio.

Although, long-term this stock may reach our revised target level of $25 per share, at the present level it is fully valued. Recently, we stated that as soon as this stock revisits its high of $8 per share, it will be sold, therefore when this equity was near that level it was sold immediately.


Dell Computer Corporation (NASDAQ symbol: DELL) is the world’s number one direct-sale computer manufacturer in the world. The Company makes personal computers, notebook computers, servers, and workstations.

In March of 1999, the Company issued a 2-for-1 stock split, the seventh in eight years. On March 22, 2000, the stock reached an intra-day high of $59.68 per share. Then the stock proceeded to fall.

On November 30, 2000, this stock closed at $19.25 per share. As money flow into this equity increased, this stock reached an intra-day high of $27.50 per share on February 7, 2001. Two weeks later, on February 21, this stock tested its support level of $20.43 per share.

On September 21, 2001, this stock closed at a low level of $16.63 per share, and then proceeded to rebound to $29.67 per share on December 5, 2001. This stock closed at $26.20 per share on February 7, 2002. In March 2002, this stock may test its support level and at approximately $17 per share would be a strong buy.

Although it is not likely that the stock of Dell Computer Corporation may appreciate at such a fast pace as it did between 1994 and 1999, in our opinion, this stock could generate a gain of approximately 1,500 percent in six years.


Ericsson LM Telephone (NASDAQ symbol: ERICY) is a leading supplier of mobile phones and telecommunications equipment. The company’s main manufacturing facilities are located in Sweden. Ericsson’s telecom equipment is among the most advanced in the world.

The sales of equipment have increased significantly in China and surpassed the sales in the U.S. Ericsson LM Telephone projects that by the year 2003 the number of mobile phone users could reach over 800 million. The long-term outlook for Ericsson is excellent. ADR’s of Ericsson split 4-for-1 on May 8, 2000.

On February 7, 2002, ERICY closed at $4.02 per ADR. This equity is near its bottom and investors may buy it now and hold it at least three years.


Intel Corporation (NASDAQ symbol: INTC) is the leading manufacturer of microprocessors. The company continues to switch production to a 0.18 micron manufacturing process that yields more semiconductors from each wafer.

The stock of Intel Corporation has kept rising ever since 30 shares were bought in March of 1995, at $78.25 per share. The company issued a 100% stock dividend on June 22, 1995, another one on July 14, 1997, a 2-for-1 stock split on April 11, 1999, and another 2-for-1 split on July 30. The original 30 shares bought, became 480 after these stock splits.

On October 30, 2000, two hundred shares were sold and now there are 280 shares in our Model Portfolio. This stock continued to fall and closed at $30.06 per share on December 29, 2000. As the institutional investors proceeded to buy this stock, it rebounded and closed at $37 per share on January 31, 2001.

On January 8, 2002, this stock closed at $35.58 per share and we stated: “At this level the stock is fully valued.” Almost a month later, on February 7, 2002, this stock closed at $32.31 per share. This stock may pull back below $26 per share in March 2002 and at such level investors may buy this equity and hold it long-term.


Internet Capital Group (NASDAQ symbol: ICGE) is a venture capital group that owns a stake in over 52 Internet companies. This venture capital group owns a stake in Vertical Net, a group of online trading communities where transactions for parts and raw materials are made among corporations.

In July 2000, this stock traded at $45.18 per share and then proceeded to fall. Due to the carnage in the Internet sector this stock closed at a low of $3.28 per share on December 29, 2000, down from its high of $143.55 reached in March 2000.

Afterwards, this stock proceeded to build a slow upward momentum and closed at $6.44 per share on January 31, 2001. There is a very slight probability that this stock could revisit its high of $143.55 per share during the next three years.

As soon as this stock reaches approximately $130 per share, 150 shares will be sold immediately. The remaining 50 shares will be held long-term. On February 7, 2002, this stock closed at a low level of $0.79 per share, and we rate it a speculative strong buy.


