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TABLE OF CONTENT • Overview 1 • Semis 2 • PCs 4 • Software 5 • Tech Hotspots 7 • Key Levels 8 • Portfolio 10 • Feedback 11

Tech Stocks: Bubble, Then Double -- Potential Trouble! By Richard Suttmeier There’s no tech bubble now, but the Nasdaq-bubble burst in March 2000, then a doubling of the index from its October 2002 low to the current high leads my model to project potential trouble. The tech-heavy index began November at 2109, about midway between my monthly pivots at 2121 and 2095, and holding this zone was the technical key that powered it to a 52-week high of 2273 last Friday. The rally was also within the context of my market call, “Nasdaq 2300 or Bust” or “Nasdaq 2300, Then Bust,” and my quarterly risky level remains at 2319 with the May 2001 high looming at 2328. A failure between 2319 to 2328 thus should be considered a significant longer-term warning. Nonetheless, setting the stage for my cautious longer-term view is the March 2000 burst of the Nasdaq bubble at 5132. At that time, most analysts and strategies proclaimed, “Tech is the only place to be.” Those of you familiar with my longer-term market calls know that on March 8, 2000, my call was to liquidate 50% of Nasdaq long positions, as my model indicated risk to a range of 3000 to 3500 by the end of 2000. On the opposite end the of the spectrum, in October 2002 when the Nasdaq was trading as low as 1109, my model projected that it was time to reinvest in tech stocks, just as most analysts said “Tech is dead.” From the October 2002 low to last week’s high, the Nasdaq has more than doubled. Now, many say that a new bull run for technology has only just begun. While I’m not as bearish as I was in March 2000, I can say that there are signs of potential trouble. The first sign is interest rates, as 30-year Treasury bond yields are on the rise. Since summer 2004, the Federal Reserve has raised the fed funds rate by three percentage points, from 1% to 4%, with additional rate increases likely in the months ahead. My model projects that the yield on the 30-year bond will top 5% in the first half of 2006. This is important, as the yield on the 30-year is an input to the fair value calculation of every stock, including tech. The higher the 30-year yield, the lower a stock’s fair value becomes. The second sign of trouble is inflation, fueled by high-energy costs. The price of crude oil may have topped out near term, but it is still well above $43.45 a barrel, where it ended 2004. My model shows a floor at my semiannual value level of $48.03 that could create a higher threshold price and make energy-induced inflation a major risk in 2006. In congressional testimony in early November, Exxon Mobil Chairman Lee Raymond commented that commodity speculation resulted in crude oil trading $20 a barrel above where supply and demand forces would have put the price. The weaker crude oil prices in November merely reduced the speculative premium and do not alter the longer-term supply and demand forces, which show shortages.

November Scorecard for the Major Indices Date Dow S&P 500 Nasdaq Utilities Transports Russell SOX

Oct. 31, 2005 10,440 1203.00 2120.00 401.11 3815.00 642.20 432.64 Nov. 30, 2005 10,806 1252.50 2233.00 400.15 4114.00 677.75 481.64 November Change 3.51% 4.11% 5.33% -0.24% 7.84% 5.54% 11.33%

Market Stats: Year to date, the Nasdaq is up 2.7%, rising 5.3% sequentially in November. The technology sector ended November 9.2% undervalued, vs. 12.7% undervalued at the end of October.

