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Technology Stocks : NorthPoint Communications Holdings, Inc. (NPNT)
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To: ayahuasca who wrote (752)1/16/2001 7:03:04 PM
From: matt gray  Read Replies (1) of 786
 
unreasonable gains..gotta like it.

Alot of money has moved out of the CLECs over the last few months. I think we are seeing a major sector
rotation back into the CLECs. A couple of years back people were throwing money at this stuff before the burst of the internet bubble. The bubble was popped and all the analysts were looking at the cash burn rate as a major metric. If junk bonds are back in favor, and capital becomes available a basket of quality CLECs is a good bet.

I was just at the mortgage company and refinanced our house to a 1 1/4% rate reduction threw a car loan into the pot as well as some revolving credit. The loan officer said that the mortage rate is the lowest in her 8 years. So its probably the lowest since the 1960s. She said the rate was tied to government securities which are a safe haven. So it seems that the money is stashed. I'm betting that it won't remain this way for long. Money will start moving towards higher risk as the Fed starts easing. This has a dramatic effect on companies like CLECs which are heavily leveraged were the cost/availability of capital is a first order effect. In the case of NPNT which was pronounced Dead, its like being resurrected from the grave.

Probably wise to spread it around a bit. For pure DCLECs rthm,covd and npnt are still good candidates. If Fetter is able to convince somebody to loan her money then one could expect a run to a previous support level. The next support level above $2 seems to be around $10 but I guess only time will tell.
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