On September 11, 2001, two of the planes that were hijacked by terrorists and then purposely crashed into twin towers of World Trade Center, where major brokerage houses have their offices. All of the U.S. stock exchanges (continued in: Investing).

Aeroflex Inc. (NYSE symbol: ARX) designs and manufactures thin-film interconnects for switching systems, isolator products and satellite payload testing systems. The company sells its products to commercial industry and defense (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 much greater risk, and preferably no more than 10% of the portfolio may be invested in these stocks. Many of the stocks in the technology sector should be bought at recent low levels. Speculators could achieve short-term gains up to 100%, or higher, on some of these stocks.
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, wireless, or the Web. (continued in: Stocks for traders).

Advanced Micro Devices, Inc. (NYSE symbol: AMD) manufactures microprocessors, flash memory devices, data communications products and network products. AMD and Intel continue their fierce competition. While the demand for microprocessors continued to grow worldwide in the year 2000, Intel Corporation was not able to produce ( continued in Model Portfolio).

Investing

On September 11, 2001, two of the planes that were hijacked by terrorists and then purposely crashed into twin towers of World Trade Center, where major brokerage houses have their offices. All of the U.S. stock exchanges were shut down almost immediately, and finally reopened on Monday, September 17, 2001.

Although the Federal Reserve cut interest rates by 50 basis points, or half a percent, to 3 percent, on Monday September 17, 2001, this eight rate cut wasn’t enough to quell the fear of investors. All of the indexes fell, with Dow Jones Industrials closing at 8920.70, down 684.82 points, or 7.1 percent, and Nasdaq Composite index closing at 1579.28, down 116.02 points, or 6.8 percent, the lowest level in three years. On the NYSE the volume was heavy at 2.33 billion shares.

Among the biggest losers were airlines, entertainment stocks such as Disney (symbol DIS), and insurance companies. The stock of Marriott International closed at $32.25 per share, down $8.60, while AMR, the parent of American Airlines ended the day down $11.70, or 39 percent, closing at $18 per share. Week ending September 21, 2001, the Dow fell 1370 points, its biggest weekly loss in sixty years.

By mid September, several companies announced that they would buy back their stock. Among these companies was Intel Corporation that plans to buy 300 million shares, and Cisco Systems that announced a repurchase program of $3 billion over the course of the next two years.

When the jobless rate fell to 4.3 percent in January 1999, it was at the lowest level in twenty-eight years. Although the jobless rate rose to 4.9 percent in August 2001 from 4.5 percent in July, it was still at historically low level.

While the U.S. dollar fell, gold rose $18 an ounce as some of the investors rushed to commit some of their money in safer investment vehicles. Crude oil fell $7.72, or 26 percent since September 13, 2001, further strengthening this non-inflationary economic environment. Inflation is nowhere in sight, therefore policy makers in Washington will be able to proceed with a monetary and fiscal stimulus of approximately $76 billion to jump start our economy.

On Thursday, October 4, 2001, stocks rallied after the Federal Reserve cut interest rates by 50 basis points, or half a percent, to 2.5 percent. It was the ninth cut this year and the interest rate is the lowest in forty years.

Although September 11, 2001, tragic event may prolong this bear market a few more months, the market may slowly start to rebound by January 2002. If the consumer spending were to return to pre September 11 level, we may be able to avoid a recession.

Investors who were invested in the blue chip, large cap stocks, should continue holding these long-term. These investors who have cash on the sidelines should gradually start accumulating equities, especially in the tech sector.

Some of the tech stocks may never again reach such low levels, on the contrary, two years from now some of these stocks may revisit their previous highs and reward investors with gains as high as 400 percent. Short-term, the market may remain very volatile and speculators may achieve best results by trading in and out of stocks such as the ones mentioned in section: Buy & Sell, and Stocks for traders. Investors should remember that short-term trading is risky and will greatly increase the tax liability.

Buy & Sell

Aeroflex Inc. (NYSE symbol: ARX) designs and manufactures thin-film interconnects for switching systems, isolator products and satellite payload testing systems. The company sells its products to commercial industry and defense contractors.