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Stocks’ weaker valuation is the third sign of trouble. Technology remains the cheapest sector, but at the end of November this reading dipped below 10% for the first time this year. Some sectors ended the month more than 5.0% overvalued: basic materials by 10.0%, capital goods by 6.1%, energy by 6.4%, finance by 5.5%, public utilities by 5.5%, and transportation by 5.0%. Tech CEOs and CIOs Also See Potential Problems November began with concerns about tech companies’ fundamentals. Altera (ALTR:Nasdaq) CEO John Daane warned that holiday sales of electronic devices could be weak as consumers tighten their belts. However, the early figures for the holiday season have been more promising, but it’s still too early to say that consumer spending for electronics is robust. Given the likelihood that the economy becomes a bit sluggish in the first half of 2006, the consumer may have a tighter budget, given higher energy costs, property taxes and mortgage interest payments. Last month also kicked off with a warning from Dell (DELL:Nasdaq) as the company lowered sales guidance, again citing weaker U.S. consumer sales. An anemic consumer will make corporate information technology spending the key driver for chip demand -- depending upon corporations’ budgets for network upgrades. I have been reporting that major telecom carriers are upgrading Internet protocol (IP) networks as demand for broadband and wireless connectivity continues, but this optimism was not evident in the October survey in CIO Magazine, a publication for IT executives. According to the Tech Future Growth Index (TFGI), which projects IT activity over the next 12 months, CIOs had reduced their spending plans to the lowest level of the year. In October, the TFGI dropped to 1.8 vs. 3.8 in September. In November, it inched up to 2.1, a positive, but that result still suggests that IT spending may have been postponed into the second half of 2006. TheStreet.com Technology Report model portfolio ended November with 15 long positions, and two short positions -- the Nasdaq 100 Unit Trust (QQQQ:Nasdaq) and Semiconductor HOLDRs (SMH:Amex). I consider 15 positions as the minimum number of longs, so if I remove a long position I will add a new name that is at least 20% undervalued, according to my model. But given my cautious market outlook, it will not be easy to find new candidates. In December, I will also be looking for specific stocks for the model portfolio as short sales. The end-of-month closes for November resulted in new monthly value and risky levels for all positions in the model portfolio, and these are found in the table on page 8. Semiconductors Return to the Spotlight as Intel Leads the Way

The Philadelphia Semiconductor Index (SOX) gained 11.3% in November and is now up 11.2% year to date, and Intel (INTC:Nasdaq) was pivotal for this turnaround. Despite Intel’s hefty gains during the month, I remain bullish on the stock for a number of reasons. First, telecom carriers are deploying WiMAX networks based on Intel's technology. This method of high-speed broadband Internet access is being delivered to businesses and residences. For example, a Wi-Fi hot spot that covers an area of only about 300 to 500 feet may satisfy the needs of retailers such as Starbucks, Wendy's and hotels and motels offering high-speed access for their customers and guests. But WiMAX stations cover a radius of about 15 miles, covering smaller cities entirely, and are also a cost-effective way to offer high-speed broadband in rural areas. Helping the stock bottom in early November was Intel’s announcement of a 25% increase in its quarterly dividend to 10 cents a share, beginning in the first quarter of 2006. Intel also expanded its stock repurchase plan by $25 billion. In its third-quarter earnings release, the company reported strong demand for notebook PCs but has been having trouble meeting that demand, which adversely affected its outlook for revenue. But this problem looks as if it is resolved with the reopening of an Arizona factory in November, which is expected to boost PC microprocessor supplies while lowering manufacturing costs. (Continued on the next page)

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Also in November, Intel began shipping the industry's first desktop processors that feature “virtualization,” which allows a computer to run different operating systems simultaneously. In early 2006, the company will enable its popular dual-core Pentium D to run virtualization, which will let users partition information and systems at the hardware level. Security upgrades can be implemented without having to stop work, allowing businesses to protect themselves from security breaches by filtering network traffic before it reaches the user. Improving efficiencies and multitasking are important features in the next PC upgrade cycle, and Intel’s virtualization will help it continue to be a leader in this area. Finally, and most importantly, Intel and Micron (MU:NYSE) launched IM Flash Technologies, a new company to produce flash memory for consumer electronics. The joint venture focuses on NAND flash memory, which is used in a growing number of popular devices such as the iPod nano, other MP3 players, digital cameras, storage gadgets and handheld devices. The company already has a $500 million deal to provide chips for Apple Computer’s (AAPL:Nasdaq) highly popular iPod products. Intel’s stock continued to climb last week on several other upbeat news items. On Tuesday, Apple said it may introduce its first laptop using Intel chips in January. Then Wednesday, Intel introduced its new Viiv PC platform on which product developers can build next-generation, Internet-delivered digital home entertainment systems, including a 10-foot TV, laptops and handheld devices. More than 40 companies are testing this technology, and new products could be announced in the first quarter of 2006. Last, to meet increasing demand for chips, Intel said it will be building another factory in Israel. These developments also led to Wall Street upgrades from the likes of Citigroup and Bear Stearns. SOX on a Run, Passes Quarterly Pivot Intel’s strength helped the Philadelphia Semiconductor Index close last week above my quarterly pivot at 487.90, which puts semiconductors back on track to lead the market. In April, I touted SOX leadership, which was confirmed in early July when the five-week modified moving average (MMA) crossed above the 200-week simple moving average (SMA), a bullish sign. The 200-week SMA continued to hold as the SOX made its late-October low, and the five-week MMA is now 471.90 with the 200-week SMA at 419.94.

