Once again, we would like to remind investors that money flow is among the major factors that affect the price of a stock. In January 2002, money started flowing out of the stock of Computer Associates International, Inc. (NYSE symbol: CA). We stated in the February, 2002, section “Stocks for traders” that “If this stock were to break through its next support level, it may fall to $22.70 in March, 2002 and speculators may buy it at this level.” (continued in: Investing).

Silicon Graphics, Inc. (NYSE symbol: SGI) is a major manufacturer of workstations, servers, and visualization supercomputers. The company derives approximately 47 percent of its revenues from sales overseas. (continued in: Buy & Sell ).

Speculators who like to trade frequently could buy stocks listed in this section. Investors should be aware that short-term trading involves a much greater risk, and preferably no more than 10 percent of one’s portfolio should be invested in these stocks. Many of the stocks in the technology sector should be bought when they reach low levels. Speculators could achieve short-term gains of up to 100 percent, or higher, on some of these stocks.

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, (continued in: Stocks for traders).

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. ( continued in Model Portfolio).

Editor's Page

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 March 15, 2002, the stock of Silicon Graphics, Inc. (NYSE symbol: SGI) rose from its 52-week low of $0.32 per share to $4.27 per share. These wondering whether to hold or sell this stock will want to read the “Buy & Sell” section.

Although the Nasdaq Composite Index has recently fallen 191 points (from January 4, 2002, to March 15, 2002), the stock valuations are still too high. Therefore, investors and speculators should wait until they reach our “buy target level.” For a list of stocks and their recommended buy and sell target levels, please visit our section titled “Stocks for traders”.

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

To read about recent additions to our model portfolio, read Bought. This month’s section details our purchase of 400 shares of Rite Aid Corporation at $2.57 per share and our “sell target level” for this stock.

Read our Buy Alert section to find out which stocks we will be buying and at what target levels. Among these are technology stocks for which we have compiled a list of potential purchases.

Finally, 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.

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

JESSICA BEZOLD, Editor

Investing

Once again, we would like to remind investors that money flow is among the major factors that affect the price of a stock. In January 2002, money started flowing out of the stock of Computer Associates International, Inc. (NYSE symbol: CA). We stated in the February, 2002, section “Stocks for traders” that “If this stock were to break through its next support level, it may fall to $22.70 in March, 2002 and speculators may buy it at this level.”

As institutional investors proceeded to sell this stock, the money flow continued to fall at an extremely fast pace. By February 22, 2002, money flow had fallen $1.5 billion during the previous four weeks and CA closed at a low level of $15.99 per share.

Our target level for CA was $22.70 per share. Speculators who bought this equity at such a level may hold it until it revisits its previous high of $37.50 per share, perhaps by May or June 2002, and when it does the stock should be sold immediately. On March 15, 2002, CA closed at $18.50 per share and we rate it a strong speculative short-term buy.

This is the time of year when the sales of microprocessors fall from their high level reached by the end of the previous year. Typically, this is reflected in the price of the stock of each chip manufacturer.

As usual, the price of Intel Corporation (NASDAQ symbol: INTC) and Advanced Micro Devices (NYSE symbol: AMD) stocks is already falling. There is a probability that INTC may test its support level of $21.45 per share by the end of March, 2002. At such a level we would rate this stock a strong short-term, or long-term buy. The stock of Advanced Micro Devices may test its support level of $8.35 per share by the end of March, 2002, or beginning of April, and would be a screaming buy at such a level.

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. As the money flow improved, this stock closed at a high of $3.72 per share on March 12, 2002.

On March 15, 2002, RAD closed at $3.47 per share and speculators may still want to buy this stock. When earnings and money flow improve, this timely stock may reach approximately $10 per share in the second half of 2002 and speculators should sell it immediately.

In order to slightly diversify our Model Portfolio, 400 shares of Rite Aid Corporation were bought on February 25, 2002, at $2.57 per share. These 400 shares will be held short-term and as soon as this equity reaches our target level of approximately $10 per share, all of these shares will be sold to lock in a short-term gain.

