John, the interview in BARRON'S is even more interesting for what it DOESN'T say. For example, it looks only at domestic, not overseas demand for communications services, thereby conveniently leaving out overseas demands for new technology, whether fiber optic lines or wireless third generation facilities. The article, which conveniently assumes that every company doing business in this sector, whether a manufacturer or service provider, is hamstrung on high debt, conveniently ignores companies like QUALCOMM, with very low debt levels, and Touch America (the new name for Montana Power), a fiber optic network that has emerged from its former electric power roots with no debt.
It is true that as investors recognize the debilitating effects of high debt, especially in a period of temporary oversupply of equipment and services, they tend to look elsewhere to make money. But instead of labeling the whole industry as debt ridden, the two analysts interviewed by BARRON'S might have looked for the exceptions.
The main problem with this article is that it seems to assume that demand for storing, moving, and analyzing information is leveling off. Nothing could be further from the truth. The role of timely information access is only beginning to dawn on investors, companies, and government alike.
Art |