Philadelphia Semiconductor Index (SOX) – Weekly Chart

Source: Athena Graphics On Telerate Plus

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My definition of SOX leadership is that its strength pulls the Nasdaq above the index’s May 2001 high of 2328, before the SOX moves back below its quarterly pivot at 487.90. In this bullish scenario, the SOX would continue higher toward its January 2004 high of 560.68 sometime in 2006. This would mean that my “Nasdaq 2300 or Bust / Nasdaq 2300 Then Bust” call was wrong. But if the SOX were to have a weekly close below 487.90 in December, then the downside risk in 2006 for technology and semiconductors would be at least 20%, based upon my model.

November Scorecard for the Semiconductor Industry

Date SOX Altera (ALTR)

Intel (INTC)

Advanced Micro (AMD)

Xilinx (XLNX)

Semi HLDR (SMH)

Oct. 31, 2005 432.64 16.66 23.50 23.22 23.95 33.55 Nov. 30, 2005 481.64 18.26 26.86 26.18 26.44 37.39 November Change 11.33% 9.60% 14.30% 12.75% 10.40% 11.45%

Semiconductors ended November 13.8% undervalued, down from 22.1% at the end of October. The five chip stocks in the model portfolio all had solid rebounds during the month: Altera (ALTR:Nasdaq) rebounded 9.6%; Brooks Automation (BRKS:Nasdaq) rose 10.1%; Intel (INTC:Nasdaq) logged the biggest gains, up 14.3%; while Sigmatel (SGTL:Nasdaq) showed the smallest gains, up 7.0%; and Xilinx (XLNX:Nasdaq) added 10.4%. Intel outperformed Advanced Micro (AMD:NYSE) by a slight margin, but AMD ended last week dangerously overvalued by 51.4%. Performance-wise in November, all five of the portfolio semiconductor stocks outperformed the Tech SPDR (XLK:Amex), which gained only 6.3%.

PC Makers: Apple Keeps Its Momentum, Others Are Undervalued

The hype about the iPod has traders still chasing Apple Computer’s stock, but the stock does not qualify for my model portfolio as shares are 35.6% overvalued. Apple has been one of the best-performing stocks for traders, and my technical model shows no signs that this momentum will end anytime soon. In fact, Apple reached another 52-week high at $72.74 last Friday. In my judgment Apple’s overvalued reading reflects legitimate concerns that are also seen in various independent research reports. According to sources that perform channel checks, there were price cuts for the iPod nano in China and Taiwan, and screen-quality problems elsewhere in Asia. These sources say that while Apple dominates the U.S. market for MP3 devices, that’s not the case in Asia, where cheaper MP3 players dominate. The iPod brand is seeing early and solid holiday demand in the U.S., but these same independent sources note that demand for the iPod nano had softened slightly because of the stronger-than-expected demand for the video iPod. Apple stores are fully stocked for the holidays, while stores such as Best Buy have shortages of the popular models. My sources also say that the IGB iPod shuffle may be discontinued, as demand dries up with overstocked shelves. Because Apple has pushed so many new and popular products on the market so quickly, there is a risk that older models have become obsolete. How Apple accounts for reduced revenue for returned items will be key to earnings in the current quarter; in its quarterly results, it appears that the company counts shipments as revenue. There is also risk of a delayed “halo” effect for new Macintosh computers, as Mac fans wait for the new Macs with “Intel Inside.” Cisco (CSCO:Nasdaq), a key supplier and partner to PC makers, has been a laggard in share price value, but a leader in providing IT products and services. The company is the top supplier of routers and switches to direct Internet traffic, and this business is expanding into home networking and security. In November, (Continued on the next page)

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Cisco reported that it was seeing strong demand for storage, Internet telephones and wireless, plus the company launched a couple of new technologies in this space. One, a new platform for small businesses, bundles data, Internet telephone and various services, and is aimed at the 35 million companies around the world with fewer than 100 employees. Cisco also released Wireless Mesh, a networking platform that combines wired and wireless networks for enhanced productivity and security, all from a centralized management console. Another positive for Cisco is the company’s purchase of Scientific-Atlanta (SFA:NYSE) for $6.9 billion, or $43 a share. Cisco is expanding into home computing and entertainment networking, and with the set-top boxes made by Scientific-Atlanta, the pair’s combined products will connect PCs, televisions and DVDs, with voice and data services. In addition, Cisco continues to gain Internet protocol (IP) contracts. Chinese telecom-equipment maker ZTE Corp. is marketing Cisco’s routers and switches to telecom service providers in the Asia-Pacific region, excluding Japan. This strategic alliance will help local services upgrade their networks to the latest technologies, which are necessary to expand into third-generation mobile services. Plus, China Telecom will be using Cisco’s routers to upgrade ChinaNet, the largest Internet protocol network in China. Cisco will also provide video and voice conferencing services to the Defense Department as a subcontractor to Northrop Grumman (NOC:NYSE). Cisco ended November 21.8% undervalued.

