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Technology Stocks : Nortel Networks (NT)
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To: The Phoenix who wrote (7370)10/24/2000 9:49:10 AM
From: telecomguy  Read Replies (1) of 14638
 
Without repeating all of my points, the key point you fail to understand is that CSCO is a PRODUCT company. As result, they are much more vulnerable to new companies who develop better mousetraps. And with the stratospheric valuation that new technology/R&D companies are getting, the old CSCO model of buying up any potential competitor is no longer feasible without putting huge strain on PER SHARE earnings.

Certain conditions have changed in the market whereby CSCO business model is under stress. Add to the hordes of router companies nipping at CSCO's heels, CSCO decides that it has to get into the Carrier market for the core network infrastructure business. This is a very different game as it requires huge expertise, in-house engineering, years of Telco experience & legacy network experience to boot -- after all you can't MIGRATE Telcos to the next-gen network without doing pitchfork upgrade if you've never built the old "legacy" network.

I hope you didn't put most of your money on CSCO since you are constantly pointing to me how stronger CSCO is positioned than NT is going forward ........... because when we started this debate, i recall NT was quite below CSCO price and where are they now?

I correctly called NT's domination over LU over a year ago and I will be correct again when the valuation between CSCO and NT continues to narrow as the market finally understands the CSCO exposure and NT strength in the upcoming networking war.
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