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Technology Stocks : Newbridge Networks
NN 17.18-0.5%Dec 23 3:59 PM EST
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To: Anthony Ostroski who wrote (2524)12/4/1997 11:54:00 AM
From: Tunica Albuginea  Read Replies (2) of 18016
 
Anthony Ostroski ,Re:" IMO ,NN will break support where it is now (43) and find itself 30-35 ; as opposed to say a 45-50 trade range.".

You have a good point.This morning I got out at 43.5. Even though a long term investor I think will do well buying NN at the current prices ( i always think of NN as a premiere networker ),as a trader I perceive near term instability primarily because
NN's near term profit margins may come under pressure because of :

-Asia-Japan scenario and because of overall market conditions.
- NN's hefty PE of ? 35.
- Japan's economy being stalled, Europe retrenching so as to join Europ Commun Market, the Telecoms fighting turf wars rather than worrying about upgrading equip, may cut into new orders.
- US Telecom Bill complicating rather than simplifying and opening up competition.
- AT&T is now downsizing, cutting costs as near term priority one, under new CEO Armstrong.
.UB acquisition was good in terms of their large installed customer base but they need time to digest it.

The most worrisome to me near term aspect is Japan. Yesterday the Wall St Jour mentioned that the only thing that can jumpstart their economy again is cutting taxes so the Japanese people can have more buiyng power; a la Ronald Reagan in 1981.All other options are unworkable.My concern is that Japan's governing "intelligentsia" lacks R.Reagan's visionary "supply-side economics" which has put the USA in No 1 spot.And that they will thus flounder and drag the market down.
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