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To: Dale Baker who wrote (22158)	10/26/2000 7:38:56 AM
From: Dale Baker	Read Replies (2) \| Respond to of 118717

A rational perspective on NT: "Let's calm down here for a second. Make no mistake about it, Nortel is no Lucent Technologies Inc. (NYSE: LU) , and John Roth is no Rich McGinn. There was evidence on the call that Nortel may have mismanaged growth, but this is still a company that by all measures leads the emerging optical field. And Nortel's optical braintrust, Don Smith, president of optical Internet, and Greg Mumford, president of optical networks (see The Top Ten Movers and Shakers in Optical Networking ), have a coherent plan for next-generation optical technolgies such as 40-Gbit/s systems and optical switching technology, unlike Lucent's technology development experts, who have been asleep at the wheel. There are also concerns about valuation in the larger optical market at work here, but Nortel seems less susceptible to such concerns when compared with high-multiple companies like JDS Uniphase Inc. (Nasdaq: JDSU). Surely, the optical market has gotten ahead of itself, but long-term growth is still intact. Let's do some quick back-of-the-envelope math on two telecommunications Goliaths, Lucent and Nortel. Working backwards in quarterly revenue numbers, Nortel has reported $7.3 billion (Q3 2000), $7.821 billion (Q2), $6.32 billion (Q1), $6.99 billion (Q4 1999), $5.39 billion (Q3 1999), and $5.4 billion (Q2 1999) quarters. Thus, top-line growth has indeed been substantial, but lumpy. In fact, there were several quarters in which Nortel's sequential growth was either flat or down: from Q2 to Q3 this year, from Q4 of 1999 to Q1 of 2000, and from Q2 to Q3 of 1999. But the overall picture is of rapid annual growth -- significant for a company that will do $30 billion in business this year. And profits have steadily grown when you exclude one-time charges such as acquisitions. The market capitalization of Nortel stands at $140 billion, as of Wednesday midday. Now, let's look at Lucent. Recent quarterly revenues: $9.4 billion (Q3 2000), $8.71 billion (Q2), $10.25 (Q1), $9.9 billion (Q4 1999), $10.57 billion (Q3 1999). (It should be noted that Avaya's revenues were removed following Q1.) Growth has been flat -- in decline, even. But more importantly, profits have declined, and Lucent's technology initiatives have no sway in the industry. The company is doing a little under $40 billion in business, but that busines is eroding. The market capitalization, as of Wednesday, was $69 billion, reflecting the recent collapse of the stock. This is always a tricky time of year in the telecommunications industry. You are dealing with the end-of-the year bookkeeping and next year's planning. Large mutual funds are tidying up their returns. But you have to survey the entire market landscape and wonder if Nortel's business is as bad as the ticker tape indicated on Wednesday. This was probably large fund managers slicing off large chunks of long-term profits on Nortel, a stock that's had a phenomenal run over the last year. But is the company on the edge of collapse? Most evidence says no. -- R. Scott Raynovich, executive editor, Light Reading lightreading.com

To: Dale Baker who wrote (22158)	10/26/2000 12:26:12 PM
From: excardog	Read Replies (1) \| Respond to of 118717

Dale Sorry it so long to respond looks as if your a night owl. As far as upward movement in the energies if the pattern of last quarters earnings reporting is any indication one would expect things to start moving come November. The stocks were very weak in July 00 but made several new highs in August. They seem to be trading at this point in time the same way. I believe you have a driller in your stable and I'm of the opinion going forward that you made want to shift some of your energies more heavily towards that sector. The grim reality is that demand seems to be out stripping supply and logic would dictate more drilling going forward. The major oils have yet to raise their budgets but there could be a mad rush to spend soon. They appear to be awash in cash at this time but have been slow to open the purse strings. Another interesting play in this area is GRP. Throughout the weakness in the OSX index this stock seems to have held on relatively well. They are involved pipe and other supplies for the drill bit. Year over year earnings expectations are much higher. It also has a large institutional following I believe. Hope all is well.