The Dow Jones Industrial average continued its rally and on Friday, March 15, 2002, gained 90.09 points, closing at 10607.23. The stock valuations are still too high and if investor sentiment were to change, the Dow may still reverse its upward trend and then test its support level of 9075 in the beginning of April 2002.

The Nasdaq Composite index closed at 1868.30 on March 15, 2002, and may continue its downtrend. By April 8, 2002, the Nasdaq Composite index may test its support level of 1570, depending on money flow and investor sentiment.

Speculators should refrain from buying equities at this time, except for these stocks that have reached their bottom. Tech stocks may still provide speculators with the highest gains once the economy starts to improve and the corporations resume purchases of software and hardware. Speculators should be very selective and may buy some of the tech stocks that are listed in the section “Stocks for traders” when these reach our “buy” target levels. Short-term, some of these tech stocks may provide speculators with gains as high as 100 percent.

Buy & Sell

Silicon Graphics, Inc. (NYSE symbol: SGI) is a major manufacturer of workstations, servers, and visualization supercomputers. The company derives approximately 47 percent of its revenues from sales overseas. Silicon Graphics acquired Cray research in fiscal year 1997.

This stock closed at an extremely low level of $0.32 per share on September 21, 2001. As the money flow proceeded to improve, this stock closed at $2.12 per share on November 11, 2001. This stock maintained its upward trend and closed at $4.27 per share on March 15, 2002.

At this level the stock is fully valued. Speculators who bought this stock below $1 per share should sell it to lock in their short-term gain. There is a probability that this equity may soon reverse its upward trend and proceed to fall. This stock may test its support level by the end of September, 2002 and if it were to fall to approximately $1.25 per share, speculators may want to buy it for a short-term trade. On March 15, 2002, this stock closed at $4.27 per share and we downgraded it to sell.

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.

Between the year 2000 and 2001, American Depository Receipts rewarded investors with substantial gains. On June 20, 2001, this equity closed at $65.00, more than doubling in value in less than two years.

Afterwards, these ADR’s proceeded to fall at a slow pace until January 17, 2002, when this equity closed at $44.80. Since then, the money flow proceeded to fall at a fast pace and by February 5, 2002, was down $3.58 billion. On February 25, 2002, this equity closed at a low level of $12.55 per ADR, the lowest level in five years.

The ADR’s of ELN closed at $15.33 on March 15, 2002. At such a level this equity is oversold and we rate it a speculative strong buy. Speculators, who are willing to patiently hold this equity for one year, may be rewarded with a gain of approximately 100 percent.

Albertson’s, Inc. (NYSE symbol: ABS) is the second largest food-drug chain in the United States. After the merger with American Stores Company that was finalized on June 23, 1999, Albertson’s operates over 2,400 stores in 38 states. Among the stores operated by the company are Albertson’s, Save-On, Osco Drug, Lucky Stores, Jewel, and Acme Markets.

In our opinion, the merger with American Stores Company was the best decision ever made by the management of Albertson’s, Inc. The merger will allow the company to achieve greater economy of scale, thus improving profit margins.

We featured this stock in September 2000, in “Buy & Sell” section when it closed at $21.50 per share. We stated, “This timely stock could revisit its recent high of $38.88 by November 2000.” This stock proceeded in a slow upward trend and closed at a high of $36.56 on August 24, 2001.

After September 11, 2001,event, this equity proceeded to fall and reached a low level of $30 per share on September 21, 2001. Afterwards, as the money flow improved this stock proceeded to establish a strong upward trend and closed at $35.44 per share on December 5, 2001.

Since this stock was not able to break through its previous resistance level, it fell sharply and closed at $30.45 per share on December 18, 2001. As the money continued to flow out of this equity, this stock maintained its downtrend and closed at $27.39 per share on February 22, 2002.

Then, as the money flow increased by $360 million this stock rose sharply and closed at $31.13 per share on March 1, 2002.

On March 15, 2002, this stock closed at $32.02 per share. At this level this stock is fully valued and speculators who own it may want to sell it. This stock may test its support level of $27.39 and if it were to break through this level it may even fall below $24.75 per share in April 2002.

