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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Apollo who wrote (10178)	11/12/1999 10:58:00 AM
From: Apollo	Respond to of 54805

Mr. Fun's comments on Lu & Nortel's anaylysts' meetings this week.......could NT be in for some trouble? To: matt dillabough who wrote (11055) From: Mr.Fun Thursday, Nov 11 1999 9:26PM ET Respond to Post # 11057 of 11073 I was at the meeting today and at the NT meeting yesterday. NT has an IR problem on their hands - the buzz at LU today was that NT had given guidance for 100%YoY growth in their optical business and that that such growth suggested a overall topline growth close to 30%. This is, of course, not NT's actual guidance which was for 60% growth in optical (a number given only to those who asked after the session was over) and 20-21% growth overall. It has two effects. First, when NT reports next quarter, and delivers 20-21% sales growth and beats by a penny, the stock will get hammered, as the big reason it has a 62x multiple of 2000 earnings is because people think great things are possible. Look for alot of confusion here, which is too bad, because we've made alot of good money on NT. We are going to get out. LU gave a show that was jammed packed with info - in contrast with NT's almost content free presentation. It will take a while for everyone to digest the material, but the upshot will be good. There is still a little December quarter grumbling going on which could dog the stock alittle until Jan, but I still think we'll see 80 soon.

To: Apollo who wrote (10178)	11/12/1999 11:46:00 AM
From: mariner	Respond to of 54805

Stan I like Mr. Jubak, I think he often provides quite interesting analysis. I have no problem with his decision to buy SDLI. They're an excellent company in their own right. And, I don't disagree that there is some risk with JDSU at current prices. But Underlying demand for optical bandwidth enhancement is huge and growing rapidly going forward. Yes, JDSU has an execution risk given its rapid growth rate. Like many commentators, he ignores the talent brought by the previous JDS Fitel, where they've been successfully managing 100% y on y growth for sometime now. He doesn't mention that JDSU's management team has the CEO focussed on dealmaking and strategic vision while the COO (Strauss from JDS Fitel) handles the day to day production/operations work. I think the latter individual brings real strength to the stock, and he has an exceptionally strong proven track record for managing such growth levels. (Note that JDSU's growth rate is up substantially from that of UNPH prior to the merger). Finally, the most recent acquisition,(Optical Coatings), while expensive, has been working with JDSU for several years already, so I think the execution risk may be somewhat less than meets the eye. If they don't deliver stellar growth they will get pounded, of that there can be no doubt. I suppose one could say the same for the Q at current levels. While I recognize JDSU is not a gorilla, I think Mr. Jubak underestimates the synergies this merger has created, both from the perspective of management strength and in their ability to create one stop optical component/module shopping for high growth customers like LU/NT.

To: Apollo who wrote (10178)	11/12/1999 3:19:00 PM
From: DownSouth	Respond to of 54805

Thanks for the Jubak post Stan. I will stick w/JDSU. Is Q really going to hit 400 today??????!?!?!?!?! Never would have guessed.

To: Apollo who wrote (10178)	11/13/1999 12:13:00 AM
From: tekboy	Respond to of 54805

Re Jubak on JDSU, SDLI Apollo, a few points. 1. Jubak is generally not bad, but he's also not entirely dependable because he flits in an out of things and doesn't always follow a consistent logic (as we try to do here). 2. As for his characterization of JDSU's strategy of dominating the market in its sector, he is correct. He is also correct that this has involved, and will continue to involve, lots of acquisitions. 3. His point that such a strategy carries risks, both because the acquisitions might not be digested easily and because fine execution is required going ahead in such a rapid-growth move, is also correct. BUT--IMO it is not a reason to avoid JDSU, because the track record is good (the main merger, between Uniphase and JDS-Fitel, appears to have gone off amazingly smoothly) and Kalkhoven and Strauss (U and JDS leaders, respectively) have provided excellent leadership. The stuff Jubak is worried about is merely, again IMO, one more reason--in addition to its royal status--that the stock should be held lightly rather than gripped tight in our greedy little hands like that of a real gorilla. 4. Moreover, the potential reward for the strategy is so outstanding that it might merit some significant degree of risk. I mean, there are some who feel that if JDSU can actually execute this strategy properly they may achieve near-de-facto-gorilla status, simply because they will have a lock on such a high proportion of the world's technical expertise in their particular area. 5. SDLI, finally, is an excellent company that does indeed have fine prospects. It is a competitor of JDSU's, but is much smaller and specializes in a narrow product niche rather than the whole spectrum of opto-electronic components. It is almost certainly going to be an excellent short, medium, and longterm investment for its shareholders, because the whole sector is exploding upwards in a tornado. But JDSU is the clear king here, and so GGers should prefer it on that basis. tekboy/Ares@BWTFDIK.com PS I note that indepedently Mariner gave an almost identical answer; good sign.

To: Apollo who wrote (10178)	11/13/1999 8:07:00 AM
From: DlphcOracl	Read Replies (2) \| Respond to of 54805

Stan: Jim Jubak is a horse's ass. He reminds me a bit of Alan Abelson, the moron who writes for Barron's. Abelson is the perpetual bear who has been crying that " the stock market sky is falling" for the last five years. His columns are well-written, entertaining, and totally (and consistently) wrong. Jim Jubak is a great example of someone who is too smart for his own good -- he overanalyzes everyhing to the most minute detail and misses the big picture. His ability to buy and sell his stock picks at precisely the wrong time is uncanny and, for me, he is a good contrarian indicator. This is the guy that said AOL would fall to 50 when it first dipped below 100 because of the free-ISP movement in Europe. To specifically address his points regarding JDSU and SDLI: SDLI is rapidly becoming relegated to a niche player, which will greatly limit its upside potential. JDSU's aggressive strategy will make it the Intel of the optical telecom space. More important, in acquiring all these companies, JDSU is swallowing up the very small pool of physicists and electrical engineers with laser/optical expertise. THIS is what makes JDSU such a compelling buy -- the enormously high barrier to entry has less to do with money than the lack of available talent in the field. In short, stick with your instincts and buy the leader. Both will be profitable, but JDSU will be more so.