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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: David Blocher who wrote (6769)	9/11/2000 8:39:50 PM
From: t2	Respond to of 14638

I think part of NT's problem over the past couple of months has been the high concentration of NT stock in Canadian mutual funds---sometimes over 20%. These funds got this position thanks to the BCE spinoff of its NT holdings. Since April, they have probably been trimming their holdings to numbers below its index weighting on the Toronto Stock Exchange. For actively managed funds that have most of their assets in Canadian stocks (ie Country funds), this concentration was probably just too high. As a result we have an oversupply of stock. I bet most of the supply was absorbed by August. Was it any wonder that the stock did not go up after earnings and in August? I also think the concerned fund managers were out back in April/May while most did it during the June/July/August period. I think the current holders are probably the ones who have more confidence in the company. In addition, at these levels you are going to get reluctant sellers. Many of the Canadian funds will keep a high concentration in NT just so that they don't go far from the TSE index's performance especially if NT rockets a lot higher. It is much more conservative to hold the NT in the same proportion as the TSE index. I think this is one the factors that explains why we had a severe drop. I think this has been at work for months now. That is why it had not rallied on good news. We also have to remember that NT trades more on the NYSE now. Canadian funds won't be able to influence as much anymore. The investor base is increasing outside Canada. I think it is way overdone and we will be off to the races very soon. Now we are probably getting some aggressive short sellers that may not understand what was really happening with this stock. They are going to get hurt, IMHO. I think this is the biggest reason why NT is coming down from a high of about 85 down to 68 instead of 90 to 80 --due to this excess supply that may have been out there. My feeling is that NT is set to soar to new highs very soon! good luck BTW---i think NT reports the last week of October (Oct 23 to Oct 27) based upon past patterns.