November Scorecard for the PC Makers Date Apple

(AAPL) Cisco

(CSCO) Dell

(DELL) EMC

(EMC) Gateway (GTW)

Juniper (JNPR)

Oct. 31, 2005 57.59 17.45 31.88 13.96 2.85 23.33 Nov. 30, 2005 67.82 17.54 30.15 13.93 3.04 22.49 November Change 17.76% 0.52% -5.43% -0.21% 6.67% -3.60%

Computer manufacturers ended November 23.4% undervalued, down from 27.4% at the end of October. The PC model portfolio members lagged the broader market, with Cisco up fractionally, EMC (EMC:NYSE) down fractionally, Gateway (GTW:NYSE) up 6.7%, and Juniper Networks (JNPR:Nasdaq) down 3.6%. All four stocks are undervalued enough to remain in the model portfolio. Software: An Older Name Finds New Vitality

The behemoth in this segment, Microsoft (MSFT:Nasdaq), is a mature company, but I expect it to return to growth mode in 2006. The company rolled out its Xbox 360 video-game console on Nov. 22, and the console sold out almost immediately. If new shipments are on schedule, Microsoft expects to sell 3 million units within the first 90 days after the launch. Plus, the software giant understands that as more Internet users migrate to high-speed access, consumers and businesses will want more Internet-delivered products and services. With the legal issues that plagued its growth resolved, Microsoft will be launching new Windows and Office products with live updates over the Internet next year. Software thus will be delivered over the Web, replacing software installed out of the box. In November, Microsoft settled its antitrust issues with RealNetworks (RNWK:Nasdaq) in a $761 million deal, and now the two companies are cooperating to develop products and services to compete with Apple’s iPod franchise. Microsoft will provide product development, distribution and promotion, while RealNetworks will support Microsoft's MSN Search. One product set for launch is RealNetwork’s Rhapsody To Go music download service using Windows Media. (Continued on the next page)

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Separately, Microsoft and Yahoo! (YHOO:Nasdaq) will be commingling instant messaging services for their combined 275 million users. Microsoft’s MSN is also interested in partnering with AOL.com. These initiatives, among others, should return Microsoft to growth mode for much of 2006. The other software companies in the model portfolio turned in a mixed performance in November. Shares of RSA Security (RSAS:Nasdaq) rebounded 14%. The company’s software protects online identities and digital assets, using authentication and encryption to secure Internet systems against fraud and cyber-terrorism, a Homeland Security priority. In early November, Merrill Lynch upgraded RSA Security to buy from neutral, citing an attractive valuation and projecting an upturn in demand. Also, software company Yodlee and RSA Security formed an alliance to ensure authentication compatibility between financial institutions and their customers. And RSA launched its new card-management system to secure authentications stored in its Smart Cards, which employees use to get into their building, log on to their PC and access applications. This enhanced security requirement was mandated by the government to help federal agencies meet security standards set by Homeland Security. Symantec (SYMC:Nasdaq) plunged 26.2% in early November as a number of brokerages downgraded the company after it lowered revenue guidance. Symantec’s integration of Veritas ran into some minor glitches, causing delays in the release of some security products, but these problems should be resolved in 2006. Aiding its recovery, Symantec and Microsoft announced they were expanding their longtime relationship in order to secure archiving and recovery functions on the Microsoft SQL Server, which is used by medium and large enterprise customers. The turnaround gained credence as VARBusiness magazine cited Symantec for technology innovation in integrating Veritas’ email and archiving software. This software package satisfies the email-retention requirements mandated by the Sarbanes-Oxley Act. Symantec also announced the first seamless real-time solution to protect Internet protocol-based automated teller machines (ATMs) from security breaches. VeriSign (VRSN:Nasdaq) declined 5.9% in November on lower-than-expected quarterly revenue from its mobile entertainment business, which includes ring tones for cell phones. But Wall Street analysts didn’t lower their 12-month forward EPS estimates, so the price weakness just made shares more undervalued, at 33.8% as November ended. New deals should perk up the stock in 2006, and the company announced several in the wireless messaging segment, a key growth area. These include portal WEL Corp., which plans to connect 500 global carrier networks, and the Canadian Wireless Telecommunications Association (CWTA), which has 15.5 million subscribers. Airspan (AIRN:Nasdaq), a provider of broadband wireless services for WiMAX systems, will use VeriSign’s technology to help prevent cyber-piracy. In addition, VeriSign launched a software package that speeds up wireless carriers’ next-generation services, and completed the sale of its payment gateway business to PayPal.

