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.”


On June 18, 2003, Amgen, Inc., (NASDAQ symbol: AMGN) closed at $65.87 per share. Read on to see how we rate this stock. We are also featuring the stock of General Dynamics Corporation, (NYSE symbol: GD) that closed at $76.97 per share on June 18, 2003. Those wondering whether to buy or sell these stocks will want to read the “Buy & Sell” section.


In November 2002, we started a new section titled “The high momentum Dow stocks.” In this section we will feature Dow Jones industrial stocks that either have appreciated at a fast pace, tumbled to a low level, or, depending on the money flow, could ascend or descend at a fast pace during the next five months.


In our Model Portfolio section, investors will find a brief description about each stock in our portfolio, our target level at which to buy these stocks, approximately when to sell them, and at what price level.


Read our Buy Alert section to find out which stocks will be bought when they reach our target level.


For your convenience we have listed the stock split dates and change in value for each one of the stocks held in our Model Portfolio in the section titled Model Portfolio Chart.


In May 2002, we started a section called New investors with a list of five stocks provided in Model Portfolio II that may be bought by investors who are just starting to build their stock portfolio. On July 10, 2002, we added one more stock to the list and now there is a total of six stocks in our Model Portfolio II.


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

JESSICA BEZOLD, Editor

As the market continued to ascend, the Dow Jones Industrial average closed at a high of 9323.02 on June 17, 2003. Since May 6, 2003, the Dow Jones Industrial average rose 734.66 points and was up 8.5 percent in five weeks. While some of the investment gurus are still suggesting that individual investors buy stocks or they could miss the rally, the stock valuations are once again reaching sky-high levels.

In May 2003, we stated: "Some investors may be asking this question: 'Can this rally last, and if not, when will it end?' The latest economic indicators are still unfavorable and the unemployment rate rose to 6 percent. If consumer spending were to decline and business spending remained at the present low levels, the recent bear market rally could end this month. Perhaps investors should abide by the adage: Sell in May, go away and come back in September."

Some investors may be asking this question: Can this rally last, and if not, when will it end? The latest economic indicators are still unfavorable and the unemployment rate rose to 6 percent. If consumer spending were to decline and business spending remained at the present low levels the recent bear market rally could end this month. Perhaps investors should abide by the adage: Sell in May, go away and come back in September.

This year the market continued its uptrend longer than usual. Perhaps this year the adage may have to be changed to: "Sell in mid June, go away and come back in the beginning of October."

On May 27, 2003, the stock of eBay, Inc., (NASDAQ symbol: EBAY) closed at a high of $103.05 per share. This stock is trading at 102 times earnings. Will you be among the investors still willing to buy this stock? Should we remind investors that Internet stocks fell as much as 90 percent after the stock market bubble was pierced. Individual investors should be aware that by now it's too late to buy the stock of eBay and this equity could fall as much as 50 percent by the end of this year.

Some of the large-cap technology stocks are fully valued. Among them is Intel Corporation. On Monday, June 9, 2003, all 280 shares of Intel Corporation (NASDAQ symbol: INTC) that were held in our Model Portfolio were sold at $21.43 per share. This trade has generated $5,980.45 net cash and it was added to the existing cash in our Model Portfolio. To find out more about this trade please read: Sold.

The market is still in an overall long-term downtrend and has not reached its bottom yet. Speculators who are still on margin should sell some of their blue chip stocks before they generate a loss. Continue to build your cash position. As the remaining large-cap stocks continue to fall, these marginal accounts could generate margin calls during the next three months.

Cash is king! Investors should preserve the cash they have on hand and then start to accumulate equities at a moderate pace when they reach our buy target levels. Initially, do not commit more than 20 percent of your cash to equities because it could take this lengthy bear market several more months to reach its bottom. As of Wednesday, June 18, 2003, after the market closed, the asset allocation in our Model Portfolio was 35 percent equities and 65 percent cash.

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 events of September 11, 2001, this stock fell tremendously and closed at $27.87 on September 27, 2001.

The company issued a 2-for-1 stock split on April 17, 2002. Now there are 320 shares in our Model Portfolio. Immediately after the company issued the stock split, this stock reversed its uptrend and proceeded to fall. On May 10, 2002, this stock closed at $23.70 per share. During the next four weeks money flow fell $1.4 billion and the stock closed at $19.83 per share on June 14, 2002.

The chip sector has not rebounded yet and chip manufacturers are still postponing the purchases of additional chip making equipment. As the revenues remain flat, or even fall, this stock may test its support level. In July 2002, we stated, “This stock could test its support level of $13.75 by October 2002.” This equity broke through this support level sooner than we projected and closed at $12.76 per share on August 5, 2002. Afterwards, this stock proceeded to test its resistance level and closed at $14.70 per share on August 16, 2002.

On November 15, 2002, AMAT closed at $15.83 per share. To our surprise money flow rose $701 million during the next twelve days and this stock closed at a high of $17.49 per share on November 27, 2002. Afterwards, money flow proceeded to fall and this equity closed at $14.31 per share on May 16, 2003.

