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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (7523)	9/7/2001 2:23:08 AM
From: energyplay	Read Replies (2) \| Respond to of 23153

I think the point is they are capital equipment, and not consumables. So once they are in place and working, there is little need to buy more until they wear out (5 years or more, except maybe the pump lasers) or there is a need for more capacity (which may be a few years out.) Some more on the telecom /networker supplier problem - One big problem is that technical advancements in this industry have increased capacity of new equipment at a rate far faster than demand - maybe 3-8x per year. Demand was growing at 4x per year (1996-1998), but is now maybe 20-40%. WDM (times) faster modulators & recievers (times) more fiber in the ground = equals massive supply overshoot. Sort of like going ftrom 16 k Dram to 64 Meg DRAM in 4 years, while still running 640k DOS. Also, there is a lot of good used (or unused) stuff at 20 cents on the dollar. It's just a typical CAPEX cycle meets the optical variant Moore's Law and spawns IRRATIONAL EXUBERNECE, and one H*ll of a hang over.

To: The Ox who wrote (7523)	9/7/2001 8:45:32 AM
From: kodiak_bull	Respond to of 23153

Michael, You missed my point about JDSU and tech in general (perhaps it wasn't as clear as it could have been). When oil dropped to $10/barrel, GW's stock price plunged to 67 cents a share. It was priced for bankruptcy but it was pretty clear that it was priced that way because of the trajectory of oil prices. If oil had gone to $5/bbl and stayed there, then GW would have been toast. But it was also clear that if the price of oil recovered, day rates would rise and companies with iron would be put to work and, voila, GW would show excellent earnings, or at least project them and you would have somewhere between a quadruple and a dektuple (I made up that word) on your investment. The awl bidness is a cyclical bidness. However, technology, while showing some elements of cyclicality, is not the oil bidness. Nowhere is it written that JDSU, despite selling $3 billion worth of equipment, will ever make (much of) a profit. Nor is it written that competing technologies won't converge and take away its meager lunch. Same is true with CSCO. Same is true with LU. The list goes on. Only MSFT seems able to make big bucks in technology and have visibility going forward. As for being a beneficiary of something, that is true, but it may never make my benefactor a dime. I'm the beneficiary of cutthroat competition in the airlines but that doesn't mean United shareholders are making money. I'm the beneficiary of intense competition in the car industry and the RV industry, but that just means I'll make out well, not them. Albertson's and Safeway and a host of grocers use client cards and loss leaders and coupons to get us into their stores and slice their margins to translucencies; I get cheap fruit, their stock falls. There is a correct price for technology on a fundamental basis but we're not there yet. JDSU is a great example. But I don't care about FA here, I'm just looking for the next great play in the next 3-4 months, and I believe it's short and then long, not long and ride out the crash. I was looking over some old trades last night. Bought SUNW for 17, sold for 19 1/2. Hoo-law, glad I sold. Regards, Kb