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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn McDougall who wrote (12513)	9/6/2000 11:12:43 PM
From: pat mudge	Read Replies (1) \| Respond to of 24042

According to the Lehman report, the telecom-services industry next year will spend one dollar on capital equipment for every two dollars it generates in revenue. That marks a dramatic increase from 1996's 1:5 ratio, and this year's 1:3. While at first blush this rising tide of spending seems like good news for the equipment sector, Bath calls the 1:2 ratio unsustainable. With competitive pressures rising and long-distance revenue dropping, big-spending telecom companies such as WorldCom, AT&T (T:NYSE - news) and Sprint (FON:NYSE - news) inevitably will have to cut back on capital spending. Those decisions are likely to undercut the heretofore insatiable demand for telecom-networking gear, punishing the stocks that have benefited from that demand. Well, increased growth may be tough on the carriers but it sure as heck is good for vendors. Lehman's Blake Bath is saying the 1:2 ratio of spending to revenue is for 2001, so to find the point of unsustainability he's going out even further to, what, 2002? How can he see that far ahead? Pat