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 24, 2004, Research in Motion, Inc., (NASDAQ symbol: RIMM), closed at $86.02 per share. Read on to see how we rate this stock. We are also featuring the stock of Micron Technology, Inc., (NYSE symbol: MU) that closed at $15.81 per share on March 24, 2004. 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 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

The market started the year with a strong rally but was not able to maintain it. By March 12, 2004, all of the gains achieved in 2004 were wiped out and all three major indexes fell into negative territory for this year.

On March 15, 2004, Jose Luis Rodriguez Zapatero, Spain’s incoming prime minister promised to bring Spanish troops back from Iraq unless the United Nations take control there. Furthermore, Zapatero stated that unless there is a change in Iraq, Spain’s 1,300 troops will stay in Iraq until June 30, 2004.

The market has been affected negatively by the recent terrorist attacks and by the leadership change in Spain. On Monday, March 15, 2004, the Dow Jones Industrial average closed at 10102.89, down 137.19 points, while the Nasdaq Composite index fell 45.53 points and closed at 1939.20. At current levels, the market is still overbought and the price to earnings ratio is too high. The major indexes could continue their downtrend until mid 2004, or the end of September 2004.

The Federal Reserve board members met on Tuesday, March 16, 2004, and left interest rates unchanged at 1 percent, a 45-year low. At its meeting, the Fed noted that “with inflation quite low and resource use slack” they “can be patient” in deciding to raise interest rates. On the day when the Fed made the announcement, the Dow Jones Industrial average closed at 10184.67, up 81.78 points. The Nasdaq Composite index closed at 1943.09, up 3.89 points.

As far back as in January 2002, we stated in Investing, “Warning! Speculators who have marginal accounts should minimize the margin level as soon as possible. Sell some of the stocks in your account during the market rallies in January 2002. Bring your margin level to zero, if possible. Speculators who do not bring their margin level to zero should be prepared to have enough cash on hand to add to their marginal account.”

We believe that the market is still in a secular long-term bear market and the extensive gains achieved during 2003 were due to a short-term bear market rally. 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. The market is overdue for a major correction and when that happens the Dow could fall as much as 20 percent, while the Nasdaq composite index could fall 30 percent. In a worst case scenario, some of the technology stocks could fall as much as 70 percent. If that were to happen these marginal accounts could generate margin calls and many speculators may not be financially ready to meet them.

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, March 24, 2004, after the market closed, the asset allocation in our Model Portfolio was 15 percent equities and 85 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.

On April 3, 2000, this stock closed at a high of $57.44 per share, after a 2 for 1 split that was issued on March 16, 2000. Afterwards, as the money flow started to fall, this equity proceeded to descend.

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 of 2001, we stated that AMAT could fall to $39.00 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. After the stock split there were 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.

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. On July 21, 2003, AMAT closed at $17.87 per share.

To our surprise, the money flow rose $4.2 billion during the following four weeks and AMAT proceeded to test its resistance level. This equity closed at a high of $20.73 per share on August 21, 2003, and we stated: “At such a level this equity is overvalued and short-term may have no other way to go but down.” On September 22, 2003, AMAT closed at $19.67 per share.

Afterwards, as the money flow rose $5 billion, the stock reversed its short-term downtrend and proceeded to ascend. On October 20, 2003, this equity closed at $21.60 per share. During the next three weeks, as the money flow rose $5.4 billion, this stock proceeded to ascend. On November 6, 2003, AMAT closed at a high level of $25.61 per share. At that price level this equity was trading at 206 times earnings, which is almost unimaginable (does anyone remember the stock market bubble?). On November 6, 2003, this stock closed at $25.61 per share and was fully valued.

On January 16, 2004, AMAT closed at $24.41 per share and we stated: “While there is a very slight probability, depending on the positive money flow and other factors, that this equity could ascend and reach approximately $27.31 per share by February 17, 2004, afterwards this stock could fall.”

The money flow fell $3.7 billion during the next four weeks and the stock proceeded to pull back. On February 17, 2004, AMAT closed at $21.94 per share. In February 2004, we stated: “Although there is a very slight probability that this stock could still ascend and reach a high of approximately $27.31 per share during the next three weeks, the downside risk outweighs the upside potential.”