November Scorecard for Internet and Software Companies

Date Microsoft (MSFT)

RSA Security(RSAS)

Symantec (SYMC)

AT&T (T)

Time Warner (TWX)

VeriSign (VRSN)

Oct. 31, 2005 25.70 11.40 23.85 23.85 17.83 23.63 Nov. 30, 2005 27.68 13.00 17.61 24.91 17.98 22.23 November Change 7.70% 14.04% -26.16% 4.44% 0.84% -5.92%

Software ended November 8.2% undervalued, down from 11.2% at the end of October. Although the model portfolio members in this segment had mixed performances in November, all six stocks are sufficiently undervalued to remain in the portfolio. (Continued on the next page)

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Tech Hotspots ►Sirius Beaming Loud and Clear, but No Longer Undervalued Sirius Satellite Radio (SIRI:Nasdaq) added more than 1 million new subscribers in the first nine months of 2005, and subscriber growth is expected to be robust during the holidays. The radio service should have more than 3 million subscribers by year-end. The stock is now 5.7% overvalued and thus no longer qualifies to be a member of the model portfolio, so I love the product but not the stock at this time. By comparison, XM Satellite Radio (XMSR:Nasdaq) is 18.3% undervalued with fair value at $36.19. Its stock has a negative weekly chart profile with the five-week modified moving average at $30.82. I would consider adding XM to the model portfolio if it becomes more than 20% undervalued. That looks likely if shares weaken to my semiannual value levels at $27.76 and $24.02. ► AOL Turnaround: Will Microsoft Be Its Partner? Time Warner (TWX:NYSE) is depending upon revenue growth from America Online, and the new AOL.com portal is key to this division’s turnaround. AOL continues to increase the content of the new portal, which has the richest content of any Internet portal and was designed for the growth of high-speed broadband access; plus, it has a strong brand name and huge subscriber base. Meanwhile, billionaire investor Carl Icahn has announced a deal with investment bank Lazard to further analyze various strategic alternatives to maximize the value of Time Warner shares. Time Warner continues to be in discussions for partnership deals for AOL.com. Yahoo! (YHOO:Nasdaq) backed away in November, but talks with Google (GOOG:Nasdaq) and Microsoft continue. In my opinion, a deal with Microsoft would make the most sense for both parties, as MSN views Google as its biggest competitor. With Microsoft’s software available over the Internet, AOL.com would be a great marketing partner. AOL and MSN also could partner in instant messaging, an area in which Google is just getting started. AOL Instant Messenger (AIM) combined with MSN Messenger could create a stumbling block for Google. With AOL likely to launch a subscription-based AIM service for small businesses and with Microsoft’s software on the Web, the combination would be a powerful entity. AOL, which attracts as many as 112 million unique visitors a month, is structuring more ways to increase advertising revenue as its dial-up subscriber base continues to decline. In November, AOL announced that it would launch a free Internet television service in early 2006 to entice TV viewers online. This service should generate additional ad dollars, as it will feature some 3,400 hours of broadcasting from 100 TV series that Warner Brothers owns. AOL also launched AOL Pictures, a free photo-sharing Web site that offers users unlimited online digital-photo storage and software to create photo albums. ►SBC Takes AT&T Name SBC Communications completed its acquisition of former parent company AT&T and reclaimed the old name as well. The merged AT&T (T:NYSE) is the most diversified telecom provider with services that include voice, data, networking, e-business and directory publishing servicing homes and businesses. It also owns a 60% stake in Cingular Wireless, the nation’s largest wireless company.

►AMD vs. Intel More than 24 news organizations have expressed concern that a judge might severely restrict public access to information in Advanced Micro Devices' (AMD:NYSE) antitrust lawsuit against Intel. The media wants to cover the case for its news value, but the court may want to protect both companies’ intellectual property. Neither Intel nor AMD have filed a request to seal information in the case, and both companies are in negotiations over how to proceed with the suit. In its lawsuit filed in June, AMD claimed Intel strong-armed PC makers by offering rebates in exchange for contracts that limited or excluded them from using non-Intel chips. No trial date has been set, and Intel has denied doing anything illegal.