In 1998, sales to Lucent Technologies comprised 15.5 percent, while sales to Lockheed Martin comprised 13.3 percent of annual sales. In 1998, the company acquired two of Lucent’s telecommunications components operations and became Lucent’s sole supplier of thin-film interconnects for switching systems.

The annual revenues have almost quadrupled in seven years. Aeroflex is a leading manufacturer of microelectronic components. As the demand for the Internet access over the fiber optic lines, and the wireless communications grows at extremely fast pace, the demand for microelectronic components made by Aeroflex will continue to grow. In our opinion, as the company shifts the majority of its product mix to commercial applications, the revenues and earnings will continue to grow.

The long-term outlook for the company is favorable. On October 5, 2001, this timely stock closed at $10.96 per share, up from a low of $7 reached on August 23, 2001. This stock may test its support level of $7 per share by the end of December 2001. When this stock reaches its recent support level, speculators should wait a few days and if it doesn’t break through $7 per share, it may be bought for a short-term trade.

Patient investors may hold the stock of ARX one-year and sell it when it reaches approximately $21 per share. On the other hand, if the money flow into this stock were to improve, this timely stock could reach approximately $14 per share by the end of January 2002 and speculators 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 have 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.

This year, once again this stock is trading at a wide range. On October 1, 2001, this stock closed at a low level of $17.67 per share, down from its 52-week high of $53.88 per share. This stock may test its recent support level of $17.67 in December 2001.

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

There is a strong probability that we may have a V-shaped recovery and the market may start to improve by the end of the first quarter of 2002. If this were to happen, the stock of People Soft may reach approximately $35 per share by the end of April 2002, and when it does, speculators should sell it immediately to lock in their gains.

RF Micro-Devices, Inc., (NASDAQ symbol: RFMD) designs, develops, manufactures and markets semiconductors and components for wireless handset market, wireless Local Area Networks (LAN), pagers, 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 offer better performance, and are the most expensive. The company’s largest customer is Nokia Corporation that accounted for 59% of annual sales in fiscal 2000. During fiscal 2000, sales in United States accounted for 44% of annual revenues, while sales in Asia generated 24% of revenues, and sales in Europe 32%.

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, and once the second phase of construction is completed by the end of calendar 2001, 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. estimates that the cost to build and equip this facility will be approximately $140 million for the first phase and $180 million for the second phase. The company will fund this project by a synthetic lease arrangement that is an asset-based form of financing.

The company has an agreement with Qualcomm, Inc., to cooperate on the development of the module CDMA power amplifiers to be used in Qualcomm CDMA chipsets. Furthermore, the company is expanding its component line for Motorola’s phone platform and plans to begin volume shipments in the second half of fiscal 2001.

Although Nokia Corporation remains the biggest customer and continues to increase orders; the sales to this company have decreased as a percentage of total revenue, because RF Micro-Devices, Inc., continues to expand its customer base. In the year 2000, Sagem, a major manufacturer of handsets in France placed a long-term order for components.

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, where it has risen 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 2005.

This sector is very volatile; therefore, investors who buy this stock should prepare themselves for a bumpy ride. Furthermore, once the second phase of wafer fabrication facility is completed near the end of calendar 2001, the company could incur increased costs toward the end of fiscal 2001 due to the initial low capacity utilization. In our opinion, at that time the company could start to write-off the depreciation on the wafer manufacturing equipment. These costs could weigh heavily on the bottom line and bring substantial downward pressure on the price of the stock.

The company issued a 2-for-1 stock split on August 28, 2000. This stock fell to a low level of $9.06 per share on April 4, 2001, and then proceeded to build a very strong upward trend. On May 21, 2001, this timely stock closed at $36.60 per share and afterwards proceeded in a downtrend.

On October 5, 2001, this stock closed at $16.56 per share. If this stock were to break through its recent support level of $14.30 per share, it may test its next support level of $9.06 per share, established on April 4, 2001. At such level, this stock would be a strong buy.

As the sales of the wireless handsets improve, RFMD may reach $29 per share by the end of the first half of 2002 and at such level should be sold immediately. On the other hand, patient investors could hold this stock long-term, at least five years.

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 much greater risk, and preferably no more than 10% of the portfolio may be invested in these stocks. Many of the stocks in the technology sector should be bought at recent low levels. Speculators could achieve short-term gains up to 100%, or higher, on some of these stocks.