On March 24, 2004, AMAT closed at $20.77 per share. If the money flow were to fall $15.8 billion during the next three months, this equity could fall to a low level. This equity could fall at a slower pace than we originally believed and although it may not reach our initial projected low of $6.27 per share, it could close at a low of $10.35 per share by July 2004.

Long-term, this stock could reach $48.25 per share, perhaps by 2008. There are 160 shares of AMAT left in our Model Portfolioand these will be held long-term.

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.

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

The shares of CMGI, Inc., closed at a low of $0.29 per share on August 19, 2002. Afterwards, as the money flow rose $534 million during the following 11 months, this equity proceeded to ascend. On November 14, 2003, this stock closed at a high of $2.12 per share. As the money flow fell, this equity edged to a lower level and closed at $1.78 per share on December 31, 2003.

Afterwards, as the money flow rose $346 million during the next three weeks, this stock established a very strong uptrend. On January 22, 2004, this equity closed at a high of $3.10 per share. Afterwards, as the money flow started to fall, this stock reversed its course and proceeded to descend.

On December 19, 2003, we revised our rating for CMGI from a speculative long-term buy to a speculative long-term accumulate. On February 17, 2004, CMGI closed at $2.65 per share and we stated: “Speculators may establish half of their position at this price level, and if this stock were to fall below $1.02 per share, then buy the remaining half.”

This equity proceeded to descend and closed at a low of $2.09 per share on March 24, 2004. We would like to remind investors that the risk of owning this stock is high; therefore it should only be bought by speculators and should not account for more than three percent of one’s portfolio.

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, 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.

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 July 21, 2003, this stock closed at $17.93 per share. We have been projecting that this equity may test its $8.60 support level by mid September 2003. It hasn’t happened because the money flow started rising at a fast pace and since June 2003, it rose $10.3 billion by November 12, 2003. Although we may have been wrong about the time frame when this equity could reach its low level, only time will tell if we were correct about the price that this stock could drop to.

This equity had risen at a slow pace and it could also fall at a slow pace. In November 2003, we stated: “On November 20, 2003, this equity closed at $21.94 per share and is fully valued.” To our surprise, the money flow rose $6.9 billion during the following three weeks and CSCO continued its uptrend. On December 8, 2003, this stock closed at a high of $24.29 per share.

On January 16, 2004, this equity closed at $29.13 per share and we stated: “Speculators who own it may want to sell it.” During the next 7 weeks money flow fell $22.4 billion and this stock fell at a fast pace. On March 9, 2004, CSCO closed at a low of $22.12 per share. As the money flow edged slightly higher, this stock closed at $22.67 per share on March 24, 2004.

In our opinion the stocks in the technology sector are overvalued and if the money flow were to fall $97 billion, CSCO could slowly descend and fall below $15.25 per share. At such a level we would rate this stock a strong buy. Investors who already own this stock could add to their position.

In our opinion, Cisco Systems, Inc., could resume its acquisition spree and its annual revenues may reach approximately $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.

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. There are still 100 shares of CSCO left in our Model Portfolioand these will be held long-term.

Compuware Corporation (NASDAQ symbol: CPWR) makes software that manages corporate networks and improves productivity. The stock of Compuware Corporation reached a high of $40.00 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.

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. Afterwards, as the money flow rose $1.1 billion during the following 16 months, this equity proceeded to ascend and closed at a high of $8.39 per share on January 26, 2004. Afterwards, as the money flow fell $294 million during the next two months, this stock edged lower and closed at $7.18 per share on March 24, 2004.

Investors should wait patiently and buy this stock on a pullback, preferably below $3.41 per share.

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 has 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. On August 21, 2003, these warrants closed at $0.10 per warrant and we stated: “could continue to descend; therefore we lowered our buy target level to $0.05 per warrant.”

On January 16, 2004, these warrants closed at $0.25 per warrant. As the money flow edged lower these warrants closed at $0.20 on February 17, 2004, down $0.05 for the day.

In February 2004, Elan Corporation plc., announced that it plans to submit to the FDA an application for approval of Antegren ® for treatment of multiple sclerosis. Since then, the shares of Elan Corporation plc., rocketed ten points and closed at $19.29 per share on March 24, 2004.