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Key Levels for TheStreet.com Technology Report Model Portfolio

This table of key statistics gives the price levels to watch for when initiating, building up or closing positions. During the month I will consider adding to positions on weakness to the value levels, and reducing positions on strength to the risky levels. Each month, this table will be revised as necessary to reflect any new levels.

Company Nov. Closes UV By Fair

Value Value Levels Pivots Risky Levels

Altera (ALTR:Nasdaq) $18.26 25.0% $24.33 $13.22 S $19.32 M / $19.94 M $21.82 Q / $24.28 Q Brooks Automation (BRKS:Nasdaq) 12.89 51.1 26.34 12.46 M / 10.04 M 13.10 Q 18.85 S Cisco Systems (CSCO:Nasdaq) 17.54 21.8 22.44 18.33 M / 18.87 M 18.99 S / 20.79 Q EMC (EMC:NYSE) 13.93 46.7 26.12 13.20 Q 14.14 M 14.84 M / 15.29 Q Gateway (GTW:NYSE) 3.04 65.2 8.73 2.80 Q 5.47 Q Intel (INTC:Nasdaq) 26.68 11.4 30.11 23.34 Q / 19.90 S 26.55 M 28.07 M / 30.68 Q Juniper Networks (JNPR:Nasdaq) 22.49 43.5 39.79 25.11 M / 25.53 M 32.76 Q / 33.33 Q Microsoft (MSFT:Nasdaq) 27.68 5.9 29.43 24.96 Q 26.44 M / 26.72 Q 28.21 M / 32.75 S RSA Security (RSAS:Nasdaq) 13.00 40.5 21.86 8.90 M / 8.75 M 17.98 Q / 21.96 Q

SigmaTel (SGTL:Nasdaq)

14.56 22.6 18.82 30.01 Q

Symantec (SYMC:Nasdaq 17.61 37.1 28.02 14.91 A 20.37 M / 20.52 M 21.33 A / 24.65 S AT&T (T:NYSE) 24.91 26.0 33.67 23.91 M / 23.39 Q 24.55 M 27.07 Q Time Warner (TWX:NYSE) 17.98 22.3 23.14 17.51 M 17.73 M / 18.47 Q 20.11 Q VeriSign (VRSN:Nasdaq) 22.23 33.8 33.56 21.30 M 24.02 M 30.33 Q / 32.42 Q Xilinx (XLNX:Nasdaq) 26.44 23.5 34.54 24.40 M / 24.05 M 33.08 Q / 36.34 Q

Short Positions

Nasdaq-100 Trust (QQQQ:Nasdaq) 41.24 39.33 M 41.03 M 42.51 Q / 43.38 Q Semiconductor HLDRs (SMH:Amex) 37.39 35.71 M 37.27 Q 38.25 M / 42.87 Q

Benchmark Tech SPDR (XLK:Amex) 21.71 5.8 23.04 20.82 M 21.69 M 22.33 Q / 22.96 Q

Legend: UV: undervalued; M: monthly; Q: quarterly; S: semiannual; A: annual. Source: Global Market Consultants, Ltd.

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Reading the Table Fundamental screens: I calculate a fair value for every stock, which is the price that a stock can trade at in a perfect world. Fair value is not a price target; it is based upon the stock's past data and projections for the future, including its trailing 12-month EPS, the forward 12-month estimated EPS, and the yield on the 30-year Treasury. How these data points are weighted is based on a historical analysis of the stock's price history, with some 17 other variables influencing the calculation based on its sector and industry group. UV By: The percent that the stock is trading below my calculation of fair value. Value levels, risky levels and pivots: A value level is a price at which buyers should emerge on share price weakness, while a risky level is a price at which sellers should reduce holdings on share price gains. A pivot is a value or risky level that was violated in its time horizon, and acts as a magnet during the remainder of that time horizon. These levels are calculated in weekly (W), monthly (M), quarterly (Q), semiannual (S) and annual (A) time horizons, based upon the past nine closes in each time horizon. My theory is that the closes over a nine-year period are the summation of all bullish and bearish events for that market or specific stock. Weekly chart profile: A stock with a positive profile has a weekly close above its five-week modified moving average with a rising 12x3 weekly slow stochastic, which is a measure of momentum on a scale of zero to 100. A stochastic reading below 20 is oversold, while a reading above 80 is overbought.