LSI Logic Corporation (NYSE symbol: LSI) makes chips for: cellular phones, satellite set-top boxes, DVD products and personal computers. The company derives 58% of revenues from international sales. LSI Logic has manufacturing facilities in the United States, Europe and Japan.

The company may continue to invest 15-17% of its revenues in R & D. As the demand for cellular phones and set-top boxes continues to grow in double-digits, the revenues and earnings of LSI Logic could outperform the rest of the companies in the chip sector. This stock closed at $32.63 per share on October 31, 2000 and then proceeded to descend. Due to the bear market, this stock broke below $20 per share and closed at a low level of $16.43 per share on December 21, 2000, way down from its high of $71.32.

On January 8, 2002, this stock closed at $16.21 per share and at that level was fully valued. After testing support level of $13.95 on January 22, 2002, this stock proceeded to rebound and closed at $15.60 on February 7, 2002.

This stock is in a slow downtrend. In March 2002, this stock may test its support level of $11.20 per share and at such a level would be a screaming buy. Stocks of chipmakers may appreciate substantially by the end of the first half of 2002 and LSI could reach approximately $22.50 per share.

This stock will be held in our Model Portfolio and will be sold as soon as it reaches our revised target level of approximately $42 per share, perhaps at the end of the second half of 2002.


Lucent Technologies, Inc. (NYSE symbol: LU) is the largest manufacturer of telecommunications equipment. Lucent Technologies makes fiber-optic equipment and optical network equipment that allows the phone companies to increase capacity and to provide high speed Internet access.

On October 30, 2000, an additional 200 shares of Lucent were bought at $20.75 per share and added to our Model Portfolio. Now there is a total of 250 shares in our Model Portfolio.

This stock is for patient investors who are willing to hold it at least two years. In the year 2003, this equity may reach our revised target level of $55 per share.

As soon as this stock reaches our target level, 150 shares will be sold. The remaining hundred shares will be held long-term, at least ten years.

On February 7, 2002, this stock closed at $5.80 per share. Buy this stock at this level and hold long-term. Investors who already own this stock may add to their position.


Microsoft Corporation (NASDAQ symbol: MSFT) is the largest maker of software. The operating system made by Microsoft is used in the majority of computers. The company has no debt and has approximately $17 billion in cash and short- term investments.

Although this timely stock may not appreciate at its previous fast pace, it could generate a gain of 700 percent in six years. This stock will be held long-term, at least five years. On December 29, 2000, this stock closed at $43.38 per share and we rated it a screaming buy.

On January 8, 2002, we stated: “this stock closed at $69.38 per share and at this level is fully valued.” A month later, on February 7, 2002, this stock closed at $59.80 per share. This stock may test its support level in mid March 2002, and if it were to fall to approximately $54 per share it would be a strong buy. Buy this stock and hold long-term.


Motorola Inc. (NYSE symbol: MOT) is a major supplier of cellular phones, semiconductors, and pagers. The stock of Motorola continued to fall and reached an intra day low of $14 per share, an eight year low, on March 22, 2001.

The stock of Motorola was held in our Model Portfolio between February 1995, and April 1997. On April 23, 1997, all 50 shares of Motorola were sold at $57.50 per share, with a loss of five percent. On the same day, the funds received from the sale of shares of Motorola were used to buy 50 ADRs of Nokia Corporation at $58.88. To cover the balance of this trade, $179.85 of cash was deducted from the cash position in our Model Portfolio.

The stock of Motorola is great for trading. In our opinion, this stock could reach $50 per share in the year 2003, and once it does it will be sold.

On February 7, 2002, this stock closed at $12.30 per share. This stock may have reached its support level and at this level we rate it a strong buy. Hold this stock until it reaches our target level of approximately $50 per share.


Nokia Corporation (NYSE symbol: NOK) is the world’s largest manufacturer of mobile phones. The company is located in Finland, with subsidiaries in the United Kingdom and China. Nokia derives 56 percent of its revenues from sales in Europe and 44 percent from sales in other continents.

