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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Bruce Brown who wrote (34148)	11/1/2000 10:21:39 AM
From: Judith Williams	Respond to of 54805

Bruce-- It's not just the lousy track record of both telcos and analysts in predicting capex. It's the trends that those gross predictions mask. The Fat Pipes are alive and well and getting fatter. While capex, in the aggregate, may see a decrease in the incease (to 21%), optical gear demand, RHK predicts, will see 36%. To borrow a political chestnut, T ain't no Qwest, and WCOM ain't no Level Three. Judith

To: Bruce Brown who wrote (34148)	11/1/2000 12:19:50 PM
From: shuebert	Respond to of 54805

Actually, I found several interesting articles on demand related to Broadband and fiber in this posted newsletter. (It also gives instructions on subscribing, which I now plan to do, as it is directed toward long term investors and appears to be a great source for summaries on the market and market share which can be so hard to find.) I recommend following all the links. community.metamarkets.com I particularly liked reading the article on RHK’s newly released (10-30-2000) global capital expenditure study which includes the graphs, pie charts, etc. As Alan Luber wrote, this study is particularly impressive because:“Unlike most numbers that I see thrown out there, this survey actually explains where the numbers came from. "RHK's global capital expenditure study rests on a strong foundation of one-on-one interviews with over 50 Asian, 70 European, and numerous North American service providers throughout the year. Many hundreds of interviews with system vendors and component vendors, along with reviews of many outside sources also contributed to the creation of the global forecast."” I felt the articles collectively build a strong case for Nortel as an investment at these prices, given that DWDM is expected to grow at at least 50%CAGR for several years and Nortel is quickly expanding it’s dominance in that area. I think that Nortel is the King of this area. (Unfortunately I don’t own any Nortel.) I generally prefer to look for gorilla candidates. Hm---I wonder which gorilla candidates would benefit most by the growth in DWDM?-- perhaps Avanex, Ciena, Sycamore, or ONIS? I was also somewhat surprised to see this a.m. that Nortel prices were still falling-- 44 or so last I looked. The article which reports that several value fund managers would be interested in the stock if it sold “in the high forties or low fifties” was quite interesting. How often does one see a high tech company dominating a market with 50% expected CAGR for several years selling for prices that value fund managers find attractive? There is also an article on the critical demand for fiber that leads me to be very optimistic about companies like GLW. I am by nature an optimist, but I really feel many of these stocks have been unduly beaten down by the bear market and all the FUD. It is nice to see some articles trying to address that. I have no actual spare cash now to add to my investments (in my pretend account I added Nortel and Rambus this morning), but I am still quite optimistic about my beaten down broadband stocks coming back when we get through our market’s current depressive episode. Susan@thismarketneedsrationalemotivetherapy.com