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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (9674)	10/25/2000 1:45:48 AM
From: Sully-	Respond to of 65232

Just trying to help my friend. Wish I could do more. I appreciate the knowledge you have graciously shared on the porch. FWIW, I am mostly into Mar calls with EXTR. Still have some Dec $80's. I'll sweat them out here unless EXTR breaks down. They will be first to go on any run. Get some rest RR. You got a big day ahead of you. Ö¿Ö Tim

To: RR who wrote (9674)	10/26/2000 7:40:53 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

Some info on the JDSU CC from Judith Williams on the G&K thread...... a good dose of thorazine The JDSU cc provided it. Before highlights, two aspects of the cc struck me. The very evident disgust of JDSU--Josef Straus, Jay Abbe, and Tony Muller--with the recent FUD which had them underscoring from different perspectives the strong growth in the optical sector. Guidance, where JDSU is quite conservative, moved up for the year. Second element was the extent to which the questions at the end attempted to probe for weakness in LU and NT--none of which JDSU would address other than to say its aggregate demand was only capacity constrained and that guidance is based on intense interactions and conversations with its customers, including LU and NT. Thus any downturn in a specific customer, by implication, is rolled into the guidance. Notes on cc: JS: JDSU had a great quarter. Our outlook and guidance for the future and the year is equally strong. I want to address two topics: the industry outlook and our results. Industry outlook: demand is strong for component suppliers. The metro market is now being tapped, the router market is experiencing high growth. Our customer base is diverse and we are shipping higher value-added components. On supply/demand, we are in constant contact with customers. We do not see any inventory buildup beyond what is prudent for supply chain management. Growth will continue and we look forward to the merger with SDLI to give our customers what they want. JA: Sales were 786m, 23% sequential growth--all organic. The telecommunications growth was 26%, well above our high-teens guidance. Active component sales=29% of total; passive, 62%; other 10%, with active sales increasing 113%, and passive 321%. Three 10% customers: NT, Alcatel, LU. 51% gross margin guidance was 50.6% 7.4% r&d expenditure guidance was 8% but off lower sales 11.3% sg&a guidance 11.4% 32.4% operating margin guidance 28-30% 1 billion run rate 29% increase in eps operating cash flow strong JS: new manufacturing and design wins, strong growth in hi-power lasers, 10-giga. modulators limited only by capacity--built new manufacturing facility JA: I will give bottom's up perspective on near term demand; 4x strategy (increasing capacity 4x within 18 months); and integration. demand: 80 sales engineers for each customer in optical systems. Do not see any systemic indication of slackening--in size of order or in stretching out of delivery date. Despite increase in production, no decrease in lead time. Orders are keeping pace with output growth. Q1 over Q4, sales to three 10%ers grew slightly faster than those to other customers, whereas Q4 over Q3 the situation was reversed. Demand remains strong and we are not seeing any meaningful slowdown. 4X expansion: plans are on track for physical expansion, increase in productivity (25% of WDM is now automated), and for outsourcing (Celestica, eg, for optical amplification). Capabilities in three Asian locations--which is cost effective. integration: realigned role of Etek management to present single face to the customer. Passive is now located in San Jose and Ottawa (DWDM components and modules). Expect SDLI merger to close by end of year. Supplying information. No further comment. Guidance for next quarter: high-teens for eps growth sales growth will increase: it was 75%, raised to 90%, but will now be 115% to 120% gross margin: 50% op. margin: 28-30% r&d: 8-9% of sales sga: 11-12% 750m in capital expenditures eps: present guidance 17 cents, move 2 or 3 cents higher year: current consensus 70 cents, move to 80 cents challenge is to expand capacity Questions: UBS Warburg: MEMS product line and which customers growing JS: growing all product lines, full range of customers, some have faster growth, others slower, no customer dominates. Emerging customers are moving forward as well as the established ones. MEMS is in development and testing. JP Morgan: Metro space and relationship with JNPR, CSCO and Sycamore JS: The metro market is starting to move. JNPR and Sycamore are creating "destructive" opportunities and JDSU is being designed in. Expect 40-gig end of next year and it is being moved forward because of customer demand. There is an inflection point in metro and we are getting traction. CIBC: gross margins--are the improvements from skewing to passive or because lower sales to big customers with discount TM: Neither. Improvement due to product mix and gains in productivity. Credit Suisse: passive and active margin trends and the competitive landscape with Alcatel and LU reorganizing. TM: no significant trends in margins with respect to active/passive. JS: we all compete, we will continue to compete SalomonSmithBarney: systems placement and component growth relationship. JA: triple digit growth. Optical segment of systems market growing; merchant segment of components business expanding more rapidly than the captive market. Supply and demand will remain tight for the next several quarters based on our customer's year-long scenarios. First UNION: Thanks for the quarter. We needed it. Why is passive growing faster than active in sales. JA: ETEK acquisition since Etek is entirely passive. JS: product mix also helps with LU--filter amplifiers. H&Q: Which acquisitions are growing faster. JA: All being brought along. OCLI has some nontelecom business that's not so robust. All the telecom business is relatively close to the sequential growth rate. AdamsHarkness&Hill: Thanks for the outlook. Between WDM and Sonet, do you see a Sonet slowdown? And what will the effect be when captive customers spin out? JS: We are a WDM player, our product lines are not relevant on the Sonet side. Captives have been competitors and/or customers--will remain so and we will continue with aggressive development. TM: book to bill is solidly above 1 SG Cowen: great quarter, guys. What about NT citing installation problems. JS: cannot comment on installers. JDSU delivery is strong, but systems installation issues are different from component. DainRauscher: probing LU and NT sloughed off. Interlever. JS: depends on how you build out the metro space. Ottawa and Etek have robust efforts in passive group to optimize this. WittSoundview: Sonet infrastructure as IP infrastructure moves to optical layer. What percentage JDSU responsible for Sonet/DWDM? JS: OC48 sales decline would have no impact whatsoever on JDSU. WRHambrecht: Operating efficiencies. TM: filter manufacturing and within manufacturing production, improvements per employee. Goal is for head count growth to be only 60% of revenue growth. Little shy because of training new employees in Taipei. ABMAmbro: Guidance for LU and NT sales; narrow chanel. JA: NO on LU/NT. We are pushing the AWG area and 25 and 12.5 narrow channel filters. We will be 100% effective in narrow channel, particularly after SDLI merger. EPIC Partner: Metro JS: We are working feverishly on long haul, ultra long haul and metro. Paine Webber: slowdown. JA: It's noise. We have 30 facilities around the world. There will be small variances from 1/4 to 1/4. Last 1/4 we had the boost of Etek. It averages out. UBSWarburg: lead times JA: same as last couple of 1/4s. 50 and 100 gig. amplifiers about 8 weeks. Guidance comes from probing of all customers and includes judgment about demand from LU and NT and is current as of this week not the quarter just past. Message 14670192 Ö¿Ö