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, wireless, or the Web. The company operates in 12 countries. Citrix Systems, Inc., offers its products through a reseller channel of approximately 7,600 certified solutions network members and distributors worldwide. The company has over 100,000 customers and 24 million end 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 the downward trend. On March 14, 2001, this stock fell to $17.31 per share. As the market proceeded to rally, this stock reversed its downward trend. On May 31, 2001, this stock closed at $23.90 per share.

As the money flowing into this equity rose, on August 2, 2001, this stock closed at a high level of $36.69 per share. Then, this stock proceeded to fall and by September 26, 2001, this equity closed at a low level of $18.38 per share, down 3.42 for the day.

At that level the stock was oversold and as more investors started buying it, this equity closed at $23.21 per share on October 5, 2001. This stock may test its support level of $18.38 in the beginning of December and if it doesn't break through this level, speculators may buy it for a short-term trade.

This timely stock may revisit its August 2001 high of $36.70 by the end of January 2002 and speculators should sell it immediately to lock in short-term gain.

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. On November 30, 2000, this stock closed at $69.88 per share, then reversed its downtrend and rose to $101.50 per share on December 11, 2000.

The stock found strong resistance at this level and 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 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's 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 October 5, 2001, this stock closed at $18.22 per share. This timely stock may test its support level of $12.99 by the end of November 2001 or beginning of December 2001 and speculators may buy it at such low level.

By the end of January 2002, this stock may reach approximately $32.50 per share, as long as money flow continues to improve. At such level, speculators should sell this stock immediately to lock in their short-term gain of approximately 200 percent.

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 has over 17,000 employees worldwide.

EMC Corporation acquired Data General in October 1999, and that added a selection of mid-priced storage devices. During 1999, EMC Corporation shipped over 10,000 software licenses that generated $822 million in revenue. Although EMC Corporation's hardware and software is the most expensive, 98% of customers are willing to recommend it to their colleagues and business associates.

As 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 10 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. In March we stated that the stock of EMC Corporation could fall to $30 per share during the next two months. By March 12, 2001, this stock had already reached such low level.

Due to the tremendous selling pressure, this stock continued to fall and closed at $11.16 per share on September 21, 2001. On October 5, 2001, this stock closed at $13.15 per share.

Although this stock may not appreciate at previous fast pace during the next decade, it could provide investors with a gain of approximately 1,600 percent. At such rate of return, $2,000 invested in this stock now, could reach approximately $32,000 after ten years. Patient investors may buy this stock now and hold it ten years. On the other hand, speculators who like to see short-term results may trade this stock.

EMC has the largest market share for storage equipment. As the sales rebound, this timely stock may test its resistance level of $31.62 by the end of April 2002 and speculators should sell it immediately.

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 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.

On October 5, 2001, this stock closed at $8.60 per share. We are maintaining our target level of $60 for this equity, but due to the pricing pressure on chips it may take this stock much longer to reach this level, perhaps in the second half of 2002. We maintain our rating of strong short-term buy. Buy this stock and sell as soon as it reaches our target level of $60 per share.

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

The company may continue to invest 15-17% of 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. 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 October 5, 2001, this stock closed at $12.87 per share. At this price level we rate this stock a strong buy. We are holding 100 shares of LSI in our Model Portfolio. Due to the negative pressure on the stocks in this sector, we have revised our target level for this stock to $42 per share, from $60 per share.

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

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. Computer Associates International has offices in 44 countries.

During fiscal year 2000, the company generated $1.566 billion of cash from operations and in our opinion it is sufficient to cover the repayment of debt. In our opinion, the short-term and the long-term outlook for the company is very good. As the debt level falls, earnings could improve and the stock may reach $65 per share.

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 bear market, this stock proceeded to descend and closed at a low level of $19.50 on December 29, 2000. Afterwards, this timely stock proceeded to establish a strong upward trend and closed at $37.50 per share on January 30, 2001.

On September 21, 2001, this stock closed at a low level of $22.70 and then reversed its downtrend. This timely stock closed at $28.28 per share on October 5, 2001.

Speculators should monitor this stock daily. This equity may test its support level of $22.70 in mid December 2001. If this stock were to break through its recent support level, next support level is $18.68 and at such level investors should buy this stock immediately.