If the money flow were to fall $6.5 billion during the next four months, this stock could drop to $6.27 per share by mid September 2003. At such a level we would rate this stock a long-term buy. Long-term, this stock could reach $48.25 per share, perhaps by 2007.

CMGI, Inc. (NASDAQ symbol: CMGI) finds, acquires, develops, and operates Internet companies. It is one of the world’s 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. To find out more about CMGI, Inc., visit the company’s web site at www.CMGI.com.

Recently, CMGI, Inc., has sold some of its core holdings. Among them were Alta Vista unit and uBid, Inc. Due to these events we have revised our long-term sell target level from $59.75 to $17.50 per share.

We would like to remind investors that the risk of owning this stock is high; therefore it should only be bought by speculators. As the money flow fell, this equity closed at $1.20 per share on May 16, 2003, and we maintain our rating of speculative long-term buy.

Cisco Systems, Inc., (NASDAQ symbol: CSCO) makes data networking equipment, data switches, and networking gear. Cisco Systems continues to expand its market share. As John T. Chambers, who is the CEO of Cisco Systems, continues to steer the company on a path to high growth, the long-term outlook for the company is good.

In our opinion, Cisco Systems, Inc., could resume 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. IP internetworking technology which allows any company 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) is among their innovations.

This stock closed at a low of $11.24 per share on September 27, 2001. It then proceeded to rebound and closed at $21.79 on December 6, 2001. Afterwards, as the money flow fell, this stock reversed its uptrend and proceeded to descend.

On June 18, 2003, this stock closed at $18.73 per share. This equity is in a slow downtrend and may test its $8.60 support level by mid September 2003. If the money flow were to continue falling, in a worst case scenario this stock could drop to $5.75 per share by the end of September 2003, and at such a level we would rate it a long-term buy. Investors who already own this stock could add to their position.

Previously we stated that this stock should be held at least ten years. Although patient investors may want to hold this stock five years, speculators may achieve a better return by trading this equity. On December 16, 2002, one hundred shares of Cisco Systems, Inc., were sold at $13.45 per share. There are still 100 shares of CSCO left in our Model Portfolio

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

This stock closed at a high of $13.75 per share on January 24, 2002, and then proceeded to fall. Due to the weakness in the sector this stock maintained its downtrend and closed at $12.20 per share on March 15, 2002. In March 2002 we stated, “This stock may test its support level of $9.90 by the end of March or the beginning of April 2002 and investors may want to buy it at such a level.”

On April 4, 2002, this stock broke through its support level of $9.90 and closed at $8.28 per share, down $2.82 for the day. This equity continued its downtrend and closed at a low of $2.56 per share on August 13, 2002.

The money flow rose $154 million during the following three months and this stock closed at a high of $5.78 per share on November 25, 2002, and then proceeded to fall. On May 16, 2003, this equity closed at $5.26 per share. Buy this stock on a pullback, preferably below $2.95 per share.

Due to the negative outlook for this sector, we have revised our long-term sell target level down to $25.75 per share from $35.00 per share. Once this stock reaches our revised target level it will be sold immediately.

Delia’s Corporation (NASDAQ symbol: DLIA) sells clothing and accessories for girls and women. Over half of the sales are generated at the company’s Web site.

In April of 1999, this stock closed at a high of $39.00 per share and then proceeded in a downtrend. As the money flow fell $266 million during the next nineteen months, this equity descended to a low level of $0.57 per share on December 22, 2000. Afterwards, as the money flow rose $229 million during the next seven months, this equity proceeded to ascend and closed at $7.16 per share on June 29, 2001.

Due to the negative outlook for this sector this stock fell and closed at a low level of $0.40 per share on October 8, 2002. On October 9, 2002, one thousand shares of Delia’s Corporation were bought at $0.43 per share. If sales improve and if the money f low were to ascend $210 million during the next five months this equity could rebound to approximately $4.50 per share. At such a level this stock will be sold immediately.

On June 18, 2003, DLIA closed at $0.83 per share and we maintain our rating of a speculative short-term buy.

This stock was previously held in our Model Portfolio for slightly over two years and then on February 1, 2002, all of the shares of Delia's, Inc., were sold at a gain of 84 percent.

Elan Corporation, plc (NYSE symbol: ELN) is a pharmaceutical manufacturer that develops and distributes a variety of prescription drugs. During the past seven years the company expanded by making aggressive acquisitions. On April 12, 2002, five hundred warrants of Elan Corporation, plc were bought at $0.50 per warrant.

These warrants trade under the symbol ELANZ and expire on August 31, 2005. As this stock tumbled, the price of warrants fell along with it and on October 22, 2002, ELANZ closed at a low of $0.06 per warrant. As the money flow rose $182,000 these warrants proceeded to ascend and closed at $0.60 on January 13, 2003.

On May 16, 2003, we lowered our buy target level from $0.15 to $0.10 per warrant. These warrants continued to descend at a slow pace and closed at $0.24 per warrant on June 18, 2003. The risk of owning these warrants is high; therefore only speculators should buy them when they reach our buy target level. On June 17, 2003, we lowered our sell target level for these warrants from $2.00 down to $0.75 per warrant.