On the other hand, if the money flow were to increase sharply, this stock may revisit its high and test its resistance level of $35.44 per share. Speculators should always remember that money flow is among the key factors that affect the price of a stock; therefore money flow should be monitored every day.

Stocks for traders

Speculators who like to trade frequently could buy stocks listed in this section. Investors should be aware that short-term trading involves a much greater risk, and preferably no more than 10 percent of one’s portfolio should be invested in these stocks. Many of the stocks in the technology sector should be bought when they reach low levels. Speculators could achieve short-term gains of up to 100 percent, or higher, on some of these stocks.

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.

In 1999, the company’s wafer fabrication facility had a maximum production capacity of approximately 35,000 four-inch wafers per year. The company planned to increase the annual capacity to 60,000 four-inch wafers by the end of the calendar year 2000. Furthermore, in order to expand manufacturing capacity, the company began construction of a second wafer fabrication facility in 1999. The construction was completed in 2001 and eventually the total annual output from this facility alone could reach 210,000 four-inch wafers.

The company plans to increase the production capacity gradually, to meet the market demand. RF Micro-Devices, Inc. estimated that the cost to build and equip this facility would be approximately $140 million for the first phase and $180 million for the second phase.

In our opinion, as the demand for wireless handsets continues to grow worldwide, the long-term outlook for RFMD is excellent. Although this stock may not repeat its previous performance, (It rose from a low of $2.78 per share in the second fiscal quarter of 1999 to $184.50 in the fourth fiscal quarter of 2000) it could generate a return up to 2,000 percent during the next five years, and $1,000 invested in this stock now, may appreciate to $20,000 by the year of 2007.

This sector is very volatile. Therefore, investors who buy this stock should prepare themselves for a bumpy ride.

On December 11, 2001, this stock closed at $25.52 per share. This stock was already in a downtrend and on January 8, 2002, closed at $19.40 per share. On March 15, 2002 this stock closed at $18.52 per share.

If this stock were to break through its support level of $14.30 per share, it may test its next support level of $9.06 per share, in April, 2002. At such a level, this stock would be a screaming buy.

As the sales of the wireless handsets improve, the demand for chips made by RF Micro-Devices, Inc. may increase and the stock could reach $29 per share by the end of the first half of 2002 and at such a level should be sold immediately.

Computer Associates International, Inc. (NYSE symbol: CA) designs business application software and systems management software that allows computers to run efficiently. In addition, the company provides software that allows corporations to manage Web infrastructure. The company is the third largest after Microsoft Corporation and Oracle Corporation.

After reaching a high of $79.44 in January 2000, the stock proceeded to descend and closed at $24.78 per share on July 31, 2000. Due to the continued bear market, this stock closed at a low level of $22.70 per share on September 21, 2001.

As the money flow into this stock improved, this equity closed at $36.70 per share on January 8, 2002. Last month we stated: “This stock is fully valued at this level.”

During January 2002, money flow fell by one billion dollars and this stock closed at a low level of $27.69 on February 7, 2002, down 8.08 for the day. As institutional investors proceeded to sell this stock, money flow continued to fall at an extremely fast pace.

By February 22, 2002, money flow fell by $1.5 billion during the previous four weeks and CA closed at a low level of $15.99 per share. Our buy target level for CA was $22.70 per share. Speculators who bought this equity at such level may hold it until it revisits its previous high of $37.50 per share, perhaps by May, or June 2002, and when it does the stock should be sold immediately.

On March 15, 2002, CA closed at $18.50 per share and we rate it a strong speculative short-term buy. The risk of owning this stock is above average, therefore it should only be bought by speculators and it should not account for more than five percent of one’s portfolio. This stock may reach $37.50 by May, or June, 2002 and at such a level speculators should sell it immediately. On the other hand, patient investors may want to hold this stock long-term and if it were to reach our target level of $65 per share in 2003, should sell it immediately.

People Soft Inc. (NASDAQ symbol: PSFT) designs and distributes enterprise resource planning software for large and medium size companies. The latest software can even manage payroll, benefits administration, pension administration, and scheduling.