The long-term outlook for Nokia is excellent, as the demand for the company’s products grows worldwide. The company issued a 2-for-1 split on April 16, 1998, one on April 11, 1999, and a 4-for-1 split on April10, 2000.

American Depository Receipts of Nokia Corporation closed at $21.65 on February 7, 2002. This equity is already in a downtrend. These ADRs may test their support level of $15.20 in March 2002, and at such a level should be bought immediately. Hold these ADRs long-term, at least three years.


Nortel Networks Corp. (NYSE symbol: NT) is the leading provider of networking solutions, including optical networking solutions and wireless networking systems. The stock is way off from its high of $86 per share. Although this stock could trade at a low level during a quarter, or two, as soon as the growth of revenue reaches approximately 50 percent, perhaps next year, this stock may once again resume its strong upward trend.

Until September 2001, we were estimating that this stock could revisit its high of $86 per share in less than twelve months. Due to the continued slow-down, it could take this stock two years to reach such a level. The Internet is not going away. Quite the opposite is happening. Each month millions of new users are accessing the Internet. This greatly increases the demand for bandwidth therefore the demand for the equipment made by Nortel Networks could continue to grow worldwide.

On February 7, 2002, this stock closed at $6.09 per share. There is a slight probability that this stock may test its support level of $5 per share and at such price level we would rate it a strong buy. This stock will be held in our Model Portfolio until it reaches approximately $60 per share and then it will be sold.


Oracle Corporation (NASDAQ symbol: ORCL) is the world’s second largest software company. The company makes database management system software. Approximately 90 percent of corporate Web sites are using Oracle’s database software.

In the year of 1999, Oracle Corporation consolidated its computer system from approximately 40 locations around the world, down to two locations. The company launched its Internet store and all of its sales will be made through this online storefront. Oracle Corporation has already achieved annual savings of $1 billion from this E-engineering.

As soon as this stock reaches our target level of approximately $25 per share, perhaps in April 2002, all of the shares that are held in our Model Portfolio will be sold immediately. The cash will be added to the existing cash in our Model Portfolio.

On January 31, 2002, this stock tried to break through its resistance level but was not able to make it and closed at $17.26 per share. A week later, on February 7, 2002, this stock closed at $15.92 per share. If the money flow were to fall, this stock may proceed in a downward direction and may test its support level of $13.40 in March 2002. At such price level, investors may buy this stock and then sell as soon as it reaches our target level of $25 per share.


Pfizer, Inc. (NYSE symbol: PFE) is a diversified manufacturer of pharmaceuticals and consumer products. After the company merged with Warner-Lambert it became a pharmaceutical behemoth with an extensive R & D department. Among its brand name pharmaceutical products is Norvasc for hypertension, Zoloff for depression, and Lipitor for lowering cholesterol level. The latest addition is Viagra, a pill for erectile dysfunction.

On June 30, 1999, the company issued a 3-for-1 stock split. The long-term outlook for the company is good. On February 7, 2002, this stock closed at $40.06 per share. This stock may test its support level of $35.80 in March 2002, and at such a level would be a strong buy. Hold this stock long-term.


Sun Microsystems, Inc.(NASDAQ symbol: SUNW) is among the major suppliers of hardware to the Internet. The company continues to introduce new servers, competitively priced, in order to expand its market share.

Sun Microsystems revenues have doubled during the past three years, to $19 billion. In our opinion, the company could attain a greater market share during this economic slowdown, and once again may double its annual revenues in three years.

As additional hundreds of millions of users access the Internet, the demand for servers could grow 50 percent annually during the next five years. This stock will be held in our Model Portfolio approximately three years, and as soon as it generates a gain of 400 percent, all of the shares will be sold.