Hewlett-Packard Company (NYSE symbol: HPQ) is the second largest computer manufacturer in the world. The Company designs and makes notebook personal computers, servers, consumer PCs, and networking equipment. Although revenues continue to grow, the earnings are still below the levels reached three years ago.

Hewlett-Packard Company acquired Compaq Computer Corporation on May 3, 2002. There were 100 shares of Compaq Computer Corporation in our Model Portfolio. For each share of Compaq, Hewlett-Packard issued 0.6325 shares of its stock. Now, there are 63 shares of Hewlett-Packard Company in our Model Model Portfolio. The new stock symbol for the company is HPQ. On May 10, 2002, HPQ closed at $19.26 per share and we rated it a hold.

We were not enthusiastic about this merger. Now that this merger is finalized, the only thing we can do is to hold HPQ shares long-term until they reach approximately $46 per share, perhaps in 2006.

This stock broke through its support level of $14.96 sooner than we projected and closed at $14.62 per share on July 2, 2002. As the money flow continued to fall, this equity closed at $11.52 on July 23, 2002. Then this stock proceeded to rebound and HPQ closed at $15.30 per share on August 22, 2002.

On October 9, 2002, HPQ broke through its support level and closed at a low of $11.16 per share. Then, as money flow rose $402 million, this stock proceeded to ascend and closed at $17.70 per share on November 4, 2002. During the next four weeks the money flow rose $1.7 billion and this equity continued its uptrend. On December 2, 2002, this stock closed at $19.83 per share.

This equity broke through its resistance level and closed at $20.85 per share on January 10, 2003. On June 18, 2003 this stock closed at $21.97 per share and was fully valued.

Speculators should wait until this equity tests its $11.16 support level and if it were to fall below that level, in a worst case scenario, this stock could reach a low of $5.75 per share during the next five months. At such a level we would rate this stock a long-term buy.

Speculators may buy this stock and trade it, while patient investors may want to hold it until it reaches our target level of approximately $46.50 per share. As soon as this stock reaches our target level, the 63 shares of HPQ that are held in our Model Portfolio will be sold immediately.

Sold: 280 shares of Intel Corporation on June 9, 2003 at $21.43 per share. 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 2-for-1 stock split 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, 2000. The original 30 shares bought became 480 after these stock splits.

On October 30, 2000, two hundred shares were sold and there were 280 shares left in our Model Portfolio. This stock continued to fall and closed at $30.06 per share on December 29, 2000.

This stock closed at $35.58 per share on January 8, 2002, and we stated, "At this level the stock is fully valued." This stock was in a slow downtrend and on May 10, 2002, closed at $27.01 per share. On June 6, 2002, Intel lowered its revenue projection. The stock fell $5.00 on June 7, 2002, and closed at $22.00 per share. This equity continued to fall and closed at a low of $13.22 per share on October 8, 2002.

As the money flow rose $14 billion during the following eight weeks, this stock proceeded in a strong uptrend. On December 2, 2002, this stock closed at $21.05 per share and was fully valued at that level. As the money flow fell, this equity closed at $17.17 per share on March 14, 2003.

On June 18, 2003, this stock closed at $21.75 per share and was fully valued. If the money flow were to fall $21 billion during the next three months, in a worst-case scenario this stock could reach a low level of $7.85 per share by the end of September 2003. At such a level we would rate this stock a strong long-term buy.

Although our initial objective was to hold this stock long-term, a decision was made to sell it while it's at the recent high level. This stock was held in our Model Portfolio for slightly over eight years and was sold with a long-term gain of 330 percent.

If this equity were not to reach a low level of $7.85 per share, by the end of September 2003, four hundred shares of Intel Corporation will be bought, preferably below $13.50 per share and added to our Model Portfolio.

Internet Capital Group (NASDAQ symbol: ICGE) is a venture capital group that owns a stake in over 52 Internet companies.

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. It is highly unlikely that this stock will ever revisit its previous high of $143.55 per share.

On April 12, 2002, five hundred shares of Internet Capital Group were bought at $0.57 per share. These 500 shares will be held in our Model Portfolio long-term until this equity reaches our revised target level of $22.75 per share; perhaps by 2008. At such a level all of the shares will be sold immediately. On June 18, 2003, this stock closed at $0.69 per share, and we maintain our rating of a speculative long-term buy.

JDS Uniphase Corporation (NASDAQ symbol: JDSU) makes components used in fiber-optic networks and is a leader in the sector.

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.

Due to the negative outlook for this sector this stock continued to descend and closed at a low level of $1.62 per share on October 7, 2002. As the money flow rose $1.225 billion during the next two months, this stock proceeded to ascend and closed at $3.41 per share on November 29, 2002.

On May 16, 2003, this stock closed at $3.48 per share and was fully valued. As the money flow continued to ascend, this equity closed at $3.92 per share on June 18, 2003. This stock could test its support level of $1.62 per share by the end of September 2003 and speculators may want to buy it.

Due to the unfavorable short-term outlook for this sector it may take this stock longer to reach our sell target level. These 200 shares will be sold as soon as this stock reaches approximately $12.26 per share, perhaps in the second half of 2005.