At such level, this stock may be bought by speculators. By the end of January 2002, this stock may reach approximately $30 per share and should be sold immediately.

Patient investors may hold this stock until it reaches our revised target level of $65 per share, perhaps in the second half of 2002.

Model Portfolio

Advanced Micro Devices, Inc. (NYSE symbol: AMD) manufactures microprocessors, flash memory devices, data communications products and network products. AMD and Intel continue their fierce competition. 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 could continue to spend 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 reached a high of $94.63 per share on June 21, 2000 (after the 2-for-1 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. Although this timely stock could be held long-term, speculators who trade it short-term may achieve better return on investment.

Worldwide, demand for microprocessors continues to grow 17 percent annually. At this time chipmakers do not have sufficient manufacturing capacity to meet this growing demand and that will guarantee that every processor made, will be sold almost immediately. Starting in September, the sales of chips typically rise and the demand reaches the highest level by December.

On January 31, 2001, this stock closed at $24.60 per share. The stock reached an intra-day high of $26.75 on February 15, 2001, and then edged lower to close at $21.50 per share on February 28, 2001.

On October 5, 2001, this stock closed at $8.60 per share. We are maintaining our target level of $60 for this equity, but due to the pricing pressure on chips it may take this stock much longer to reach this level, perhaps in the second half of 2002. As soon as this stock reaches our target level, 150 shares will be sold and the remaining fifty shares will be held long-term.

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; 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 September issue, we stated that AMAT could fall to $39 per share in September and at such 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 $31.55 per share on October 5, 2001. In December 2001, this stock may test its support level and although it may not fall to $27.87 per share, as soon as it falls to approximately $30 per share it would be a strong buy. Hold this stock at least four years.

CMGI, Inc. (NASDAQ symbol: CMGI) 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 out right, 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% 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.

On October 5, 2001, this stock closed at $0.71 per share. 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. 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, provide Internet access, and video conferencing.

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

On September 27, 2001, this stock closed at a low of $11.24 per share, then proceeded to rebound and closed at $14.94 on October 5, 2001. This equity may test its support level in December and while it may not revisit its recent low, at approximately $12.75 per share it would be a strong long-term buy. Investors who already own this stock could add to their position. Hold this stock at least ten years.

Compaq Computer Corp. (NYSE symbol: CPQ) is the third largest computer manufacturer in the world. The Company designs and makes notebook personal computers, servers, consumer PCs and networking equipment. The turnaround is taking longer than expected. Although revenues continue to grow, the earnings are still below the levels reached three years ago. The company sold 83% of interest in Alta Vista Web site to CMGI, Inc. Compaq Computer Corp. retained 17% 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 substantial amount of revenues.

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.

We maintain a hold rating on this stock. As soon as this stock reaches our target level of approximately $29 per share, one hundred shares that are held in the 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 have 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 $12.21 per share on August 31, 2001, and we rated it a buy. On October 5, 2001, this stock closed at $9.12 per share and we rate it a strong long-term buy. Due to the negative short-term outlook for this sector, we 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.

Delia's, Inc. (NASDAQ symbol: DLIA) sells a variety of apparel and accessories for young women. The Company conducts sales through its Web site and through brick and mortar stores. This stock reached a 52-week high of $40 per share in April 1999, and then proceeded to fall along with other Internet stocks. By November 1999, this stock reached a low of $5.50 per share. Afterwards, the stock proceeded to rise, buoyed by optimistic expectations of higher holiday sales and reached an intra-day high of $13.25 in November 1999.

On April 30, 2001, this stock closed at $2.96 per share and we rated it a speculative buy. As more money flowed into this timely stock, it closed at $8 per share on June 29, 2001. Several months ago we have revised our target level for this stock downward to $25 per share. This stock may reach such level in the first half of 2003.

Therefore, a decision was made to sell this stock as soon as it revisits its recent high of $8 per share and add cash to the existing cash in our Model Portfolio. On October 5, 2001, this stock closed at $5.46 per share. Delia's, Inc. merged with iTurf, Inc. and after the conversion of existing stock into the newly issued shares, now there are 342 shares in our Model Portfolio.