On March 31, 2000, we stated, “There is a probability that this stock has already reached its top and may proceed in a downward direction.” In April 2000, the stock of People Soft, Inc. proceeded to fall, and closed at $13.79 per share on May 31, 2000.

In November 2001, we stated: “This equity may continue its upward trend but it could find a very strong resistance at the $40 level.” On December 6, 2001, this stock closed at $41.00 per share and then proceeded to pull back.

Recently, this stock was already in a downtrend and on February 21, 2002 closed at a low of $27.89 per share. Afterwards, as money flow rose $1.8 billion, this equity proceeded to test its resistance level and closed at $38.00 per share on March 11, 2002. This equity may continue its downtrend and in April 2002, this stock may test its support level of $17.67 per share.

Speculators should wait at least one week, because if this stock were to break through this support level, the next support level is $13.79. If this equity were to reach such a level, speculators may buy it for a short-term trade.

On March 15, 2002, this stock closed at $36.68 per share. If money flow were to improve, the stock of People Soft may reach approximately $35 per share by the end of May, or June, 2002. If it does, speculators should sell it immediately to lock in their short-term gain.

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.

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. In our opinion, due to the strong demand for cellular phones and handheld wireless devices, long-term, the demand for chips made by LSI will continue to grow.

On March 15, 2002, this stock closed at $16.98 per share and may continue its slow downtrend. By April 8, 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. At such a level, speculators should sell it immediately to lock in their short-term gain.

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.

The stock of AMD reached a high of $94.63 per share on June 21, 2000 (after the 2-for-1 stock split that was issued on August 22, 2000, this high was adjusted to $47.32). Before the company issued the split, the stock was already in a downtrend. During the sell-off in chip stocks, this stock closed at $13.81 per share on December 29, 2000.

Recently, due to the strong money flow, this stock proceeded to rebound and closed at $20.00 per share on January 4, 2002. On January 8, 2002, this stock closed at $19.90 per share and we stated: “and in our opinion is fully valued at this level.”

On March 15, 2002, this stock closed at $14.60 per share. This stock could test its support level of $8.00 per share by April 8, 2002 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. AMD could reach approximately $27.50 per share by May, or June 2002, and at such level speculators should sell it immediately to lock in their short-term gain.

Citrix Systems, Inc. (NASDAQ symbol: CTXS) is a worldwide leader in the application serving software that allows its customers to run any application on any device over any connection, wired or wireless, or the Web. This company operates in 12 countries and has over 100,000 customers and over 24 million users worldwide. That includes 90 percent of Fortune 500® companies.

In the year 2000, Citrix Systems, Inc. entered into Application Service Provider partnership agreements with IBM and British Telecom. The company signed a major systems integrator agreement with Compaq to sell Citrix software on its servers and provide professional services support. Furthermore, the company announced Web Enterprise Information Portal licensing agreements with Yahoo! and My SAP.com ™.

This stock was a great performer in the year 2000, when it reached a high of $107.40 per share. Then the stock proceeded in a downtrend. On March 14, 2001, this stock fell to $17.31 per share. As the market proceeded to rally, this stock reversed its downtrend and on May 31, 2001, this equity closed at $23.90 per share.

Recently, this stock was very resilient and traded in a narrow range. On January 8, 2002, this stock closed at $22.85 per share and at this level was fully valued. This equity closed at a low level of $13.50 per share on February 22, 2002, then proceeded to test its resistance level and closed at $18.41 per share on March 14, 2002.

Although the company reported earnings that were in line with expectations, this stock proceeded to fall. On March 15, 2002, this stock closed at $18.00 per share. This stock may test its recent support level of $13.50 by April 5, 2002, and speculators may want to buy it at this level. If the money flow into this stock were to improve, this equity could reach approximately $27.50 per share by the end of July, 2002.

Siebel Systems, Inc. (NASDAQ symbol: SEBL) is a major supplier of management software for large corporations.

After reaching a high of $119.32 on November 7, 2000, this stock proceeded to fall. By December 14, 2000, this stock was down to $79.81 per share.