LSI Logic Corporation (NYSE symbol: LSI) makes chips for cellular phones, satellite set-top boxes, DVD products, and personal computers. LSI Logic has manufacturing facilities in the United States, Europe, and Japan.

The company may continue to invest 15 to 17 percent of its revenues in R & D. As the demand for cellular phones and set-top boxes continues to grow, 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 $20.00 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 its support level of $13.95 on January 22, 2002, this stock proceeded to rebound and closed at $15.60 on February 7, 2002.

Due to the negative short-term outlook for this sector, this stock continued to fall and closed at $8.26 per share on August 16, 2002. This equity proceeded to test its support level and closed at $6.65 per share on September 20, 2002.

In September 2002 we stated, "If the money flow continues to fall, this stock could test its support level of $4.65 per share by mid November 2002. At such a level we would rate this stock a strong buy." This stock fell sooner than we projected and closed at $4.15 on October 10, 2002.

On October 18, 2002, LSI closed at $4.49 per share and we stated "… investors may want to accumulate it at a moderate pace." This equity closed at $8.54 per share on November 29, 2002, and then proceeded to descend.

On June 18, 2003, this stock closed at $7.64 per share. If the money flow were to fall $675 million during the next three months there is a very slight probability that this stock could fall to a low of $1.25 per share by the end of September 2003. At such a level we would rate this stock a long-term buy.

As the earnings improve this stock could reach our sell target level of approximately $15.45 per share in the second half of 2005. At such a level, speculators should sell it immediately to lock in their gain.

On the other hand, patient investors may want to hold this stock at least five years and if it were to reach $58.75 per share sell it immediately.

This stock will be held in our Model Portfolio and will be sold as soon as it reaches approximately $41.75 per share, perhaps at the end of 2007.

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 $42 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 approximately 600 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. Then, this stock proceeded to test its resistance level and closed at $64.34 per share on March 11, 2002.

In July we stated, "If money flow were to fall, this stock could test its support level of $43.38 in August or September 2002." This equity reached such a low level sooner than we projected. On July 23, 2002, MSFT closed at $43.01 per share, down $4.50 for the day, and then proceeded to rebound.

As the money flow rose sharply this stock tested its resistance level and closed at $53.23 per share on August 22, 2002. Afterwards, this equity proceeded to descend and closed at $43.74 per share on September 30, 2002.

On September 20, 2002, we stated "If the money flow were to fall in October, this equity could test its support level of $42.83 and if it were to break below this level it may fall to a low level of $32.45 per share by December 2002. In a worst case scenario, if this stock were to break below that support level it could fall to a low of $14.67 per share in the first quarter of 2003. At such a level we would rate this stock a strong long-term buy."

This equity closed at $43.77 per share on October 4, 2002, and then as the money flow rose $32.9 billion, the stock closed at $58.23 per share on November 25, 2002.

In January 2003, we stated "On January 15, 2003, this stock closed at $56.27 and at that level was fully valued. If the money flow were to fall $67 billion, then this stock could fall to a low level of $32.45 by March 2003. At such a level we would rate this stock accumulate."

That was before the company issued a stock split. On February 18, 2003, Microsoft Corporation issued a 2-for-1 stock split and now there are 160 shares in our Model Portfolio.

On June 18, 2003, this stock closed at $26.07 per share. Perhaps we were overly pessimistic about this stock falling to a pre-split level of $14.67 per share but if the money flow were to fall $56 billion during the following three months then MSFT could fall to a low after split level of $11.40 per share by October 2003.

Rite Aid Corporation (NYSE symbol: RAD) is the largest drug store chain in the United States. The company operates approximately 3,600 drug stores in 29 states. In the past, Rite Aid Corporation expanded rapidly through acquisitions. This stock approached a high level of $50.00 per share in December 1998.

After several missteps and a very heavy debt load, the company was almost driven into bankruptcy. New management sold assets and pared down debt.

In January 2002, we featured the stock of Rite Aid Corporation (NYSE symbol: RAD) in the Buy & Sell section. We stated "If this stock were to maintain its downtrend and fall to approximately $2.80 per share in February 2002, speculators may start to accumulate this equity for a short-term trade." This stock broke through our target level much sooner and closed at a low level of $2.06 per share on January 22, 2002.

In order to slightly diversify our Model Portfolio, 400 shares of Rite Aid Corporation (NYSE symbol: RAD) were bought at $2.57 per share on February 25, 2002. These 400 shares will be held until this equity reaches our revised target level of approximately $7.71 per share and then all of these shares will be sold to lock in our gain.

For several months during the year 2002, this equity was in a slow uptrend therefore this stock will be held long-term until it reaches our sell target level, perhaps in 2004. On June 18, 2003, this stock closed at $4.28 per share and we rate it speculative short-term buy.

Sold: 100 shares of Sun Microsystems, Inc., on June 12, 2003 at $5.47 per share. Sun Microsystems, Inc., (NASDAQ symbol: SUNW) is among the major suppliers of hardware to the Internet. The company continues to introduce competitively priced new servers in order to expand its market share. As additional hundreds of millions of users access the Internet, the demand for servers could grow during the next five years.

