Minimizing Risk

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After you receive this alert, I will be removing two positions from the model portfolio, and making adjustments to finalize some other positions in the model portfolio.

As you learned in an email yesterday from Editor in Chief Dave Morrow, TheStreet.com has decided to discontinue the Technology Report effective with the close on Feb. 28; your subscription will be transferred over to James Altucher's Internet Review. Check the email for more details, or call TheStreet.com customer service at 1-866-321-TSCM (8726). I want to thank TheStreet.com for the opportunity to write a newsletter, and you will be in good hands with Altucher.

With this newsletter coming to an end, I'm positioning the model portfolio appropriately. First, I am removing small- and mid-cap companies that I believe would be too risky to hold on a long-term basis without my monitoring them. Second, I am also reducing positions to reflect minimum holdings in other names, given my recent analysis that technology is not cheap enough fundamentally at this time to justify increasing exposure to the sector.

I will discuss my investment themes for technology in the final Monthly Report, which will be published on Feb. 28. I will periodically profile the stocks remaining in the model portfolio in subsequent RealMoney columns.

This morning, I am removing the 170-share position in Click Commerce (CKCM:Nasdaq) with shares trading around $26.50. This position was added at $23.38 on Dec. 12, and I will be booking a gain of 13.3%. This is a small-cap stock, which will be vulnerable to an earnings disappointment on Feb. 21, after postponing its report from Thursday. A small gain seems prudent rather than take the risk.

I am also removing the 300-share position in Powerwave (PWAV:Nasdaq) with shares trading around $14.80. This position was added at $13.13 on Jan. 20, and I will be booking a gain of 12.7%. This is a mid-cap stock. I added this stock when it was buy rated according to ValuEngine, and today it's rated a hold. This stock can become volatile, and given my market concerns I am closing this position.

Even though I like Cisco Systems (CSCO:Nasdaq) as a longer- term holding because of its expansion into home networking, it's just 5.6% undervalued. Cisco was one of the original members of the portfolio, added on April 4 at $17.66. I will keep this core holding, but will reduce this position by 375 shares. Based upon Thursday's close at $19.98, I will be booking modest gains of 3.8% on 175 shares and 4.1% on 200 shares.

Juniper Networks (JNPR:Nasdaq) is rated a hold and is 42.3% undervalued. This profile qualifies the company as a member of a long-term technology portfolio, but since I will not be monitoring this stock on a daily basis, I am reducing this holding to a core position of 175 shares added at $17.75 on Jan. 26. Reducing this position at Thursday's close of $18.62 books losses of 13.9% on 150 shares, 12.1% on 175 shares, and 10.3% on 175 shares.

Symantec (SYMC:Nasdaq) is rated a hold and is 22.8% undervalued. I am reducing this holding to a core position of 200 shares added at $19.25 on Nov. 2. The remaining balance of 225 shares will be removed from the model portfolio now. At Thursday's close at $17.51, losses of 4.4% will be realized on 50 shares, and a loss of 20.8% will be realized on 200 shares.

Regards,

Richard Suttmeier

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