As the shares of Elan Corporation rocketed to higher levels, so did its warrants. In just 20 days, these warrants went from a low of $0.20 per warrant as of February 17, 2004, to a $2.15 per warrant reached at a close on March 8, 2004.

Afterwards, although the stock maintained its high level, these warrants proceeded to fall at a fast pace. On March 24, 2004, these warrants closed at $0.99 per warrant, down 54 percent from their high level reached on March 8, 2004. Furthermore, the daily trading volume of ELANZ fell to 205,000 on March 24, 2004. On the most active days, as many as 1,600,000 warrants were traded in one day.

These warrants have run away from us. We stubbornly maintained our buy target level of $0.05 per warrant. As the company announced its plans to submit an application for an approval of its new prescription drug, these warrants rocketed to a high level before we posted our next issue of Moderate Trader.

Elan Corporation, plc., will announce earnings on April 5, 2004. If the company were to announce earnings that are better than expect, the stock of Elan (ELN) could maintain its uptrend. On the other hand, if the earnings do not meet the expectations, there is a probability that the stock of Elan (ELN) could pull back and test its support levels. As long as ELN does not fall below $15.96 per ADR and then starts rebounding by April 16, 2004, we will revisit these warrants.

If the ADR’s of Elan (ELN) are in an uptrend and trading above $18.40 per ADR, the daily trading volume of warrants (ELANZ) exceeds 600,000 for two consecutive days, and the warrants do not fall below $0.64 per warrant, then an additional $500.00 (five hundred dollars) worth of warrants will be bought and added to our Model Portfolio. Afterwards, if these warrants were to once again reach a high level of approximately $1.65 per, all of these warrants would be sold immediately.

The risk of owning these warrants is high; therefore only speculators should buy them when they reach our buy target level, perhaps by mid April 2004.

Internet Capital Group (NASDAQ symbol: ICGE) is a venture capital group that owns a stake in approximately 30 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 establish 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 2, 2003, ICGE closed at a high of $0.82 per share and then proceeded to descend. As the money flow fell $37 million during the following 25 days, this equity descended and closed at a low of $0.46 per share on June 27, 2003. On January 12, 2004, this stock closed at $0.61 per share. Afterwards, as the money flow fell $119 million during the next 9 weeks, this stock proceeded to fall and closed at $0.35 per share on March 24, 2004.

There is a high probability that this stock could fall below $0.15 per share during 2004, therefore on January 16, 2004, we revised our rating from speculative long-term buy to a hold. We would like to remind investors that the risk of owning this stock is high; therefore it should not account for more than three percent of one’s portfolio.

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 $2.3 billion during the following 8 months, this stock proceeded to ascend and closed at a high of $4.28 per share on June 5, 2003.

As the money flow rose, this equity proceeded to ascend and closed at $4.28 per share on June 5, 2003. On August 21, 2003, JDSU closed at $3.50 per share and we stated: “If the money flow were to fall $420 million during the following 7 weeks, this stock could test its support level of $1.62 per share by mid October 2003 and speculators may want to buy it.”

The money flow rose by $1 billion during the next three weeks and the stock proceeded to ascend. On September 9, 2003, JDSU closed at $4.20 per share. The stock was not able to break through its resistance level of $4.28, reversed its course, and proceeded in a downtrend.

On December 19, 2003, this equity closed at $3.35 per share. As the money flow rose, JDSU proceeded to ascend and closed at $5.73 per share on January 20, 2004. Afterwards, as the money flow dropped, this stock fell and closed at $3.97 per share on March 24, 2004. This stock could fall at a slow pace. If the money flow were to fall $2.1 billion during the next three months, this stock could fall to $1.62 per share, perhaps by July 2004.

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 of JDSU will be sold as soon as this stock reaches approximately $12.26 per share, perhaps in the second half of 2006.

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 worthless. Although these shares will be cancelled when the company emerges from bankruptcy, we will keep the present stock symbol in our Model Portfolio as a reminder of what could happen to the stock of any company.

On September 22, 2003, we added several stocks to our list. Although there may not be enough cash in our Model Portfolio to buy all of these stocks, we do not anticipate that all of the equities that are on our buy list will reach our buy target levels. Our list is not in alphabetical order; the stocks are listed with the most desirable to own listed first and the less desirable listed last.

