Ian, I remain very interested in the fiber optic companies and the questions regarding the rate of data traffic growth and the future demand for fiber. I have posted several articles on this issue, and you have posted many more I think.
I am wondering if the great confusion on these questions right now could mean that big opportunity is at hand. We could be at at time when overall market pessimism is combining with very depressed prices for some of these bandwidth related stocks. If anybody knows the answers to these questions, or has thoughts on this, please let me know. I am just guessing really, but I think the bullish argument here has some merit. For one thing, I just can't believe that the consumer is not going to pay for bandwidth, given all the other high-priced non-essentials that are consumed in the USA today (e.g. Starbucks coffee, expensive gas-guzzling cars, and oversized homes). A good part of this "last mile" problem is political. I think the demand is, or will be there when it is available (people who don't want it now will want it later when movies, etc. are available over the internet). I am not too optimistic about the political situation right now (IMHO Gore would be much better than Bush - hope I am wrong about this), but I think capitalism will prevail, and high speed web access for the masses will arrive. The fact that high-bandwidth wireless is on the horizon will certainly help make it happen.
It is truly incredible that many of these stocks (e.g. GLW) are at about 1/10 the level they were at last fall. I am not going to try to provide a numerical argument that some of these stocks are buys here - that didn't work before (i.e. all the analysts who were bullish on these stocks last September), so why should it now? Since the fundamentals to any quantitative analysis are in so much question right now (e.g. data traffic doubling every year (or even flat) vs. going up 4 times each year), I think one can come up with just about any answer they want. When the answers to these questions all become clear, I think whatever opportunity there is will mostly be gone. Also, I like the idea of going against the herd on some of these quality companies that should survive any downturn.
FWIW, I just added to my GLW position on Friday at around $12/share. I don't know how low it will go, but right now I plan to buy more if it goes lower.
Best wishes to all,
John |
