landisman, this is how I see the whole bear market thing.
First we have the cycle of expansion and the debt to fund it, to work its way through the system. Apparently a huge amount of overhanging leverage, is what the telecoms are dealing with. How ever as in the case of WCOM, we have seen companies willing to take drastict step to reallocate resources, to keep the focus on their high growth, high tech end of the business. I.E. WCOM dumping MCI their slow growing, old tech, long distance voice business.
Next we have the large, past tech leaders, Intel, Microsoft,and Apple all acting like dead in the water NYX stocks, when the NAS was moving up yesterday. This makes sense. These companies are in varying degrees of being out of phase with the key areas of the global upgrade, build out, connection to and use there of, of the technology for the 21 century. So here we see some of the resulting pain caused by this new 21 century disruptive technology, to past tech leaders, while they try to find their way into the future. However the problems of past tech leaders, does not mean a bear market for the co.s that are leading the current wave of technology upgrade and innovation.
Next we have the overvaluation thing in the co.s for the 21 century category. We have had a healthy correction in this area, but from a traditional prospective of valuation, I can still see, where some see the need for more valuation correcting in here. However I am not sure if the more value oriented camp, is always taking seriously the x factor, in the size of the global growth, for some of these 21 century tech co.s. Anyway this will all be put to rest when we see revenues and earnings for the first and second quarters. The amount of earnings and the level of growth will set the tone for future valuations. Personally I am glad this valuation adjustment happend sooner than later. We could have had a real mess if Bush had gotten in right away, and started throwing easy money, kerosene on the high tech over valuation growth fire.
Knowing that this global tech upgrade is significant, sustainable and ongoing, I have a biforcated view of the bear market label. I prefer to sum the whole thing up to a global technology, transition, adjustment period. The high tech systems, upgrade, process, created bear markets in sectors that have little growth by comparison. Investment capital, was moved to these high tech growth areas.
This global high tech infrastructure upgade is not over, its just catching its breath. This is a long distance marathon. We are still in the first few miles.
In my mind, until forward earnings and growth rates turn down for Avanex, I won't consider it in the bear market that other slow growers, or slowing down growers are going through.
I can weather this catching your breath, valuation adjustment period. What I need to keep following up on is the learning curve thing, of getting more familiar with, the strength of Avanex's technology story, and how it measures up with whats happening else where in the industry. I have done my best, to run as far as I could with what I am up to speed with. I countered some views and supported other views, where I could. Now it is time to follow through on getting beat up on the high tech nerd boards, where I really don't belong. Maybe I can make a friend in Spok land, and get that person to explain to my brain, what my intuition thinks its on to. |
