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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (48344)	6/22/2001 1:58:20 AM
From: John Trader	Respond to of 70976

OT-GLW ST, That is a good idea, I wish I had the time for it right now, probably tricky to do a good job with that also. Some guys on the Yahoo board were arguing that the non-telecom GLW businesses alone are worth about $13/share. Also analysts are projecting 25% earnings growth for GLW over the next 5 years - if that is true, then what is the problem?, the forward PE is 17 right now. I think the big question is future demand for fiber, which may or may not be fairly priced into the Lucent bids. If the GLW CEO is right that it takes a "couple" of years for the long haul market to pick up, and the overseas orders keep going well, and metro demand continues, then GLW could possibly be a great buy now. One other factor on the Lucent plant, I heard GLW has some patent rights that may not be transferable to the new owner, not sure, but seems possible. The future of GLW is also a function of how good their product is relative to competitors, and how much other production capacity there is in the world. I think one would need to be almost an expert in this field to make a good judgement about it. If per the CEO the internet traffic doubles every year, that should be a plus. I don't recall so much confusion on a basic area of technology like this before. On the one hand there is this misleading statement about all the world's traffic theoretically being able to go down one strand of fiber (probably a gazillion different wavelengths, or colors, used, and I assume just a theoretical statement), and on the other hand the argument that the long haul networks will need more fiber in just a couple of years. Go figure, this is clear as mud to me. Also, I heard the new Corning fiber requires lasers that are only 1/2 the cost, and understand that the big cost is lighting fiber, not the fiber itself. So maybe if this trend continues, a lot of dark fiber will stay dark. This area is way beyond my area of expertise, but surely there must be people out there who understand this. I would not necessarily assume that the analysts understand it. People at Corning should, at least in theory. The fact that insiders were buying at 23 and 19 says something. For one more recommendation, George Gilder had GLW on his "telecosm" list last time I checked, but that could be viewed as a negative, given the hammering his stocks took in the last year. Here is another, Kevin Landis has it in his top ten in the Tech Value Fund as of late April I think (TVFQX). Of course his fund has not done well recently, but 5 years prior it was like a rocket. It seems to me the world does not yet know what to make of fiber optics. There is no precedence for this situation, and therefore we don't know how to make an accurate assessment. Hence the extreme overvaluation of these stocks last fall, and the perhaps significant undervaluation here, or maybe still significant overvaluation. My feeling is that if one holds GLW for two years from here the downside is minimal, but I could be way off. The upside, however, I think could be very significant. The answer lies in the technology itself, something very few seem to understand. We know bandwidth demand will continue, we don't know the rate that it will continue, but I won't be loosing sleep over that part of the equation. John