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To: fedhead who wrote (24641)	10/4/2000 7:24:59 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

you said it yourself...<<that there are tons of startups here in silicon valley who are making optical boxes that convert electrical signals to optics with software doing all the IP routing. >> which was my point...it's a promising field, and as such it's getting crowded. regarding valuations, almost ALL the companies in optical and networking ARE already sporting huge valuations...they discount a superbright future for years out. one has to keep in mind that the basis for such huge valuations is a combination of two factors: a) the promise and potential for future earnings streams and b) an extremely loose monetary policy. at the moment we have both...however, the market as a discounting mechanism may be in the process of assigning less future probability to b) continuing. this is due to the fact that the Fed's profligacy has brought about incredible imbalances in the economy, which have been discussed here at length in the past. for the sake of completeness, they are the huge current account deficit, the enormous private sector debt and increasing stress on resources, especially energy. these imbalances can't be expanded indefinitely...and should the market lurch into an obvious bear phase, it won't matter for a while who's winning where and what...huge multiples simply won't be assigned to anything as a matter of course anymore. they never have been, up until recent years and in other certified investment manias of the past.

To: fedhead who wrote (24641)	10/4/2000 11:33:42 PM
From: LLCF	Respond to of 436258

<Cisco recently announced the opening of a new manufacturing plant for its optical components which will staff 2500 people. That speaks of a huge underlying demand for CSCO which is relatively a new entrant in this field. > My opinion on this is that CSCO absolutely MUST get into optical... so they're ramping up and buying people like nuts, and therefore: What else would they say! Oh, demand in our brand new optical sector looks iffy???? Reminds me of the banker that made the loan on Peach Tree Plaza in Atlanta... what do you think he said? "Oh, office leases are weakening? LOL DAK