To: RR who wrote (9674)	10/26/2000 10:55:40 PM
From: Sully-	Respond to of 65232

The OEX Advantage October 26, 2000 Wednesday was ugly but predictable. In the Tuesday report we suggested that traders were finally abandoning recent winners like Extreme Networks (EXTR), Veritas (VRTS), Applied Microcircuit (AMCC) and JDS Uniphase (JDSU). Make no mistake, these stocks are the best bulls have to offer at this time. They are growing revenues fast and they are bonafide superstocks so what does the fact that traders are willing to surrender such stocks say about the health of the current technology sector? The surprise answer to that question is very little. In every stock market cycle there is a point when traders begin throwing-out those stocks with high valuations in favor of issues that have performed more poorly. Some might think this "downgrading" of portfolios is a bad thing but nothing could be further from the truth. The facts are clear, trees do not grow to the sky nor do stocks rise at parabolic rates for extended periods of time. As money "rotates" from expensive stocks to those that are historically cheap the road is paved for a more sustainable advance. We feel this is now happening for the NASDAQ. There is just one problem, in the very near term it may need to get worse before things get better. The reason for this forecast is the fact that the NASDAQ is now very close to what has become key support at 3,050. Both bulls and bears may have already conceded a test of this level. With that in mind, we feel any early advance will meet with selling. In terms of the OEX our new target is the 704 level. ******************************************************************* ABOUT BEDFORD AND ASSOCIATES RESEARCH GROUP Terrence Bedford began his career in the Financial Services Industry managing investment portfolios for wealthy individuals at a major retail brokerage firm. Mr. Bedford left the financial services industry in 1992 to a boutique research firm. In early 1993 Mr. Bedford established Bedford & Associates Research Group. The firm currently publishes a number of internationally distributed investment advisory services decisionpoint.com Courtesy of John Madarasz on the MDD - Market Direction Discussion thread Ö¿Ö

