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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (1187)	12/4/2000 3:59:29 AM
From: brightlake2	Read Replies (1) \| Respond to of 74559

Do we have too much bandwidth? This thread is very interesting to read. I found that it is very interesting that now everybody (momentun trader, analyst) is predicting that there is too much bandwidth. Six month ago, everything is opposite. I for one do not believe there is too much bandwidth. I found the bandwidth to be to expensive (hence not enough) or often time unaccessible (If you want a particular international program at a reasonable cost, say at the cost of renting a movie). The bottom line about bandwidth is whether you believe in globalization. If you do, then there is real chance to make real money over the long run (5-10 years). You would not believe how slow the internet is in less developed country, which have more than 80% of world's population. For them, the bandwidth is not affordable yet. As an example, the standard bandwidth is 19.8 K in a big city in Spain and about 2K in a remote village. Most young people do not know what DSL is because it is so rare is the home. Spain is not a poor country. Therefore, the bandwidth has to be much less costly before there is going to be an explosion in use. Remember the effect of sub $1000 pc on the demand? There is not a person on this thread or an analyst who have stated that the optical technology will make the bandwidth more expensive. All of them agree that the bandwidth will become cheaper as the optical technology is implemented. It is possible that some telecom companies and service providers will go belly up if they cannot adjust their cost structures, too bad. Some equipment companies will suffer the same fate, my condolence. On the other hand, I found the notion that there is too much bandwidth to be untrue. If the rule of cost decrease stays at about 50% or more per year, you will have to pay for only $10-$15/month for a DSL (or an equivalent high speed) connection in 2-3 years. I will pay for that over a phone line connection, would you? At that rate, another 10% of world's population may be able to use DSL in 10 years, which is probably tens of thousands of times more than the number of people who use DSL now. Could you imagine how much bandwidth we will need? If the US remain the center of content creation, which it should be able to do as the world's biggest exporter of ideas and entertainment products, how much bandwidth will that consume? Therefore, people who bet too much bandwidth is useless will have the same fate as people who said the pc is a personal toy with no real business use. They will miss the best chance to make money in a life time. Having stated that, I am against aggresive use of margin. It is gambling not investing. I also believe that some of the optical companies may be overvalued but their value is much more reasonable than 1 year ago. JDSU's valuation has decreased 1.5 times because its earning and revenue has grown so much. If it is still overvalued now, it would not be for much longer. If you are not a professional, do not trade like one. Momentum trading make you money only in the short run and makes you lost money in the long run. Ask people who tried. You can lose more than your invested money in shorting a stock. Look out! BL