On March 24, 2004, the Dow and the Nasdaq were down for this year. The market is overdue for a major correction and when that happens the Dow could fall 15 percent, while the Nasdaq Composite index could fall 30 percent. In a worst case scenario, some of the technology stocks could fall as much as 70 percent. While some of the tech stocks could drop sharply in a very short time, other stocks could fall at a slow pace; therefore we will wait patiently until the stocks on our list reach our buy target levels.

Nasdaq-100 Trust (AMEX symbol: QQQ) is a unit investment trust that invests in the largest companies traded on NASDAQ. The trust issues tracking stocks on the Nasdaq-100 Index called QQQ’s, or Q’s. At the height of the Internet frenzy, QQQ’s closed at a high level of $117.55 in April 2000, their price doubling in less than a year.

Then, as the money flow proceeded to fall, QQQ’s, or cubes, as the tracking stock is commonly called, closed at a low level of $28.19 on September 21, 2001. Afterwards, as money flow rose $20 billion, cubes proceeded to test their resistance level and closed at $42.85 on December 5, 2001.

As the money flow fell, QQQ’s closed at $33.52 on April 12, 2002. At that time we stated: “There is a probability that cubes, may test their support level of $28.19 by the end of May 2002.” Afterwards, money flow fell $18 billion during the next four weeks and QQQ’s closed at $28.70 on May 7, 2002.

Immediately afterwards, money flow rose $14.4 billion during the next ten days and QQQ’s closed at a high of $32.86 on May 16, 2002, then again resumed their downtrend. As the money flow fell, QQQ’s proceeded to descend and closed at a low of $20.35 on September 30, 2002.

In May 2003, we stated: “The risk of owning shares in this unit investment trust is much smaller than that of owning only a few stocks. Nevertheless, speculators who plan to trade cubes, short-term will have to be aware that this unit investment trust could fall below its recent support level.”

To our surprise, money flow continued to rise and QQQ’s maintained their uptrend. Cubes closed at a high level of $38.59 on January 26, 2004. If the money flow were to fall $97 billion during the next 7 months, cubes could fall to a low of $20.75, perhaps by October 2004. At such a level we would rate these a short-term buy and 250 QQQ’s would be bought and added to our Model Portfolio.

International Business Machines Corporation (NYSE symbol: IBM) is the world’s largest manufacturer of computer hardware. The stock of Big Blue closed at a high of $133.62 per share on September 1, 2000 and then proceeded to fall.

In October 2002, the stock of IBM Corporation found strong support and then proceeded in an uptrend. On February 4, 2004, this equity closed at a high of $100.19 per share and then reversed its course and proceeded to fall.

We are maintaining our buy target level of $55.07 and believe International Business Machines Corporation could reach it by mid September 2004.

On August 21, 2003, we decided to add International Business Machines Corporation to our buy list. If this stock were to fall to our projected buy target level of $55.07 per share, then 100 shares would be bought and added to our Model Portfolio.

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. If the money flow were to fall $57 billion during the next six months, this equity could descend to a low level of $16.75 per share, perhaps by mid September 2004. At such a level 400 shares of Intel Corporation would be bought and added to 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.

There is a slight probability that AMD could reach our buy target level of $2.50 per share by mid September 2004. If this equity were to reach such a low level, 1,000 shares would be bought immediately and added to our Model Portfolio.

Rite Aid Corporation (NYSE symbol: RAD) is the third largest drug store chain in the United States. The company operates approximately 3,400 drug stores in 29 states.

In July 2003, we stated: “If the money flow were to rise sharply during the next four weeks, this equity could ascend to approximately $6.35 per share by the end of August 2003 and all of the shares held in our Model Portfolio would be sold.” The money flow did not rise sharply and RAD appeared to reverse its uptrend, that’s why 400 shares of RAD that were held in our Model Portfolio were sold at $4.41 per share. If this stock were to fall to approximately $2.45 per share, perhaps by July 2004, then 700 shares of RAD would be bought and once again added to our Model Portfolio.

Applied Materials, Inc., (NASDAQ symbol: AMAT) is a major supplier of wafer processing equipment that is used to produce semiconductors. If the money flow were to fall $17.6 billion during the next four months, this equity could fall to a low level. This equity could fall at a slower pace than we originally believed and although it may not reach our initial projected low of $6.27 per share, it could close at a low of $10.35 per share.