On April 3, 2001, this stock closed at a low of $23.06 per share, then reversed its downtrend and closed at $54.97 on May 21, 2001. In August’s 2001, Buy & Sell we stated: “The next support level is $30 and if this stock were to break through this level, it could retest its April support level of $23.06.”

This stock broke through this level on August 23, 2001, and closed at $21.90 per share. Due to the September 11 tragedy, this stock continued to fall and closed at $12.99 on September 27, 2001.

On January 8, 2002, this stock closed at $33.30 per share. Due to the very strong money flow, this stock closed at a high of $37.20 per share on January 25, 2002, and then proceeded to fall

On February 28, 2002, this stock closed at a low of $27.76 per share, then proceeded to test its resistance level and closed at $36.64 on March 11, 2002.

This stock closed at $34.12 per share on March 15, 2002. This stock may test its support level of $16.45 per share by the end of May, 2002.

At such a level this stock would be a strong buy. As the earnings outlook improves, this stock may test its resistance level of $33.30 by the end of August, 2002. Once this stock reaches such a level, speculators should sell it immediately to lock in their short-term gain.

EMC Corporation (NYSE symbol: EMC) 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 ten years. During the past decade, this was the top performing stock on NYSE. The company consistently splits its stock, and the most recent stock split was 2-for-1 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 proceeded to fall and closed at $39.76 per share on February 28, 2001. Due to the tremendous selling pressure, this stock continued to fall and closed at $11.16 per share on September 21, 2001.

After closing at a high level of $17.95 on December 5, 2001, this stock proceeded to fall. This equity was in a slow downtrend and finally on February 28, 2002, tested its support level and closed at $10.92 per share. On March 15, 2002, this stock closed at $11.44 per share. At this level we rate this stock a speculative strong buy. Speculators may buy this stock for a short-term trade.

EMC has the largest market share for storage equipment. As the sales rebound and earnings improve, this stock may test its resistance level of $25.50 by the end of May, or June 2002, and speculators should sell it immediately.

Model Portfolio

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 maintained its strong upward trend and closed at a high of $53.53 per share on March 8, 2002.

On March 15, 2002, AMAT closed at $50.72 and at the recent level this stock is fully valued. Speculators who own this stock may want to sell half of the shares to lock in their gain.

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 may even fall, this stock may test its support level. Although this stock may not fall to its support level of $27.87 per share that was reached last year, it may test its support level of $31.60 by the end of August 2002. At such level we would rate this stock 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 $1.55 per share on March 15, 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 March 15, 2002, this stock closed at $16.54 per share. This equity may test its support level by the end of March 2002 and while it may not revisit its low of $11.24 reached on September 27, 2001, 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.

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. On March 15, 2002, this stock closed at $10.33 per share.

This equity may test its support level of $7.85 by the end of 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. 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. Due to the weakness in the sector this stock maintained its downtrend and closed at $12.20 per share on March 15, 2002. 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 level.

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.

Corning Incorporated (NYSE symbol: GLW) 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 establish a strong upward trend.

On March 15, 2002, this stock closed at $7.82 per share. As more money flows into this equity it may maintain its 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, or May 2002.

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 $25.72 per share on March 15, 2002. By the end of March, or beginning of April 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 March 15, 2002, ERICY closed at $4.39 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.” This stock is still in a downtrend and on March 15, 2002, closed at $31.74 per share. By the end of March 2002, this stock may pull back below $26 per share and at such level investors may want to 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 March 15, 2002, this stock closed at a low level of $0.85 per share, and we rate it a speculative strong buy.

JDS Uniphase (NASDAQ symbol: JDSU) 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.

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.

On March 15, 2002, this stock closed at $6.10 per share. These 200 shares will be sold as soon as this stock reaches approximately $15 per share, perhaps by the end of April, or May 2002, to lock in a short-term gain.

LSI Logic Corporation (NYSE symbol: LSI) makes chips for: cellular phones, satellite set-top boxes, DVD products and personal computers. The company derives 58 percent 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 percent 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. On March 15, 2002, this stock closed at $16.98 per share. By the end of March, or beginning of April 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 2003.

