Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (7009)	5/20/2001 4:50:51 PM
From: Bill Harmond	Read Replies (3) \| Respond to of 57684

I personally think the energy "crisis" is a side show to the Information age. The California energy debacle is a political crisis, not a purely market-driven one. Demand has not increased in strep with prices. Prices are being manipulated. Natural gas produced in the Gulf at $4 is selling for $13 at the California border, and $5 at the New York border. It costs $6 to find and produce a barrel of crude. $6. Huge new fields are being discovered and developed. There is no natural shortage of supply at the moment. The LA Department of Water and Power doesn't have a shortage of electricity. We're not facing increases. Meanwhile the New Economy is populated by triple-digit growers, and shows no signs of a letup in secular growth. Jack Welch is "digitizing" General Electric as fast as he can. There's a company that understands the energy landscape better than any, and there is no letup in IT spending. I think there are some terrific opportunities in energy-related investments. I oen American Superconductor for example. But to think that the party has moved on from IT now, is like thinking the market for railroad equipment had peaked in 1850. Ciena is a very small player compared to Nortel or Lucent, and is apparently eating their lunch in the latters'fastest-growing markets. The lelecom infrastructure in the US is ancient. It will be upgraded to new-generation networks. Companies like Ciena, ONI, and Sonus are in the sweet spots of this buildout. The Tycom deal alone just added 1,700 basis points to Ciena's growth rate. Coal? I lived through the energy crises of 1974 and 1979. Those were real crises with embargoes and international political implications. This energy "crisis" is a domestic problem with domestic solutions. Oil was selling in the mid-20's three or four years ago. The prices we're seeing now are a shock compared to the levels they sunk to during the oil and gas bubble that occured since then. OPEC is targeting oil prices in the mid 20's. As long as Saudi Arabia remains stable (my only concern) then energy prices will seek levels well within acceptable parameters.