On January 8, 2002, this stock closed at $13.93 per share and then proceeded to fall. A month later, on February 7, 2002, this stock closed at $9.22 per share. This stock may test its support level of $8 per share in March 2002, and at such a level would be a screaming buy.


Vertical Net, Inc. (NASDAQ symbol: VERT) is an Internet incubator that owns and operates over 50 Websites designed as online business-to-business communities. These Websites, known as vertical trade communities are grouped in several industry sectors such as Advanced Technologies, Communications, Environmental, Food and Packaging, Food Service, Healthcare, Manufacturing and Metals, Textile and Apparel, and Service.

This stock was featured in our “Buy & Sell” section in August 2000. At that time, we stated that this stock could fall to approximately $35 per share. Furthermore, we stated that the risk of owning this B2B start up is high; therefore this stock should only be bought by speculators.

At that time, who would have thought that this stock would break through a $35 level and continue to fall.

Once again, we would like to reiterate that this stock is not for the faint of heart and may be bought only by speculators. These 200 hundred shares will be held in our Model Portfolio until the stock reaches approximately $140 per share, perhaps in 2004, and then will be sold to lock in long-term capital gain. On February 7, 2002, this stock closed at $1.00 per share and we rate it a speculative strong buy.


WorldCom Group (NASDAQ symbol: WCOM) has already grown from a small telecommunications provider to a behemoth through mergers and acquisitions. On September 14, 1998, WorldCom merged with MCI Communications Corporation. Once this merger was finalized, WorldCom was in possession of one of the worlds largest and most advanced digital networks that connects local markets in the United States to more than 280 countries and locations worldwide.

On August 4, 1998, the company acquired a 51.79 percent voting interest and 19.26 percent economic interest in Embratel, a national telecommunications provider in Brazil. The company plans to continue expanding globally through mergers and acquisitions.

In our opinion, at the recent price level this stock is undervalued and has a potential to reach approximately $50 per share in 2004. As soon as this stock reaches our target level of $50 per share, all one hundred shares will be sold to lock in a probable gain of approximately 120 percent.

Due to the recent sell-off in the telecommunications sector, this stock closed at a low level of $7.52 per share on February 7, 2002. The risk of owning this stock is above average. At this level we rate this stock a strong buy. Speculators may buy this stock and hold it until it reaches our target level.


Yahoo Inc. (NASDAQ symbol: YHOO) is a global Internet media company that provides comprehensive information and shopping services to over 200 million users worldwide. The company’s Website, www.yahoo.com, is the most visited site and has the highest name recognition. The company provides Web content around the world in 12 languages.

As the advertising market on the Web continued to grow, in the fourth quarter of 1999, there were 3,550 advertisers, versus 2,225 in the same quarter of 1998. Average revenue per advertiser rose to $57,000 in the fourth quarter of 1999, from $34,000 in the fourth quarter of 1998.

Advertising revenues on the Web in the United States alone are projected to reach over $8 billion annually in one year. Yahoo Inc. could receive 20 percent of these revenues; thus we estimate that the company’s annual revenue could grow to approximately $1.6 billion in the year 2002. Yahoo Inc. is among the few Internet companies that already generate positive cash flow. We project that this stock could rise twenty-fold from its present level during the next five years.

The risk of owning this stock is above average and it is not for a timid investor. This timely stock will be held in our Model Portfolio until it reaches our target level of $300 per share and then these one hundred shares will be sold.

On January 8, 2002, this stock closed at $19.53 per share. Money flowing into this stock reached its highest level on January 10, 2002 and then proceeded to fall. On February 7, 2002, this stock closed at $15.35 per share. This stock may test its support level of $9 per share in March 2002. At such a level this stock would be a speculative, strong long-term buy.

On February 1, 2002, all of the shares of Delia’s, Inc. (NASDAQ symbol: DLIA) were sold at $7.83 per share. Two hundred shares of Delia’s, Inc. were bought on December 31, 1999, at $7.19 per share. After Delia’s, Inc. merged with i Turf, Inc. these shares were converted into newly issued stock and after the conversion there were 342 shares in our Model Portfolio.

