George, [a bit of devil's advocacy to stimulate the grey cells...]
I generally share your vision of the future as deliniated in Telecosm.
However, I strongly disagree with what appears to me a naive approach to picking stocks based on ascendant technologies. The bleeding edge of technology is ever sharp and ever changing. Many other factors beside technological prowess are necessary for the success of a corporation. Wouldn't even a short reading of American railroad history suggest that there will be a very short list of winners in the race to build the big optical pipe of the future, and that most of these exciting companies will probably go belly-up amid vicious price wars and capacity excesses? I mean, I just can't discern a significant difference in the business plans between WCOM, LVLT, QWST, or their smaller CLEC cousins. They all seem to have been pumped up by cheap capital, booming stock and data markets, and a regulatory regime that has helped to stifle competition from the incumbent telecom providers. But I smell a change in busines climate in the wind. This is a classic high fixed-cost, miniscule marginal-cost industry, meaning that companies should be willing to cut price savagely to get the loads on their systems sufficient to meet their debt service needs. Everyone has assumed that "if they build it, they (customers) will come." Practically anyone with telecom management experience has been able to get generous Wall Street financing to build "the telecom company of the future".
How long can this telecom-mania continue, especially if there is some panic on the street?
Sam |
