March 24, 2001

Dow Jones Industrial Average 9504.78
S & P 500 1139.83
NASDAQ Composite 1928.68

Our portfolios continue to remain diversified. Our portfolios contain a blend of high quality bonds (generally via closed end bond funds trading on the New York Stock Exchange and selling at a discount to Net Asset Value) and what we consider to be Value Common Stocks. For our Non Retirement Plan accounts we have been using selective short positions over the last year or so.

We are constantly researching both current and potential future investments. For years clients were asking us why our portfolios did not include such names as Lucent Technologies, Cisco Systems, various Dot.coms and other similar companies, which were perceived as growth investments. We were concerned for a long time, with the valuations that were being assigned to those companies. Now that the valuations have dropped so significantly, we have started accumulating positions in several of these companies. We have started investing in some of these types of companies after they have lost well in excess of 50 % off of their market highs (some have experienced losses in excess of 90 % in value, before we started our accumulation).

The technology sector has taken a tremendous hit over the last year or so, yet without understanding the parameters of a specific company and industry, investing in these specific companies can remain painfully unprofitable or at the least, dangerous because of a lack of understanding of both valuations and the industry. We are very cognizant of emerging technologies, the business climate of the technology industry, especially the fiber optic sector that includes such companies as Ciena, Corvis, Corning, Avanex, Nortel, Lucent, Cisco and Sycamore Systems. We continue to watch the fiber-optic sector very closely, as we feel that it is the “heart” of future technologies. The industry is a difficult industry to understand. The competition is fierce and disruptive. The industry is in a hyper growth stage, yet it faces the potential of future commoditization.

As we all know, these are financially stressful times. Our goal is to complement our managed portfolios with our inordinate amount of unbiased research into specific companies and industries. We are quite willing to recognize our mistakes and we are constantly trying to find mistakes in our current research. We generally only invest for the long-term. When we begin accumulating a position we realize that the results of our investment may take upwards of 5 years or more to show positive returns. We realize that these returns may not ever materialize. Because of this, we continue to emphasize diversified portfolios.

Our investment philosophies are based on the research techniques developed by successful “old timers” like Benjamin Graham, Warren Buffett, Charlie Munger, John Templeton, David Dreman and Peter Lynch, just to name a few (there are so many others). When we purchase a position in a company, our goal is to keep that investment in our portfolio for a period of time, which my second favorite investor (Warren Buffett) calls forever.

Listed below are several companies, which we are currently holding as core investments. Please be very aware that by mentioning these companies we are NOT recommending them to you for purchase. It is quite possible that the companies mentioned in this section could be eliminated from our portfolios tomorrow. We are mentioning these companies for a reference and as a means of discussion. The following companies are investments we have purchased during the last week.

Lucent Technologies (LU) 11.62
AT&T (T) 21.32
Hasbro (HAS) 12.60
Occidental Petroleum (OXY) 23.72
Avanex (AVNX) 15.44
Alcoa (AA) 34.04



Information herein is believed to be reliable, but its accuracy and completeness cannot be guaranteed. Opinions, estimates, and projections constitute our judgment and are subject to change without notice. This publication is provided to you for information purposes only and is not intended as an offer or solicitation. Redfield, Blonsky & Co. LLC and Ronald R Redfield, CPA, PFS, may hold a position or act as an advisor on any investments mentioned in a report or discussion.