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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: SyncMan who wrote (14696)	5/9/2000 3:34:00 AM
From: John Chen	Respond to of 21876

syncMan,re:"retain ...for years". I also know some got so much cash they retired or feeling goofy at work since what ever they are making is so little. Of course, there is no contradition in your statement and mine. I heard a few people, quit, sold the high-price real-estate and went to retire in Houston/suburb.

To: SyncMan who wrote (14696)	5/9/2000 8:50:00 AM
From: Georgeb	Respond to of 21876

Debt can be like that, it depends entirely on the reason for incurring debt. The analogy to what I am saying about debt is similar to using your margin account to put borrowed money to work. In the current environment, Lucent (and also the others) is resource constrained. Incurring debt to increase capacity/resources in a market that is expanding is a healthy thing. To carry the simple analogies further, if can pay off a new home with cash, that is a mistake. You forgo some very important tax benefits, and use your own money that could be earning more than the interest you would have paid on a mortgage. There is a trade off in the debt ratio, and the optimal ratio depends on current interest rates. If rates are high you want to reduce the ratio, but not to zero. The greater the demand in your market, the bigger you want the ratio, becuase you want to finance as much resources as you can, within the constraints of interest rates. Accuisitions cannot be done indefinitely (so they are not organic, but a temporary growth mechanism). There are just not that many good startups still left in this red hot environment. The price of them has gotten downright silly. Eventually, Cisco, Lucent, and others have to stabilize growth rate without the number of accuisitions that they have been doing.