To: RR who wrote (9674)	10/27/2000 3:41:27 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

BEA Systems Cut to 'Hold' at Jefferies & Co. 10/27/00 11:53:00 AM Source: Bloomberg News URL: cnetinvestor.com Princeton, New Jersey, Oct. 27 (Bloomberg Data) -- BEA Systems Inc. (BEAS US) was downgraded to ''hold'' from ''accumulate'' by analyst Richard Williams at Jefferies & Co Ö¿Ö

To: RR who wrote (9674)	10/27/2000 5:01:30 PM
From: Sully-	Respond to of 65232

Interesting Comparative Chart of JDSU & QCOM over the last two years....... siliconinvestor.com Ö¿Ö Tim@ownoneofthesegorillas/mightmakeit2.com

To: RR who wrote (9674)	10/28/2000 12:56:19 PM
From: lurqer	Read Replies (3) \| Respond to of 65232

Hi RR (et al), Well I'm back from my Upper Rio Grand trip. 'Twaz great. Two weeks ago, in response to a post of mine, you queried Why would you say the capitulation phase has yet to occur? Sorry to be so late in responding, but my brief library "logons" precluded the response your question deserves. Short answer. Not to be too glib, but your still mooing and snorting and there's no mooing and snorting in capitulation. <gg> Longer response. First let's make sure we're "on the same sheet of music". There's capitulation (with a small c) that I'll use to refer to the end of this current (Sept. and Oct.) unpleasantness. And there's Capitulation (with a large C) that "for the sake of this discussion", I'll use to mean the final phase of a bear correction. I could be wrong (frequently am), but I believe we're near or at capitulation for this phase. My basis for this is my reading of sentiment indicators (put/call, VIX, Rydex, etc.) and my sense of the exhaustion and frustration of the bulls. Earlier this month, I warned of a larger than usual tax loss fund selling this year. Well that's over (remember with settlement times factored in, most of the selling had to be completed yesterday). There's money on the sidelines and we have our necessary "wall of worry" for a sustainable (in the short run) advance. So barring an "exogeneous event" such as an international catastrophe or a domestic political disaster (remember the election), I believe we'll see a rally. In fact my most serious qualm wrt to an upcoming rally is too many others also see one coming. So much for the small c, now the big C. As I mentioned in my post Message 14395881 I currently believe we're in the second phase of a bear correction. So to answer your question, bear corrections usually don't end until there is Capitulation. Now anything (or almost anything) is possible, and maybe this particular bear will "end with a whimper, not a bang", but I have me doubts. So with a little side glance at history let's consider what might precipitate the finally (Capitulation with a big C) phase of the correction. In a few months we may (note may not will, I never know for sure) be entering into a recession. If the perception (not the reality, just the perception) is that the fed cannot help out because of inflation "leaking" into the core measures, then this will compound the gloom. I have only recently returned home and am not "plugged in" yet. However I did come across this post from last weekend Message 14635605 Pay particular attention to the comments of Bill Gross (the PIMCO guy). Now no one bats a 1000, but it has has been my experience that when Bill talks, one should listen. If he says "I lean toward a hard landing" for the U.S. economy, says William Gross, of Pacific Investment Management Co., the bond heavyweight. then the possibility of a "hard landing" and all that that implies should be considered. On of the principal implications is what would be the effect of a recession on the U.S. dollar (down most likely) and what effect that would have on foreign investment (out most likely). We'll know when we're in Capitulation not only because the averages will be down but also the sentiment measures will be at record extremes. Now I don't expect you to go any further than neutral; everything is relative. <gg> Now the prickly question of when arises. I don't have any good handle on that. Could be as early as December, but I doubt it. Current "best guess" is first half of '01. As I'm sure you know, all of this is "blue sky" and is to be taken on a FWIW basis. I offer it only as a cautionary note in the belief that those that are prepared can turn an apparent disaster into a springboard to success. Remember the quote that Volt is fond of regarding "a tide in the affairs of men". Also, last I checked Volt was warning about a drop after the first of the year. "Time will tell". ,___, (°v°) ( ^ ) ¯¯¯"¯"¯¯¯ the lurqer