If the stock of Applied Materials, Inc., were to fall to approximately $11.85 per share, then 400 shares would 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.

Our initial buy target level for these warrants was $0.15 per warrant. On August 21, 2003, we lowered our buy target level to $0.05 per warrant. On January 16, 2004, these warrants closed at $0.25 per warrant. As the money flow edged lower these warrants closed at $0.20 on February 17, 2004, down $0.05 for the day.

In February 2004, Elan Corporation plc., announced that it plans to submit to the FDA an application for approval of Antegren ® for treatment of multiple sclerosis. Since then, the shares of Elan Corporation plc., rocketed ten points and closed at $19.29 per share on March 24, 2004.

As the shares of Elan Corporation rocketed to higher levels, so did its warrants. In just 20 days, these warrants went from a low of $0.20 per warrant as of February 17, 2004, to a $2.15 per warrant reached at a close on March 8, 2004.

Afterwards, although the stock maintained its high level, these warrants proceeded to fall at a fast pace. On March 24, 2004, these warrants closed at $0.99 per warrant, down 54 percent from their high level reached on March 8, 2004. Furthermore, the daily trading volume of ELANZ fell to 205,000 on March 24, 2004. On the most active days, as many as 1,600,000 warrants were traded in one day.

These warrants have run away from us. We stubbornly maintained our buy target level of $0.05 per warrant. As the company announced its plans to submit an application for an approval of its new prescription drug, these warrants rocketed to a high level before we posted our next issue of Moderate Trader.

Elan Corporation, plc., will announce earnings on April 5, 2004. If the company were to announce earnings that are better than expect, the stock of Elan (ELN) could maintain its uptrend. On the other hand, if the earnings do not meet the expectations, there is a probability that the stock of Elan (ELN) could pull back and test its support levels. As long as ELN does not fall below $15.96 per ADR and then starts rebounding by April 16, 2004, we will revisit these warrants.

If the ADR’s of Elan (ELN) are in an uptrend and trading above $18.40 per ADR, the daily trading volume of warrants (ELANZ) exceeds 600,000 for two consecutive days, and the warrants do not fall below $0.64 per warrant, then an additional $500.00 (five hundred dollars) worth of warrants will be bought and added to our Model Portfolio. Afterwards, if these warrants were to once again reach a high level of approximately $1.65 per, all of these warrants would be sold immediately.

The risk of owning these warrants is high; therefore only speculators should buy them when they reach our buy target level, perhaps by mid April 2004.

Cisco Systems, Inc., (NASDAQ symbol: CSCO) makes data networking equipment, data switches, and networking gear. Cisco Systems continues to expand its market share. On January 16, 2004, this stock closed at a high of $29.13 per share. If the money flow were to fall $22.4 billion during the next 7 months, this stock could descend to a low of $10.60 per share by mid September 2004, and 300 shares would be bought and added to our Model Portfolio.

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. If the stock of LSI Logic Corporation were to fall below $2.95 per share, perhaps by mid September 2004, then 1,000 shares would be bought and added to our Model Portfolio.

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 $45 billion in cash and short-term investments. On March 24, 2004, we lowered our buy target level for this stock from $21.25 per share, to $18.75 per share. If this stock were to fall below $18.75 per share, perhaps by mid September 2004, then 200 shares of MSFT 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. If the money flow were to fall $76 billion during the next 7 months, this stock could descend to a low level below $4.75 per share, perhaps by October 2004. At such a level 800 shares of Oracle Corporation will be bought and added to our Model Portfolio.

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.

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.

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 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. 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 third largest drug store chain in the United States. The company operates approximately 3,600 drug stores in 29 states.

This stock appeared to have reversed its uptrend and that’s why a decision was made to sell all of the shares of Ride Aid Corporation held in the Model Portfolio II.

On August 20, 2003, all 100 shares of RAD were sold at $4.41 per share. This trade generated $421.50 in cash, after commission, and it was added to the existing cash in our Model PortfolioII.

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 appeared 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.

A $2,000.00 contribution for the current year was made in December 2003. As of March 24, 2004, there was $3,490.23 cash in Model Portfolio II. Cash continues to generate interest of only 0.005 percent.