Tuesday, December 06, 2005

Technology Report Model Portfolio

Long Holdings

Company Name Current Quote

Initial Purchase Date

Most RecentTrade Date

# Shares

Cost Basisper Share

Current Value

$ Gain/ Loss

% Gain/Loss

Altera (ALTR) $ 19.40 09/21/2005 09/21/2005 200 $ 19.05 $ 3,880.00 $ 70.00 1.84%

Brooks Automation (BRKS) $ 13.26 09/13/2005 09/13/2005 300 $ 13.77 $ 3,978.00 $ -153.00 -3.70%

Cisco (CSCO) $ 17.56 04/04/2005 06/27/2005 600 $ 18.63 $ 10,536.00 $ -644.25 -5.76%

EMC (EMC) $ 14.28 06/29/2005 06/29/2005 300 $ 13.75 $ 4,284.00 $ 159.00 3.85%

Gateway (GTW) $ 3.03 07/06/2005 08/16/2005 2400 $ 3.30 $ 7,272.00 $ -648.00 -8.18%

Intel (INTC) $ 26.67 06/27/2005 10/13/2005 450 $ 25.37 $ 12,001.50 $ 586.50 5.14%

Juniper Networks (JNPR) $ 23.01 07/25/2005 10/18/2005 350 $ 22.67 $ 8,053.50 $ 120.75 1.52%

Microsoft (MSFT) $ 27.69 06/30/2005 06/30/2005 150 $ 25.06 $ 4,153.50 $ 394.50 10.49%

RSA Security (RSAS) $ 11.43 07/11/2005 07/11/2005 325 $ 12.21 $ 3,714.75 $ -253.50 -6.39%

SigmaTel (SGTL) $ 15.68 09/08/2005 09/08/2005 200 $ 19.44 $ 3,136.00 $ -752.00 -19.34%

Symantec (SYMC) $ 17.56 05/11/2005 11/02/2005 600 $ 19.73 $ 10,536.00 $ -1,301.25 -10.99%

AT&T (T) $ 25.20 07/11/2005 07/11/2005 170 $ 23.70 $ 4,284.00 $ 255.00 6.33%

Time Warner (TWX) $ 18.25 04/04/2005 04/20/2005 450 $ 17.32 $ 8,212.50 $ 420.75 5.40%

VeriSign (VRSN) $ 22.69 07/21/2005 08/24/2005 300 $ 22.82 $ 6,807.00 $ -39.00 -0.57%

Xilinx (XLNX) $ 26.98 06/20/2005 06/20/2005 150 $ 26.52 $ 4,047.00 $ 69.00 1.73%

Short Sales

Company Name Current Quote

Initial Purchase Date

Most RecentTrade Date

# Shares

Cost Basisper Share

Current Value

$ Gain/Loss

% Gain/Loss

Nasdaq-100 Trust (QQQQ) $ 41.94 11/17/2005 11/17/2005 (100) $ 40.91 $-102.60 $ -102.60 -2.51%

Semiconductor HLDRs (SMH) $ 38.44 08/09/2005 12/01/2005 (300) $ 37.58 $-257.00 $-257.00 -2.28%

Performance

Total Average Return (including cash) 5.67%

2005 YTD Return 5.67%

Performance results listed here reflect values of stocks as of the close of the most recently completed trading day, and do NOT take into account dividends paid, interest earned or commissions. Results are updated overnight and posted prior to the market open the following business day. The 2005 Year-to-Date Return figure reflects changes since inception at the market open April 4, 2005. The Total Average Return figure reflects changes since inception at the market open April 4, 2005.

Date of Portfolio Inception Open Price Current Price % Gain/Loss Since

Portfolio Inception 2005 YTD Return

Tech SPDR (XLK) 4/4/2005 $ 19.35 $ 21.94 13.39 % 3.74 %

Date of Portfolio Inception Open Price Current Price % Gain/Loss Since

Portfolio Inception 2005 YTD Return

S&P 500 Index (SPX) 4/4/2005 $ 1,172.79 $ 1,263.70 7.75 % 4.10 %

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Tuesday, December 06, 2005

Reader Feedback

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Question: Do you think that Yahoo! (YHOO:Nasdaq) can trade up to $45? – J.

