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

To: LindyBill who wrote (31314)	9/9/2000 12:55:09 PM
From: saukriver	Read Replies (1) \| Respond to of 54805

JDSU It is up 43% this year . . . . And EMC is up 76%, NTAP is up 173%, Sun is up 56%. So, JDSU is the worst performing king in the G&K portfolio this year. Most of the runup in JDSU occurred in Feb's explosive upswing. It then fell and has retraced to where it was in April. Most of the runup in Jan.-Feb. can be seen as a continuation of the huge upswing in 1999. SDLI is selling at a 17% discount to the merger ratio right now, and I have 20% of my portfolio in it. SDLI is doing so well on its own that I am not afraid of the downside risk if the merger falls though Good strategy for you. But you have proven time and again that you are willing to take on very gutty risk. You are looking at a built-in 17% upside if the SDLI merges with JDSU, with a downside the you get "stuck" holding SDLI. Very good strategy because many of us would like to be stuck with SDLI, just at lower percentages that you are willing to hold. as a major King in supplying components to the fiber/optical business, I expect very good news for the next several years. Agreed on optical. I am not selling JDSU, just holding it more lightly than you. I remain concerned that there are many fiber-optic companies with breathtaking valuations and no earnings: BRW, AVNX, AVCI, CORV, BKHM. If the Street sours on the sector, rest assured that we will see a downdraft that will affect all fiber light cos., including JDSU. This would be similar to the Street cooling on wireless this year that indiscriminately trashes the good (QCOM) with the bad (T, AWE, NOK, etc.) But, we digress. The point of my query was what people think about JDSU as a long-term hold. (I consider long-term more than the next several years.) To what extent do fiber optic backbones get built out (particularly, at the WAN level) to the size that makes commercial sense and then JDSU's growth tails off because it sold good, reliable products during the buildout? saukriver