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To: bonnuss_in_austin who wrote (7147)	7/29/2000 4:01:31 PM
From: patron_anejo_por_favor	Respond to of 436258

Bonnuss in austin: Since you seem to have "come in peace" (to quote Clappy or Venkie, I forget which), I'll answer the questions in the spirit they were asked: 1)RMBS--problem here is I really don't understand their business model. Are they trying to make all of their income from DRAM or SDRAM royalties from other cos that actually produce the stuff. If so, my concern is I don't understand the legalities of the issue enough to know the business well enough to make an informed decision. I try to trade only when I have an edge, rather than passing stocks around like so many "corporate baseball cards". Moreover, RMBS is a notoriously volatile critter, and I like rides that are a little smoother. In brief, although I am highly dubious that they will amount to much, I avoid them (long, short and options). 2)JDSU/SDLI--I sincerely believe these are extremely strong companies with a bright (pun intended) future. Valuations are a problem though. The market cap of the combined companies is now 115 BILLION dollars. Trailing sales are in the area of 1.7 BILLION dollars. Thus, you have a price/sales (not P/E) of 68. Additionally, a lot of the valuation awarded JDSU in the winter (when I was an enthusiastic holder of the stock) was based on it being in a near monopoly regarding manufacture of fiberoptic components. It is clear that is no longer the case, even with the ETEK and SDLI acquisitions (and its not clear that the latter will survive antitrust scrutiny); GLW, NT, SCMR, BKHM and many others are going to be active competitors. Moreover the SDLI acquisition will leave a question mark over the stock that will impair its performance for the next 6 months (much like ETEK did). I will continue to follow their progress, but I would not invest here long or short, unless we get a rather massive correction in the stock price (my target would be the $55-60/sh range or so. August or Sept. puts are probably reasonable, but since I personally like the company and its management, I'd rather short/put something else for now. Incidentally, Luc's suggestion regarding T-Bills was not in jest. It is very easy in this environment for even the most savvy and nimble traders to get whipsawed and lose money. I personally have the vast majority (75%+) of my liquid assets in money markets and TBills, where they will stay untill the correction/crash is over. The trades I'm making are really for "beer money" at this point. All my very humble opinion only. Good luck.