As the money flow continued to fall, this equity proceeded to break through its support levels. On August 5, 2002, this stock closed at a low level of $3.53 per share and we stated, "If the money flow were to fall during the next two months, SUNW could break through its support level of $3.53 and may reach a low level of $2.95 per share." As the money flow fell, this stock closed at $2.70 per share on September 19, 2002. This equity continued its downtrend and closed at a low level of $2.42 per share on October 4, 2002.

This equity closed at $4.29 per share on November 29, 2002, and then proceeded to descend. On January 15, 2003, this stock closed at $3.87 per share. After 600 shares of SUNW were sold on January 15, 2003, there were still 100 shares that were bought on March 20, 2001, left in our Model Portfolio

Our initial objective was to hold this stock long-term until it reaches approximately $41.25 per share. Although the short-term trend for this stock appears to be upward, long-term this equity could continue to descend and test its previous support level of $2.42 per share. Therefore, a decision was made to sell 100 shares of SUNW. On June 12, 2003, this stock was sold at $5.47 per share and this trade generated a long-term loss of $1,374.90.

If this stock were to break below its support level of $2.42 it could fall to a low level of $1.15 per share by mid October 2003. At such a level we would rate this stock a speculative buy.

Six hundred shares of SUNW would be bought no later than mid October 2003, preferably below $2.55 per share and added to our Model Portfolio.

WorldCom Group (NASDAQ symbol: WCOEQ) has 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 world's largest and most advanced digital networks that connects local markets in the United States to more than 280 countries and locations worldwide.

Due to the accounting debacle that pushed WorldCom to its bankruptcy, this stock became almost worthless. This equity will be held in our Model Portfolio as a reminder of what could happen to the stock of any company.

On Monday, June 9, 2003, all 280 shares of Intel Corporation (NASDAQ symbol: INTC) were sold at $21.43 per share. This trade has generated $5,980.45 in net cash after commission.

Although our initial objective was to hold this stock long-term, a decision was made to sell it while it's at the recent high level. This stock was held in our Model Portfolio for slightly over eight years and was sold with a long-term gain of $4,590.50, or 330 percent.

If this equity were not to reach a low level of $7.85 per share, by the end of September 2003, four hundred shares of Intel Corporation will be bought, preferably below $13.50 per share and added to our Model Portfolio.

On May 7, 2003, seventy shares of VERT were sold at $1.30 per share. The sale of this equity has generated $72.95 in cash proceeds after commission, and a long-term loss of $998.25. This loss can be deducted from the gain realized on the sale of ADR’s of Ericsson LM Telephone, thus reducing the tax payable on the gain from the sale of the latter equity.

A decision was made to sell 100 shares of Sun Microsystems, Inc., (NASDAQ symbol: SUNW). Although the short-term trend for this stock appears to be upward, long-term this equity could continue to descend and test its previous support level of $2.42 per share. Therefore, a decision was made to sell 100 shares of SUNW. On June 12, 2003, this stock was sold at $5.47 per share.

These 100 shares were bought on March 20, 2001, at $18.82 per share. This trade has generated a long-term loss of $1,374.90, or 72 percent. For tax purposes, this long-term loss can be deducted from the long-term gain generated by the sale of shares of Intel Corporation, thus reducing the tax payable on the gain from the sale of the latter equity.

If the stock of Sun Microsystems, Inc., were to break below its support level of $2.42 it could fall to a low level of $1.15 per share by mid October 2003. At such a level we would rate this stock a speculative buy.

The cash proceeds received from the sale of 100 shares of SUNW will be used to buy an additional 200 shares of SUNW no later than mid October 2003, preferably below $2.55 per share. If this equity were not to fall to our target level, the cash will be used to buy another stock.

The cash proceeds from these trades were added to the existing cash and as of June 18, 2003 there was $41,355 in cash in our Model Portfolio.

Advanced Micro Devices, Inc., (NYSE symbol: AMD) manufactures microprocessors, flash memory devices, data communications products, and network products. While the demand for microprocessors continued to grow worldwide in the year 2000, Intel Corporation was not able to produce enough chips due to insufficient manufacturing capacity. During that time AMD was able to increase its market share. AMD and Intel continue their fierce competition.

AMD could continue to spend a large percentage of its gross revenues on research and development and try to keep pace with Intel by introducing faster processors to the market. As AMD sells a larger quantity of higher priced processors, the average selling price will continue to rise, thus improving profit margins.

On June 18, 2003, this stock closed at $6.75 per share. This equity is in a very slow downtrend. There is a probability that AMD could finally reach our target level of $2.50 per share by October 2003. If this equity were to reach such a low level then 1,000 shares will be bought immediately and added to our Model Portfolio.

On April 17, 2003, we added the warrants of Elan Corporation, plc, to our buy list. These warrants trade on NASDAQ under the symbol ELANZ and expire on August 31, 2005. As the stock tumbled, the price of warrants fell along with it and on October 22, 2002, ELANZ closed at a low of $0.06 per warrant. As the money flow rose $182,000 these warrants proceeded to ascend and closed at $0.60 on January 13, 2003. On June 18, 2003, these warrants closed at $0.24 per warrant.