Answer: Yahoo! is 8.3% undervalued with fair value at $44.97. The weekly chart profile is positive with the five-week modified moving average (MMA) at $38.36. My monthly value levels are $38.39 and $38.16 with my quarterly risky level at $44.73. Odds are that Yahoo! stays below $45. Question: Do you think Qualcomm (QCOM:Nasdaq) is worth buying at these levels? – R.

Answer: Qualcomm is 4.4% undervalued with fair value at $47.21. The weekly chart profile is overbought with the five-week MMA at $44.21. My monthly value level is $43.33 with quarterly risky level at $51.65. If you are a trader, you can buy Qualcomm with a sell-stop close below $43.44 for a trade up to $51.65. If you are an investor, shares are not undervalued enough for the long term. Question: Where do you think Avid Technology (AVID:Nasdaq) is going from here? – D.

Answer: Avid Tech is 13.9% undervalued with fair value at $59.22. The weekly chart is positive with the five-week MMA at $48.19. If weakness holds my quarterly pivot at $46.45, shares can return to my semiannual pivot at $51.30 and perhaps to my annual risky level at $53.63. I would book profits there and move on. Question: Is it time to buy McAfee (MFE:NYSE)? – S.

Answer: No! MFE is 10.3% overvalued with fair value at $25.34. Its weekly chart profile is negative with the five-week MMA at $29.25. My annual value level is $25.59 with my semiannual risky level at $29.41. Question: Don't you think as the Nasdaq rises everyone will pile into Google (GOOG:Nasdaq), thus maybe taking it to $450 by year's end? I just don't see how Google can go down when you are predicting a rise in the Nasdaq [to 2300]. – B.

Answer: An individual stock can move counter to the direction of the market. I am not saying that Google will move lower, but the stock is 12.8% overvalued with fair value at $370.08. The weekly chart profile is overbought with the five-week MMA at $374.07. My monthly pivot is $398.50 with my monthly risky level at $455.85. So, yes, Google can trade up to $450 by year's end. Question: Why does Marvell Technology (MRVL:Nasdaq) keep rising in price? – M.

Answer: Marvell has the technical momentum to trade higher, but this is not backed by valuation. The stock is 29.2% overvalued with fair value at $45.52. The weekly chart profile is positive with the five-week MMA at $50.47. Marvell should continue higher as long as weakness holds my monthly value level at $52.08. Question: What does your model make of Redback Networks (RBAK;Nasdaq)? – R.

Answer: Redback is 74.4% undervalued with a positive weekly chart profile, which suggests that shares can continue to trade to new 52- week highs. I would consider a close below my monthly pivot at $12.28 as a sell stop. Question: Advanced Micro Devices (AMD:NYSE) seems to be gaining market share over Intel (INTC:Nasdaq). Why is it not rated a buy? – S.

Answer: AMD is dangerously 51.6% overvalued with fair value at $18.44. The weekly chart profile is positive with the five-week MMA at $24.69. New highs are feasible as long as weakness holds my quarterly pivot at $27.33.

Tuesday, December 06, 2005

Reader Feedback and Questions: Please email Richard Suttmeier directly. Please direct all account-related inquiries to customer service.

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Richard Suttmeier, writer of TheStreet.com Technology Repregional brokerage firm with its main office in New York, andTheStreet.com is a publisher and is registered as an investmCommission. Mr. Suttmeier is restricted from transacting forTechnology Report. Joseph Stevens & Co., Inc., and its afin, or buy or sell the securities, or derivatives thereof, of comand may take positions inconsistent with the views expresse TheStreet.com Technology Report contains Mr. Suttmeier’stherein constitutes a recommendation by Mr. Suttmeier, Josparticular security, portfolio of securities, transaction, or inveextent any of the information contained herein may be deemimpersonal and not tailored to the investment needs of any of future performance. Investing in the stocks chosen for TheStreet.com Technologcompanies may have limited operating histories and little avbe volatile and illiquid. Trading in such securities can result You should use only risk capital, and not capital required forloans, mortgages or education. TheStreet.com Technology Report portfolio is a model portfhis stated investment strategy. Your actual results may differeasons, including, without limitation: (i) performance resultscommissions that you may incur; (ii) performance results forcertain market factors, such as lack of liquidity, that may affportfolio may be volatile, and although the "purchase" or "sathe model portfolio until confirmation that the email alert hasfactors may cause the price you obtain to differ substantiallyprices of stocks in the model portfolio at the point in time yomay be higher than such prices at the time such stocks wer

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