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 March 15, 2002, this stock closed at $4.89 per share. At this level we rate this stock a strong buy. Buy this stock 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. Then, this stock proceeded to test its resistance level and closed at $64.34 per share on March 11, 2002.

This stock is still in a downtrend and on March 15, 2002, closed at $62.49 per share. By the end of March, or beginning of April 2002, this stock may test its support level 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 March 15, 2002, this stock closed at $14.00 per share. This stock may test its support level of $11.80 in the beginning of April 2002, and at this level we would 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 $22.11 on March 15, 2002. This equity is already in a downtrend. These ADRs may test their support level of $15.20 by the end of 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 March 15, 2002, this stock closed at $5.06 per share and we rate it a strong buy. This stock will be held in our Model Portfolio until it reaches approximately $60 per share, perhaps in the second half of 2003, 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. We stated last month “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.”

As the money flow fell by $2.2 billion during the past two weeks, this stock continued to fall and closed at $12.60 per share on March 15, 2002. At such price level, we rate this stock a strong buy. Speculators who buy this stock now should sell it as soon as it reaches our target level of $25 per share, perhaps by June 2002.

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 March 15, 2002, this stock closed at $41.37 per share. This stock may test its support level of $35.80 by the end of March 2002, and at such 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. This stock tested its support level of $8.07 on February 22, 2002, a month sooner than we estimated. Since January 8, 2002, money flow fell tremendously and $9.4 billion went out of this stock by March 15, 2002.

This stock closed at $9.06 per share on March 15, 2002. There is a slight probability that SUNW may revisit its support level of $8.07 by the end of March 2002, and at such 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 March 15, 2002, this stock closed at $0.80 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 $7.40 per share on March 15, 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 March 15, 2002, this stock closed at $18.72 per share. Due to the strong money flow of $1.4 billion during the prior two weeks, this stock went up and tested its resistance level.

This stock is still in a downtrend and may test its support level of $9 per share in the beginning of April 2002. At such a level this stock would be a speculative, strong long-term buy. On the other hand, speculators may want to buy YHOO for a short-term trade and sell it as soon as it reaches approximately $25 per share, perhaps by August 2002.

Bought

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 short-term and as soon as this equity reaches our target level of approximately $10 per share, all of these shares will be sold to lock in a short-term gain.

The stock of Sun Microsystems, Inc. (NASDAQ symbol: SUNW) reached our buy target level. On February 28, 2002, three hundred shares were bought at $8.61 per share. These 300 shares will be sold as soon as the stock reaches approximately $18 per share, perhaps by the end of April or May, 2002, to lock in a short-term gain.

Buy Alert

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 March or the beginning of April, 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 the end of March or beginning of April 2002, this stock may test its support level of $11.20 per share and at such 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 300 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 or beginning of April, 2002, and then this stock will be bought and added to our Model Portfolio.

The earnings outlook for this stock may improve substantially and as more money flows into this equity it may reach higher 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 or June 2002. To find out more about this stock, read Stocks for traders

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 by the end of March or beginning of April, 2002.

RFMD may fall to $12 per share 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.

Five hundred ADR’s of Ericsson LM Telephone (NASDAQ symbol: ERICY) will be bought as soon as this equity tests its support level of $3.79, perhaps by the end of March, 2002. These 500 ADR’s will be sold as soon as this equity reaches approximately $20, perhaps in the second half of 2003.