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. The stock continued its downtrend and reached a low of $16.25 per share. On February 7, 2001, this stock reached an intra-day high of $27.50 per share. 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. By October 5, 2001, DELL has rebounded to $22.56 per share. This stock may test its support level by the end of December 2001, and at approximately $17 per share would be a strong buy.

Although it is not likely that the stock of Dell Computer Corporation will appreciate at such a fast pace as it did between the year 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 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 October 5, 2001, ERICY closed at a low level of $3.76. Buy these ADR's now and hold at least seven years.

Intel Corporation (NASDAQ symbol: INTC) is the leading manufacturer of microprocessors. The company continues to switch production to 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. Since the original 30 shares were bought, after these stock splits there were 480 shares in the portfolio.

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 October 5, 2001, this stock closed at $21.96 per share. Buy this stock and hold 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 two years.

As soon as this stock reaches approximately $130 per share, one hundred and fifty shares will be sold immediately. The remaining fifty shares will be held long-term. On October 5, 2001, this stock closed at a very low level of $0.51 per share, and we rate it a speculative strong buy.

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

The company may continue to invest 15-17% of 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 October 5, 2001, this stock closed at $12.87 per share. At this price level we rate this stock a strong buy. Due to the negative pressure on the stocks in this sector, we have revised our target level for this stock to $42 per share, from $60 per share.

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

Lucent Technologies, Inc., (NYSE symbol: LU) is the largest manufacturer of the telecommunications equipment. Lucent Technologies makes fiber-optic equipment and optical network equipment that allows the phone companies to increase the capacity and to provide a 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. 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 January 31, 2001, this stock closed at $18.60 per share. Afterwards, this stock proceeded to test its support level and closed at $9.97 on March 30, 2001. On October 5, 2001, this stock closed at $6.49 per share. We rate this stock a speculative long-term buy. 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 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.

This stock closed at $57.72 per share on October 5, 2001 and we rate it a strong buy. Hold this stock 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 5%. 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 2002, and once it does it will be sold. On October 5, 2001, this stock closed at $16.90 per share. Buy this stock now and hold until it reaches our target level.

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% of its revenues from sales in Europe and 44% from sales in other continents.

The long-term outlook for Nokia is excellent, as the demand for 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.

ADRs of Nokia Corporation closed at $16.99 on October 5, 2001, and at this level are a screaming buy. These ADRs may once again test their support level of $15.20 in December 2001, and at such level should be bought immediately. Hold these ADRs long-term, at least seven 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 revenues 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 level. The Internet is not going away. Quiet 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.

After the company announced that it would take a restructuring charge of $19.2 billion the stock proceeded to fall to a new low level. On October 5, 2001, this stock closed at $5.45 per share and we maintain our rating of screaming long-term buy. This stock will be held in our Model Portfolio until it reaches approximately $60 per share and then it will be sold.

Oracle Corporation (NASDAQ symbol: ORCL) is the world's second largest software company. The company makes database management system software. Approximately 90% 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 January 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 October 5, 2001, this stock closed at $14.20 per share. Buy this stock and sell as soon as it reaches approximately $25 per share.

Pfizer, Inc. (NYSE symbol: PFE) is a diversified manufacturer of pharmaceuticals and consumer products. Among its brand name pharmaceutical products is Norvasc for hypertension and Zoloff for depression. The latest addition is Viagra, a pill for erectile dysfunction.

The company issued a 3-for-1 stock split on June 30, 1999. Warner-Lambert agreed to be acquired by Pfizer, Inc. The shareholders will receive 2.75 shares of Pfizer stock for each share of Warner-Lambert stock. The deal is valued at $85 billion. After the merger is completed, Pfizer, Inc., will become a pharmaceutical behemoth with extensive R & D department.

The long-term outlook for the company is excellent. On October 5, 2001, this stock closed at $41.79 per share. Buy this stock on dips and hold 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 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 October 5, 2001, this stock closed at $9.87 per share and we rate it 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 have stated that this stock could fall to approximately $35 per share. Furthermore, we have stated that the risk of owning this B2B start up is high; therefore this stock could only be bought by speculators.

Who would have known then that this stock would break through a $35 level and reach a ridiculously low price of $2.68 per share on February 23, 2001.