Our initial buy target level for these warrants was $0.15 per warrant. On May 16, 2003, we lowered our buy target level to $0.10 per warrant. As soon as these warrants reach our buy target level 2,000 warrants would be bought and added to the 500 warrants that are already held in our Model Portfolio. The risk of owning these warrants is high; therefore only speculators should buy them.

Cisco Systems, Inc., (NASDAQ symbol: CSCO) makes data networking equipment, data switches, and networking gear. Cisco Systems continues to expand its market share. This stock is in a downtrend. On June 18, 2003, this stock closed at $18.73 per share. If the money flow were to fall, in a worst case scenario this stock could descend to a low of $5.75 per share and 200 shares would be bought and added to our Model Portfolio.

Oracle Corporation (NASDAQ symbol: ORCL) is the world's third largest software company. The company makes database management system software. Approximately 90 percent of corporate websites are using Oracle's database software. On June 18, 2003, this stock closed at $13.42 per share. If the money flow were to fall $17 billion during the next three months this stock could descend to a low level of $4.97 per share. At such a level 800 shares of Oracle Corporation would be bought and added to our Model Portfolio.

RF Micro-Devices, Inc., (NASDAQ symbol: RFMD) designs, develops, manufactures, and markets semiconductors and components for the wireless handset market, wireless Local Area Networks (LAN), pagers, the broadband cable communications sector, and wireless security. The company offers a wide selection of products such as amplifiers, mixers, single chip transmitters, receivers and transceivers.

Among the microprocessors made by the company are gallium arsenide-based chips that are the most expensive and generate the highest profit margin. The company's largest customer is the Nokia Corporation.

This equity is in a slow long-term downtrend. On June 18, 2003, this stock closed at $6.28 per share. If the money flow were to fall $1.1 billion during the next three months, then this stock could descend to $1.65 per share. At such a price level 800 shares of RF Micro-Devices, Inc., would be bought and added to our Model Portfolio.

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.

Advertising revenues on the web in the United States alone are projected to reach an average of over $8 billion annually within a year. Yahoo, Inc., could receive approximately 20 percent of these revenues; thus we estimate that the company's annual revenue could grow to approximately $1.6 billion in the year 2003. On May 16, 2003, this stock closed at $27.75 per share. and was overvalued. As the money flow continued to ascend, this equity maintained its uptrend and closed at $32.30 per share on June 18, 2003.

Our previous buy target level was $4.77 per share and we estimated that YHOO could reach it by October 2003. This stock ascended at a very slow pace and it could also descend at a slow pace. There is a probability that this stock could fall to approximately $9.95 by mid October 2003. At such a level 200 shares would be bought and added to our Model Portfolio. If the money flow were to rise $2.8 billion this stock could ascend to approximately $17.75 per share by mid December 2003 and would be sold immediately.

Afterwards, if the money flow were to fall $4.2 billion during the following four months this equity could descend and reach a low level of approximately $7.25 by mid April 2004. At such a level it would be bought again and added to our Model Portfolio.

The stock of Motorola, Inc., (NYSE symbol: MOT) is in a slow downtrend. We will continue to monitor this equity. In September 2002, we stated "If money flow continues to fall, this stock could descend below $8.55 per share, perhaps in October 2002. At such a level 200 shares will be bought and added to our Model Portfolio."

On October 18, 2002, this stock closed at $7.77 per share. Although this equity fell below our buy target level, it was not bought. On June 18, 2003, this stock closed at $9.28 per share. This stock could maintain its slow downtrend and reach a low level of $4.95 by October 2003. At such a level 300 shares would be bought and once again added to our Model Portfolio.

We will continue to monitor Dell Computer Corporation (NASDAQ symbol: DELL). This stock closed at $29.82 per share on November 15, 2002, and was trading at approximately 49 times earnings. In our May issue we stated: "On May 16, 2003, this stock closed at a high level of $31.19 per share and was fully valued."

Depending on the money flow, volume, and other key indicators, this stock could break through its support level of $16.65. There is a slight probability that this stock could fall to approximately $10.15 per share by mid October 2003. If DELL were to reach such a low level, 200 shares would be bought and added to our Model Portfolio. If this stock doesn't reach our buy target level, then the cash will be used to buy more shares of Advanced Micro Devices, Inc., and another stock.

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. On June 18, 2003, this equity closed at $17.85 per ADR. This equity is still in a long-term downtrend. If the money flow were to fall $25 billion during the next four months, in a worst case scenario this equity could descend to a low level of $2.95 per ADR. If this equity were to reach such a low level then 800 ADR's of Nokia Corporation would be bought and once again added to our Model Portfolio.

On October 18, 2002, we added the stock of Juniper Networks, Inc., (NASDAQ symbol: JNPR) to our buy list. The company makes Internet Protocol routers. On June 18, 2003, this stock closed at $13.90 per share. If this stock were to reach a low of approximately $2.15 per share, three hundred shares will be bought and added to our Model Portfolio. We will wait patiently until November 2003 for this stock to reach our buy target level.

