More negative B.S. !
T. Rowe Price's Robert Gensler (Transcript of Interview)
Baltimore, Jan. 16 (Bloomberg) -- The following is a transcript of a Bloomberg
interview with Robert Gensler, portfolio manager of the T. Rowe Price Media
and Telecom Fund. The reporter is Su Keenan.
KEENAN: ROBERT GENSLER BELIEVES THERE IS A RED LIGHT OUT
THERE. HE IS VERY CAUTIOUS ON TECH. BELIEVES THERE MAY BE
BETTER OPPORTUNITIES TO BUY TECH ON THE CHEAP. DOESN'T THINK
THOSE OPPORTUNITIES ARE RIGHT NOW. WHY IS THAT?
GENSLER: HELLO. BECAUSE MAINLY BECAUSE IN THE
COMMUNICATIONS EQUIPMENT SPACE, WE STILL HAVEN'T SEEN THE
BIG MISSES. WE'VE ANTICIPATED THEM NOW FOR SEVERAL MONTHS.
IT'S NOT LIKE IN THE SEMICONDUCTOR AREA WHERE WE KNOW
THERE ARE CYCLICALS AND CAN TROT OUR WAYS THROUGH THE
MISSES. THIS WILL BE THE FIRST TIME WE'LL SEE COMPANIES, LARGE
COMPANIES LIKE A NORTEL, HAVE TO TAKE DOWN GUIDANCE OR
MISS NUMBERS. I'M NOT SO SURE INVESTORS WILL SEE THAT AS A
BOTTOM YET. I THINK THESE MISSES WON'T COME UNTIL THE MARCH
TIME FRAME.
KEENAN: WE ALREADY HAD NOKIA OUT WITH A MIXED PICTURE.
GENSLER: NOKIA IN THE WIRELESS BASIS IS SOMEWHAT UNRELATED
TO THE DATA COM SPACE. WITH CAPITAL SPENDING DOWN, YOU
COULD HAVE MUCH BIGGER MISSES. NOKIA'S TOTALLY UNRELATED.
KEENAN: TELL US WHAT YOU SEE AS THE BIG NAMES AND THE BIG
NUMBERS YOU ARE WAITING TO HEAR.
GENSLER: THE BIGGEST, MOST IMPORTANT IS NORTEL, WHICH WILL
COME ON THURSDAY, I BELIEVE. IT WILL MAKE THE DECEMBER
QUARTER. MORE IMPORTANT IS WHAT THEY SAY ABOUT THEIR
OUTLOOK AND WHETHER THEY HAVE COME TO GRIPS WITH THE FACT
THAT THE OUTLOOK WILL BE SLOWING THROUGH MARCH AND JUNE.
KEENAN: ALL RIGHT. WHAT IS YOUR FEELING? WHAT IS YOUR READ
ON IT?
GENSLER: MY FEELING IS THEY'LL SAY DECEMBER WAS GOOD AND
THEY'LL BE QUITE MUTED TO CAUTIOUS ON THE NEAR TERM OUTLOOK
STOCKS MAY TRADE ALMOST SIDEWAYS, AND THE MORE IMPORTANT
THING WILL BE OUT IN THE APRIL TIME FRAME WHEN WE SEE
REALITY, WHEN WE TURN THE NEXT CARD UP ON THE DECK.
KEENAN: NOW YOU RUN THE T. ROWE PRICE MEDIA AND
TELECOMMUNICATIONS FUND. TELL US WHERE YOU ARE
YEAR-TO-DATE AS TO HOW DIFFICULT IT IS TO BE RUNNING IN THIS
SECTOR RIGHT NOW?
GENSLER: YEAR-TO-DATE, WE ARE UP 17%. IT'S BEEN A GOOD WEEK
AND A HALF. BECAUSE THE TELECOM SERVICES SPACES
REBOUNDED NICELY. WE'VE MADE BIG BETS ON THE MEDIA SPACE,
ALL WHICH WORKED NEAR TERM.
KEENAN: THE ONE-YEAR RETURN IS DOWN 11. THAT HAS BEEN A
PROFITABLE NEW YEAR FOR YOU. YOU MADE SOME BETS ON AT&T
AND SPRINT. TELL US HOW THEY WORKED OUT FOR YOU.
GENSLER: AT&T, SPRINT AND WORLDCOM, ALL THREE, WERE SO
BEATEN UP AT THE END OF LAST YEAR, AS MORE OF A RECOVERY
RALLY AS WE LEARNED BUSINESS MAY BE DIFFICULT, BUT IT'S NOT
THE END OF THE WORLD.
KEENAN: AGAIN, IT'S REAL DIFFICULT TO READ WHICH WAY WE'RE
GOING HERE. YOU ARE THE PRO.
GENSLER: I DON'T KNOW IF I AM THE PRO, BUT WE TRY. I THINK IN THE
LONG DISTANCE SPACE, THINGS ARE STABILIZING. MORE
IMPORTANTLY IN THE WIRELESS SERVICE SPACE, PEOPLE WERE
WORRIED THAT COMPETITION WAS GOING TO CAUSE AGAIN ALMOST
THE SKY IS FALLING, THE END OF THE WORLD. I THINK WE ARE IN OK
SHAPE THERE, AS WELL.
KEENAN: IT IS DIFFICULT TO KNOW WHILE YOU ARE WAITING FOR
THESE BIG REPORTS, IT'S DIFFICULT TO KNOW WHAT TO DO WITH
THESE STOCKS.
GENSLER: YES. IT'S OBVIOUS MANY PLAYERS ARE SITTING ON THE
SIDELINE. THERE IS A PENT-UP DEMAND TO GET BACK IN I STILL FEEL
IN COMMUNICATIONS EQUIPMENT, THERE IS BIG DISAPPOINTMENTS
TO HAPPEN. IT'S NEVER IN THE NAMES.
KEENAN: YOU ARE UNDERWEIGHTED FOR THE MOST PART. I WOULD
IMAGINE YOU ARE JUST WAITING ON THE SIDELINES FOR SOME
SIGNAL. CAN YOU TELL ME WHAT THAT SIGNAL IS?
GENSLER: JUST TO CORRECT, I AM UNDERWEIGHT IN TECHNOLOGY
AND PROBABLY MEDIA AND CABLE ARE OVERWEIGHT, THE REAL
SIGNAL IS JUST TO SEE THE MISSES AND THE MAGNITUDE AND SEE
HOW THE STOCKS PERFORM. THERE IS NO -- YOU DON'T BECOME A
HERO BY LOSING MONEY BEING IN THE NAMES. YOU CAN USUALLY
GET BACK IN AFTER WE SEE THE MAGNITUDE OF THE MARCH-JUNE
TIME FRAME EARNINGS MISSES.
KEENAN: DO YOU THINK IT'S TOO EARLY TO INVEST IN TECH
AGGRESSIVELY, EVEN THOUGH THAT'S WHERE YOUR HEART LIES.
TELL ME WHEN YOU THINK THE BOTTOM WILL COME?
GENSLER: I THINK IN THE NEXT 60 TO 120 DAYS. THE BACK HALF OF
THE YEAR NEXT YEAR LOOKS GOOD.
KEENAN: LONG TERM YOU ARE CAUTIOUSLY OPTIMISTIC. THE
FUNDAMENTALS FOR GROWTH, YOU SAY, ARE GOOD. THANK YOU
FOR JOINING US, AGAIN. WE'VE BEEN SPEAKING WITH ROBERT
GENSLER.
***END OF TRANSCRIPT***
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