The original acquisition cost was adjusted to $4.20 per share. In two years, this stock generated a gain of 84 percent. The cash received from this trade was added to the existing cash in our Model Portfolio.

Approximately half of the cash received from this trade will be used to buy more ADR’s of Ericsson LM Telephone (NASDAQ symbol: ERICY) at approximately $3.79 per ADR.

On February 5, 2002, stock of Corning Incorporated (NYSE symbol: GLW) closed at $6.25, well below our buy target level of $7 per share. On February 6, 2002, one hundred shares of Corning Incorporated were bought at $6.62 per share.

The company is a major supplier of fiber-optic cable. In our opinion, its inventory has been depleted to low level and as the demand improves, this stock may build a strong upward trend. These 100 shares of Corning Inc. will be sold as soon as this stock reaches approximately $17.50 per share, perhaps by the end of April 2002.


The stock of JDS Uniphase (NASDAQ symbol: JDSU) closed at $6.18 on February 5, 2002. Our buy target level was approximately $5.25 per share and this stock may reach it in a few weeks. A decision was made to buy this stock now and add it to our Model Portfolio.

Although our original objective was to buy 100 shares, due to the substantial amount of cash in our Model Portfolio a decision was made to buy more shares. On February 6, 2002, two hundred shares of JDSU were bought at $6.33 per share.

JDS Uniphase makes components used in fiber-optic networks and the company is a leader in this sector. The outlook for this company may start to improve and this stock may double in value during the next three months.

These 200 shares will be sold as soon as this stock reaches approximately $15 per share, perhaps by the end of April 2002, to lock in a short-term gain.

Some of the tech stocks were very resilient and as more money flowed into them they remained near their recent highs. These tech stocks could test their support level by the end of February or March, 2002.

These stocks listed below will be bought when they reach their support level and added to our Model Portfolio. All of these stocks will be traded short-term. If these stocks were not to reach our “buy” target level, then a smaller quantity of each stock will be bought.



Three hundred shares of LSI Logic Corporation (NYSE symbol: LSI) will be bought as soon as this stock falls to approximately $11.20 per share. By March, 2002, this stock may test its support level of $11.20 per share and at such a level would be a screaming buy.

Stocks of chipmakers may appreciate substantially by the end of the first half of 2002 and LSI could reach approximately $22.50 per share. As soon as this stock reaches our target level of approximately $22.50 per share, perhaps in May 2002, these three hundred shares will be sold. To find out more about this stock, read Stocks for traders



Four hundred shares of Advanced Micro Devices, Inc. (NYSE symbol: AMD) will be bought as soon as this stock tests its support level of approximately $8 per share. We will wait until this equity tests its support level, perhaps by the end of March 2002, and then this stock will be bought and added to our Model Portfolio.

In the year 2002, the earnings outlook for this stock may improve substantially and as more money flows into this equity it may reach a high level by the end of April 2002. These 400 shares of AMD will be sold as soon as this stock reaches approximately $27.50 per share, perhaps in May 2002. To find out more about this stock, read Stocks for traders



Three hundred shares of Sun Microsystems, Inc. (NASDAQ symbol: SUNW) will be bought as soon as this stock falls to approximately $8 per share, perhaps in March 2002. These 300 shares will be sold as soon as the stock reaches approximately $18 per share, perhaps by the end of April 2002, to lock in a short-term gain. To find out more about this stock, read Model Portfolio.



Two hundred shares of RF Micro-Devices, Inc. (NASDAQ symbol: RFMD) will be bought as soon as this stock falls to approximately $12 per share. This equity may reach such a level between mid February and March, 2002.

RFMD may fall to $12 by March 2002, and then rebound to approximately $29 per share by the end of the first half of 2002. If this stock were to reach such a level, it should be sold immediately. To find out more about RFMD, read Stocks for traders.