We also added the stock of EMC Corporation (NYSE symbol: EMC) on October 18, 2002. If this stock were to reach a low of $2.55 per share, five hundred shares will be bought and added to our Model Portfolio. EMC Corporation is the major supplier of enterprise storage devices, software, and services. The company's top of the line Symmetrix® system can hold 19 terabytes of data on 384 individual drives.

EMC Corporation acquired Data General in October 1999, and that added a selection of mid-priced storage devices. Although EMC Corporation's hardware and software is the most expensive, 98 percent of customers are willing to recommend it to their colleagues and business associates.

As the Internet continues to grow and hundreds of millions of people go online during the next decade, we project that the need for storage devices could continue to grow in double-digits. In our opinion, EMC Corporation's annual revenues could grow ten-fold, and reach $60 billion in nine years. During the past decade, this was the top performing stock on the NYSE. The company consistently split its stock, and the most recent stock split was on June 5, 2000. After the split, the stock continued to ascend and closed at $103.18 per share on September 20, 2000.

During the carnage in the technology sector this stock plummeted to a low level. On Friday, October 4, 2002, the company announced that it will cut 1,350 jobs and furthermore added that it did not expect to return to profitability in the second half of the year 2002. The stock fell $1.18 on that day and closed at $3.83 per share.

On June 18, 2003, this stock closed at $10.32 per share and was fully valued. We have lowered our buy target level for this stock to $2.55 per share. If this stock were to reach such a level speculators may want to buy it and hold it at least two years. Do not commit more than five percent of your cash to this stock.

EMC has the largest market share for storage equipment. As the sales rebound and earnings improve, this stock could establish a very strong uptrend, although it may take a while longer to reach its high. This stock may reach our sell target level of $22.12 in 2005, and speculators should then sell it immediately to lock in their gain.

Corning Incorporated (NYSE symbol: GLW) is a major supplier of fiber-optic cable. Its inventory has been depleted to a low level and as the demand improves the company could sell more products. Afterwards this stock may establish a strong upward trend.

On March 11, 2002, this stock reached a high of $8.90 per share. Then, as money flow fell $631 million during the next four weeks, this equity proceeded to fall and closed at $6.38 per share on May 10, 2002. This stock continued its overall downtrend and closed at a low of $1.10 per share on October 8, 2002.

In February 2003 we stated "This equity closed at $5.18 per share on February 14, 2003 and was fully valued at that level. If the money flow were to fall $1.4 billion during the next three months, this equity could descend to $1.71 per share. At such a level 400 shares of Corning Incorporated will be bought and added to our Model Portfolio."

On June 18, 2003, this equity closed at $7.95 per share. We are maintaining our buy target level of $1.71 per share and this equity could reach it by mid October 2003.

Vitesse Semiconductor Corporation (NASDAQ symbol: VTSS) makes gallium arsenide semiconductors that are used by manufacturers of networking equipment. On August 20, 2002, this equity was removed from the S&P 500 Index and 31.6 million shares were traded on that day.

At its height, this stock closed at $103.83 per share in February 2000 and then proceeded in a downtrend. Among the company's major customers are Cisco Systems and Lucent Technologies. When that sector rebounds, the stock of Vitesse Semiconductor Corporation could ascend to a higher level but at this time this equity is in an overall downtrend. On June 18, 2003, this stock closed at $5.62 per share. This stock could test its support level of $1.55 per share by mid September 2003, or beginning of October 2003. At such a level 800 shares would be bought and added to our Model Portfolio.

Sun Microsystems, Inc., (NASDAQ symbol: SUNW) is among the major suppliers of hardware to the Internet. The company continues to introduce competitively priced new servers in order to expand its market share. On January 15, 2003, six hundred shares of SUNW that were in our Model Portfolio were sold at $3.81 per share.

On June 18, 2003, this stock closed at $5.32 per share. Recently money flow proceeded to ascend and if this were to continue, this equity could reach approximately $6.75 per share by mid August 2003. Afterwards, if the money flow were to fall then this stock could descend and test its support level of $2.42 per share. If it were to break below its support level of $2.42 it could fall to a low level of $1.15 per share by mid November 2003. At such a level 1,000 shares would be bought and added to our Model Portfolio.

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 phone companies to increase capacity and to provide high speed Internet access.

This high flying stock closed at a high of $81.75 per share in December 1999 and has been in a downtrend ever since. At that time no one would have thought that this equity could fall below $10.00 per share. As the money flow fell, this stock continued to plunge and closed at $0.58 per share on October 11, 2002.

On October 18, 2002, Lucent Technologies announced that it will seek shareholder approval to do a reverse stock split to bring its stock price between $15.00 and $25.00 per share. If this reverse stock split were approved it could be as bad as 1-for-36 shares. In such a horrendous scenario an investor who owns 100 shares would receive less than three shares.

We will monitor this equity and if the company were to issue a reverse stock split, the stock could pull back to a lower lever after two or three months. When this stock reaches its low level we may buy it again and add it to our Model Portfolio.