Model Portfolio Chart
3-15-2002

Stock Symbol	Purchase date	Purchase Price	Shares Bought	Recent Price	Change %	Market Value
AMAT	March 1996	$38.12	c 160	$50.72	432%	$8,115
CMGI	January 2001	$6.78	300	$1.55	- 77%	$465
CSCO	October 1999	$73.88	j 100	$16.54	- 55%	$1,654
CSCO	March 2001	$19.88	100	$16.54	-17%	$1,654
CPQ	April 1999	$23.88	100	$10.33	- 57%	$1,033
CPWR	January 2000	$21.06	150	$12.20	- 42%	$1,830
CPWR	April 2000	$12.36	200	$12.20	-1%	$2,440
GLW	February 2002	$6.62	100	$7.82	18%	$782
DELL	April 1999	$38.63	100	$25.72	- 33%	$2,572
ERICY	September 1997	$42.12	e 800	$4.39	-17%	$3,512
INTC	March 1995	$78.25	a 280	$31.74	549%	$8,887
ICGE	October 2000	$11.63	200	$0.85	- 93%	$170
JDSU	February 2002	$6.33	200	$6.10	-4%	$1,220
LSI	February 2001	$19.25	100	$16.98	- 12%	$1,698
LU	June 2000	$57.88	50	$4.89	- 92%	$245
LU	October 2000	$20.75	200	$4.89	-76%	$978
MSFT	January 1999	$169.12	h 80	$62.49	- 26%	$4,999
MOT	March 2001	$15	100	$14.00	- 7%	$1,400
NOK	April 1997	$58.88	d 280	$22.11	320%	$6,191
NT	March 2001	$17.56	100	$5.06	- 71%	$506
NT	July 2001	$7.58	200	$5.06	- 33%	$1,012
ORCL	May 2001	$15.26	300	$12.60	- 17%	$3,780
PFE	August 1997	$52.06	i 150	$41.37	138%	$6,206
RAD	February 2002	$2.57	400	$3.47	35%	$1,388
SUNW	March 2001	$18.82	100	$9.06	- 52%	$906
SUNW	February 2002	$8.61	300	$9.06	5%	$2,718
VERT	February 2001	$3.72	200	$0.80	- 78%	$160
WCOM	January 2001	$22.50	100	$7.40	- 66%	$740
YHOO	February 2001	$27.32	100	$18.72	- 31%	$1,872

Cash $11,539
Total $80,672

a) The quantity of shares was adjusted for a 100 percent stock dividend issued by Intel Corporation on June 22, 1995, a 2-for-1 stock split issued on July 14, 1997, a 2-for-1 stock split issued on April 11, 1999 and a 2-for-1 stock split issued on July 30, 2000. (There were 480 shares of INTC on October 29, 2000. On October 30, 2000, two hundred shares were sold and now there are 280 shares.)

c) The quantity of shares was adjusted for a 100 percent stock dividend issued by Applied Materials, Inc. on October 14, 1997 and a 2-for-1 stock split issued on March 16, 2000.

d) The quantity of ADR’s was adjusted for a 2-for-1 split issued by Nokia Corporation on April 16, 1998, a 2-for-1 split issued on April 11, 1999, and a 4-for-1 split issued on April 10, 2000.

e) The quantity of ADR’s was adjusted for a 2-for-1 split issued by Ericsson Telephone on May 22, 1998, and a 4-for-1 split issued on May 8, 2000.

h) The quantity of shares was adjusted for a 2-for-1 stock split issued by Microsoft Corporation on March 26, 1999.

i) The quantity of shares was adjusted for a 3-for-1 stock split issued by Pfizer on June 30, 1999.

j) The quantity of shares was adjusted for a 2-for-1 stock split issued by Cisco Systems, Inc. on March 23, 2000.

After the trades done throughout the year 2001, our Model Portfolio is heavily weighed in tech stocks. The risk of such asset allocation is much greater than owning a portfolio of stocks in several sectors. Furthermore, more stocks will be held short-term. Although it is not likely that a typical investor will acquire all of the stocks that are in our Model Portfolio, each investor has to be aware beforehand that short-term trading is risky, and will greatly increase tax liability.

Between April 1994 and July 1998, a total of $28,336 of cash was invested in the Model Portfolio. Due to the excellent performance of the technology stocks, over the course of six years the total value of the portfolio has risen to $145,374 as of June 30, 2000. Our Model Portfolio has generated a gain of $117,038, or 413 percent in just six years (as of June 30, 2000).

Investors who are just starting out should not be deterred by the size of our Model Portfolio. Notice that a total of $28,336 was invested over the course of four years, averaging an investment of $7,000 per year. Investors who are just starting out could invest as little as $2,000 each year, but be consistent and invest that amount every year. After several years, an investor could have a portfolio consisting of several blue-chip stocks.

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