In August 2000, we have stated that this stock could ascend to $140 per share, short-term. We maintain our price target level, but it could take this stock approximately two years to reach it.

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 two hundred shares will be held in our Model Portfolio until the stock reaches approximately $140 per share, and then will be sold to lock in long-term capital gain. On October 5, 2001, this stock closed at $0.75 per share and we rate it a speculative screaming buy.

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

On August 4, 1998, the company acquired a 51.79% voting interest and 19.26% economic interest in Embratel, a national telecommunications provider in Brazil. World Com 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 during the next twelve months. 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 short-term gain of approximately 120 percent. On October 5, 2001, this stock closed at $13.33 per share and we maintain our rating of a strong buy.

Yahoo Inc., (NASDAQ symbol: YHOO) is a global Internet media company that provides comprehensive information and shopping services to approximately 200 million users worldwide. The company's Website www.yahoo.com is the most visited site and has the highest name recognition.

Yahoo Inc., continues to provide the widest choice of content that has generated an average of 465 million page views per day in December 1999, an increase of 178 percent from December 1998. 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 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 October 5, 2001, this stock closed at $10.35 per share and we rate it speculative, strong long-term buy.

Model Portfolio Chart
10-5-2001

Stock Symbol	Purchase date	Purchase Price	Shares Bought	Recent Price	Change %	P/E Ratio	Market Value
AMD	October 2000	$20.50	200	$8.60	- 58%	8	$1,720
AMAT	March 1996	$38.12	c 160	$31.55	231%	17	$5,048
CMGI	January 2001	$6.78	300	$0.71	- 89%	___	$213
CSCO	October 1999	$73.88	j 100	$14.94	- 60%	___	$1,494
CSCO	March 2001	$19.88	100	$14.94	-25%	___	$1,494
CPQ	April 1999	$23.88	100	$8.82	- 63%	___	$882
CPWR	January 2000	$21.06	150	$9.12	- 57%	31	$1,368
CPWR	April 2000	$12.36	200	$9.12	-26%	31	$1,824
DLIA	December 1999	$4.20	k 342	$5.46	30%	___	$1,867
DELL	April 1999	$38.63	100	$22.56	- 42%	39	$2,256
ERICY	September 1997	$42.12	e 800	$3.76	- 29%	___	$3,008
INTC	March 1995	$78.25	a 280	$21.96	349%	28	$6,149
ICGE	October 2000	$11.63	200	$0.51	- 96%	___	$102
LSI	February 2001	$19.25	100	$12.87	- 33%	___	$1,287
LU	June 2000	$57.88	50	$6.49	- 89%	___	$325
LU	October 2000	$20.75	200	$6.49	-69%	___	$1,298
MSFT	January 1999	$169.12	h 80	$57.72	- 32%	41	$4,618
MOT	March 2001	$15	100	$16.90	12%	___	$1,690
NOK	April 1997	$58.88	d 280	$16.99	223%	___	$4,757
NOK	July 2001	$19.18	200	$16.99	- 11%	___	$3,398
NT	March 2001	$17.56	100	$5.45	- 69%	___	$545
NT	July 2001	$7.58	200	$5.45	- 28%	___	$1,090
ORCL	May 2001	$15.26	300	$14.20	- 7%	29	$4,260
PFE	August 1997	$52.06	i 150	$41.79	141%	42	$6,269
SUNW	March 2001	$18.82	100	$9.87	- 48%	38	$987
VERT	February 2001	$3.72	200	$0.75	- 80%	___	$150
WCOM	January 2001	$22.50	100	$13.33	- 40%	17	$1,333
YHOO	February 2001	$27.32	100	$10.35	- 62%	___	$1,035

Cash $5,787
Total $66,254

a) The quantity of shares was adjusted for a 100% 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% 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.

k) Two hundred shares of Delia’s, Inc., were bought in December 1999, at $7.19 per share. After Delia’s, Inc., merged with i Turf, Inc., these shares were converted into newly issued stock and now there are 342 shares in our Model Portfolio. The original acquisition cost has been adjusted to $4.20 per share.

After the trades done on March 20, 2001, and the recent trades done on July 25, 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, investor could have a portfolio consisting of several blue-chip stocks.

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