Nortel Networks Corp. (NYSE symbol: NT) is the leading provider of networking solutions, including optical networking solutions and wireless networking systems.

In September 2002, the company announced that it plans to do a reverse stock split of 1-for-20, or higher, in the beginning of 2003.

We will monitor this equity and if the company were to issue a reverse stock split, the stock could pull back to a lower lever after two or three months. When this stock reaches its low level we may buy it again and add it to our Model Portfolio.

Our Model Portfolio is already extremely overweighed in the technology stocks. We advise investors against acquiring so many technology stocks in their portfolios. Investors may want to buy some of these stocks and add them to their portfolios. Speculators who are below thirty years of age may allocate up to 50 percent of their portfolios to technology stocks.

Investors who are just starting out should establish a Roth Individual Retirement Account (commonly called a Roth IRA) and may buy equities listed below in our Model Portfolio II when they reach their lowest level. In the year 2002, the annual contribution limit for Roth IRA for these taxpayers who were under age 50, was $3,000.

The Roth IRA has many advantages. One of the biggest advantages is that no taxes are due on qualified withdrawals, while withdrawals from the traditional IRA are taxable.

By not having to pay taxes to the government, a retiree may be able to save over $200,000 throughout his or her retirement years. Surely, you could think of many ways to spend $200,000 on yourself and your family. Furthermore, an investor could trade stocks, knowing that any capital gains, short-term and long-term, achieved in the Roth IRA are not taxable. This allows each investor to reinvest these gains and to generate a much higher annual return on their portfolio.

Investors should be aware that Model Portfolio II is heavily weighed in the technology stocks. The risk of such asset allocation is much greater than owning a portfolio of stocks in several sectors.

Ericsson LM Telephone (NASDAQ symbol: ERICY) is a leading supplier of mobile phones and telecommunications equipment. On May 10, 2002, two hundred American Depository Receipts were bought at $2.29.

On October 23, 2002, the company issued a 1-for-10 reverse stock split and afterwards instead of 200 ADR’s there were only 20 ADR’s in our Model Portfolio II. On December 16, 2002, twenty ADR’s of ERICY were sold at $8.53 per ADR. The cash proceeds from this trade will be held in the Model Portfolio II. When the stock of Advanced Micro Devices, Inc., (NYSE symbol: AMD) reaches our buy target level of approximately $2.50 per share, additional cash will be added and one hundred shares of AMD will be bought and added to Model Portfolio II.

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 May 10, 2002, one hundred shares were bought at $4.46 per share.

On October 18, 2002, Lucent Technologies announced that it will seek shareholder approval to do a reverse stock split to bring its stock price between $15.00 and $25.00 per share. If shareholders were to approve this reverse stock split at the company’s next annual meeting, the reverse split could be as bad as 1-for-36 shares. In such a horrendous scenario an investor who owns 100 shares would receive less than three shares. On January 15, 2003, one hundred shares of LU were sold at $1.77 per share. The cash received from this trade will be held in Model Portfolio II.

Nortel Networks Corp. (NYSE symbol: NT) is the leading provider of networking solutions, including optical networking solutions and wireless networking systems. On May 10, 2002, one hundred shares were bought at $2.84 per share.

In September 2002, Nortel Networks announced that it plans to do a reverse stock split of 1-for-20, or higher, in the beginning of 2003. Due to this horrendous plan a decision was made to sell this stock. On January 15, 2003, one hundred shares of NT were sold at $2.43 per share. The cash received from this trade was added to the existing cash in Model Portfolio II.

Oracle Corporation (NASDAQ symbol: ORCL) is the world’s third largest software company. The company makes database management system software. Approximately 90 percent of corporate Web sites are using Oracle’s database software. On May 10, 2002, one hundred shares of Oracle Corporation were bought at $8.37 per share. This stock will be held long-term.

Rite Aid Corporation (NYSE symbol: RAD) is the largest drug store chain in the United States. The company operates approximately 3,600 drug stores in 29 states. In the past, Rite Aid Corporation expanded rapidly through acquisitions. This stock approached a high level of $50 per share in December 1998.

After several missteps and a very heavy debt load, the company was almost driven into bankruptcy. New management sold assets and pared down debt. After reaching a low level of $2.13 per share in December 2000, this stock proceeded to rebound and closed at $9.74 per share on June 15, 2001. Then, the stock reversed its trend and proceeded to fall. On May 10, 2002, one hundred shares were bought at $3.07 per share. These 100 shares of RAD will be held until this equity reaches our revised target level of approximately $7.71 per share and then all of these shares will be sold.

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. On July 10, 2002, one hundred shares of Sun Microsystems were bought at $5.12 per share and added to the Model Portfolio II.

Our initial objective was to hold this stock long-term until it reaches approximately $41.25 per share. Although short-term trend for this stock appears to be upward, long-term this equity could continue to descend. Therefore, a decision was made to sell this stock. One hundred shares of SUNW were sold on June 12, 2003, at $5.47 per share and the cash was added to existing cash in Model Portfolio II.

After the recent trade there was $1,056.39 of cash in Model Portfolio II.