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To: Randy Ellingson who wrote (7339)	5/31/2001 11:48:58 PM
From: craig crawford	Read Replies (1) \| Respond to of 57684

>> You're obviously right on with your comments on hard drives and memory being perfect examples of products where sales grew but investments were poor, over the past several to many years. The question is, how can one see that coming? << The point is, it's here, so we might as well accept it. Why worry about why anyone didn't see it earlier. >> Are all of the box-, router-, optical-communication-manufacturers likely to remain in trouble from here on out? << Well obviously there is always entrepreneurship and some will succeed against great odds. More importantly, it's easy for some of the smaller ones to show hypergrowth and appear immune to economic weakness. But as their sales start to cross over the $1-2 billion range many of them start experiencing growth pains. They can dodge around the larger stronger competitors with their niche products for a while but eventually if they have to start growing their sales into the billions they will have to start playing with the gorillas. The only problem is they are (were a few days ago) priced as if this difficult transition was a given. Don't get me wrong, companies like CIEN, BRCD, JNPR etc are impressive companies. But it's one thing to have your sales skyrocket to $500 million or $1 billion from a small figure. It's a much different task entirely to go from $1 billion to $5 billion. >> At the same time, you've commented that commodities are the place to be for the coming few years. << Probably more like 5-10 years >> How do you reconcile the poor outlook for "tech" commodities while at the same time saying raw materials companies will experience healthy period of growth? << That's the easiest softball pitch lobbed at me yet. Where has all the money gone the last 10-20 years? (especially the last 5). Has it gone into opening a zinc mine? Have venture capitalists been bringing cotton companies public? Do you know any venture capital firms for sugar plantations? Inventories for many things are the lowest in recorded history yet do you think demand is slowing? Demand is growing. Not just here in the US, but around the world. What happens when supplies dry up and demand stays strong? Remember the 70's? Think of the trillions of dollars around the world funneled into internet start-ups and telecom firms and chip companies. When all those trillions of dollars flow into technology, other things get ignored. You don't have to take my word for it. Look at your gasoline bill. Look at electricity prices. Look at coal prices. Those are going up for one and one reason alone. There isn't enough supply to meet demand. These are just the start. It's going to spread into everything including the food on your breakfast table.