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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Allen Benn who wrote (8605)	10/8/2000 11:41:33 PM
From: peter grossman	Read Replies (3) \| Respond to of 10309

Great! Let the fun begin. -Peter

To: Allen Benn who wrote (8605)	10/9/2000 9:39:55 PM
From: Peter Church	Respond to of 10309

>>>I confess that I do know the statistical formulas you alluded to for how to combine multiple random variables.>>> I dug up notes from my college chemistry class on how to combine the errors from random variables: e(x) = the random error of x If x = au + bv and u and v are uncorrelated, Then the error of x: e(x)^2 = (ae(u))^2 + (be(v))^2 (Sort of a Pythagorian Theorem for error propagation) Other standard formulas for multiplication, division, powers, exponentials, etc. can be found in data analysis texts. (eg. P.R.Bevington, "Data Reduction and Error Analysis for the Physical Sciences"). Hope this helps.

To: Allen Benn who wrote (8605)	10/10/2000 2:33:53 PM
From: Peter Church	Respond to of 10309

This from Richard Russell's Dow Theory Letters has some relevance to expectations for WIND's telecommunications business. (Richard is bearish overall) "Astounding figures from Paul Sagawa of Sanford C. Bernstein & Co. The top 15 networking equipment companies in the US have market value of more that $1.1 trillion, equal to 7% of the value of the ENTIRE US equities market! These stocks include Cisco, Lucent, Nortel, Juniper etc. It's another case of funds and banks and insurance companies having piled into what they believe will be the best growth stocks - and you have to have a participation in these NO MATTER what the price. But Mr. Sagawa points out that the giant telecommunication companies, the companies that buy the networking equipment companies' products, are spending too much money on new telecommunications and internet equipment, over $100 billion this year. At the same time, their revenue is growing much more slowly - meaning that they will have to cut back on their rate of buying equipment. That doesn't bode well for the network equipment companies. As for valuation: examples -- Nortel has a market value of $200 billion and sells at 90 times projected profits for this year. Cisco trades at 80 times its projected earnings for the July 2001 fiscal year. Note also that the stocks of the main telecommunications companies have fallen substantially and the stocks of the smaller telecommunications companies have fallen even more drastically. Says Mr. Sagawa, "In particular, we are concerned that companies trading at more than 50 times forward earnings will face considerable pressure in an environment of decelerating earnings." Problem: established telecommunications service providers like AT&T and upstart competitors like Level 3 Communications and Teligent are spending far more on equipment this year than they will make in profits. Over all, the US telecommunications industry had negative cash flow of $20 billion in the first half of the year 2000, on top of negative cash flow of $11 billion in 1999. To make up the difference, the industry has turned to the capital markets, and they've issued tens of billions of dollars in both stock and debt. AT&T alone raised more than $10 billion from investors by selling a piece of its wireless division in April at 26 (AWE is now just over 21)."