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Technology Stocks : Oclaro, Inc. (Avanex-Bookham) -- Ignore unavailable to you. Want to Upgrade?

To: Techplayer who wrote (970)	11/15/2000 4:06:38 PM
From: Shaw	Read Replies (1) \| Respond to of 2293

Avnx, bucking the trend, and is looking to close up for the day, what we want to see, as other optical equipment co.s and related network equipment co.s, are not closing in the positive. I realize one shouldn't make too much of this, as Avnx is playing catch up with other optical equipment and related co.s, that had good upside moves yesterday. However it is still nice to see, and has to be seen as some level of confirmation, on the long side, for the story, that is out there in the stock.

To: Techplayer who wrote (970)	11/15/2000 4:30:29 PM
From: Raymond Duray	Read Replies (2) \| Respond to of 2293

Hi tp, I've followed your posts for quite a long time and I've developed a high degree of confidence that you see the world as it is. I won't dispute anything that you say regarding SCMR or CSCO, but I will say that there are storm clouds on the horizon and I'm hoping to come across as being cautious and not petulant about what I sense out there. A very interesting comment was made about 2 weeks ago by Jim Cramer at theStreet.com. Not a favored commentator of many, but he said something that really hit home with me. It was in the context of discussing guidance from JDSU regarding the prospects for 2001. He said that the situation reminded him of the tipping point in hard disk drive suppliers in 1983, when a company called Komag projected exceptional growth going forward, only to be blindsided by the over-supply that was being built into the system as far too many competitors entered the field. Much like we are witnessing today in the fiber optic component sector. Keep in mind that JDSU is the dominant player on the field and they are projecting a four fold increase in manufacturing capacity within a year. This must have an impact on profitability. Econ 101 does not work any other way. We are headed for oversupply of FO components. Anyone arguing otherwise is simply not paying attention. Profitability craters, and as I pointed out last Saturday, this industry in aggregate already is a loser, to the tune of $2 Billion last year. Eventually, even the diehards realize that you can't keep putting faith in the equities of an industry that has a supply imbalance. I know this seems heretical, and almost ludicrous in view of the projections of SCMR and CSCO, but if you step back and look at this thing in the big picture, we are about at a saturation point on the Internet where almost everyone who is literate, intelligent, wealthy and inclined to has already gotten a straw into the Internet pie. Of course there are billions of folks who aren't there yet. But you don't get a single viable Internet customer from the 3 billion individuals who are surviving on less than $2 per day. So, I see end demand slowing from here. Others will disagree. I'm just trying to do some big picture work, and it seems that we are on the tail end of the Internet bubble. Best, Ray

To: Techplayer who wrote (970)	11/15/2000 6:20:53 PM
From: neverenough	Respond to of 2293

Who Do You Trust? For those of you who remember the mid 50's CBS game show hosted by Edgar Bergen..... And now....it's time to play.....Who do you trust? Two articles published today paint diametrically opposed views on the optical networking industry for the year 2001 and beyond. Dale Baker presents a rosy picture for the future, noting that "no other sector in technology will grow like optical communications in the next twelve months." He quotes studies on optical networking capital expenditure spending projections, and notes how optical networking spending this year has already far exceeded the most optimistic projections made this time last year. In the other corner, we have Paul Sagawa of Sanford Bernstein, and more recently (today), Susan Kalla , of New York's BlueStone Capital Partners. Ms. Kalla is predicting "an enormous market shakeout looming for companies such as JDS Uniphase by early 2001." She goes on to add, in a 26 page report, that "Telecommunications carriers don't buy unless they can achieve a greater than 50-per-cent cost benefit or they have to upgrade to compete. So, without new competition, you enter a status quo period where the players don't have to do anything." She added that the slowdown period may last until 2004, and that by the first quarter of next year "it will be obvious, and it will by ugly". Let's assume for the sake of argument that Mr. Sagawa and Ms. Kalla are correct. Let's also consider the fact that the CEO's of Cisco, Corning, JDSU, SDLI, Avanex, Sycamore Networks, and Applied Microcircuits are all saying that business is booming and will continue to boom for years to come in the optical networking business. In order for Mr. Sagawa and Ms. Kalla to be correct, all seven of these CEO's must all be wrong. That's an indisputable conclusion. And if these CEO's are wrong, then they are all making major mistakes by investing to increase capacity and by leading with strong guidance for the coming year. Also indisputable. But assuming that Mr. Sagawa and Ms. Kalla are correct, there are but three possible explanations for how these seven CEO's can be wrong: Mr. Sagawa and Ms. Kalla have access to more and / or better forecast data than the CEO's of these seven companies. Sorry, I reject that notion entirely. If Mr. Sagawa and Ms. Kalla were really that good, they would be in charge of forecasting at two of these seven companies. The CEO's of Cisco et al are all blind to what is happening in the real world. In this scenario, everyone has access to the same data, but Mr. Sagawa and Ms. Kalla are interpreting the data correctly and the seven CEO's are, for whatever reason, interpreting it incorrectly. Indeed, the day after John Chambers raised earnings and revenue estimates for 2001, Mr. Sagawa said that Cisco was "putting on a brave face" and Cisco's earnings growth would decelerate. Well, Mr. Sagawa is correct, then he should probably replace John Chambers as CEO of Cisco because he obviously understands Cisco's business better than Mr. Chambers.. The CEO's all know that a major slowdown is coming, and they are all conspiring to pump of the stock prices of their respective companies so that they can engage in heavy insider selling at inflated prices. This explanation doesn't wash with me either -- stockholders would file class action suits that would put these companies out of business if this were the case. So out of three possible explanations, one is possible, and for that to be true we would have to believe that Mr. Sagawa and Ms. Kalla are more credible predictors of the future than the CEO's of seven major corporations. Speaking only for myself, I'm not buying that. Fortunately, we don't have to base our decision entirely on "Who do you trust?". Book to bill ratios in all of these companies is greater than 1, and several of these CEO's have guided revenues and earnings estimates higher for 2001. And all of these companies are aggressively increasing capacity to keep up with what they describe as exponentially growing demand. In determining who to trust, I for one look for patterns. If I were getting mixed messages from these CEO's -- if some said that business was booming, and others were using slightly more cautionary language, I would be well on the way to believing Mr. Sagawa and Ms. Kalla. But I think it would be unlikely for all seven CEO's to get blindsided by a slowdown in optical networking growth. For this to happen, all seven CEO's would have to be, well, incredibly stupid or blind. And I just don't think that's the case. community.metamarkets.com