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Technology Stocks : Applied Micro Circuits Corp (AMCC) -- Ignore unavailable to you. Want to Upgrade?

To: techanalyst1 who wrote (1631)	10/16/2001 10:59:36 AM
From: FR1	Read Replies (2) \| Respond to of 1805

It will be an interesting CC. We will have to compare notes after it is over. I still stand by my "big picture" of what happened. Basically, it was like this: By the late 90's businesses knew that broadband was in great demand and if you could provide it there were buyers. It was a gold rush to lay fiber with the long haul being first. Small companies sprang up that planned on putting fiber in the ground and then selling their net to bigger people (like T, WCOM, Q, etc). This really put the pressure on the baby bells and large telcom businesses to get their stuff in the ground first. Consequently, CSCO, NT, LU, etc and their suppliers AMCC, PMCS, etc were going nuts tryig to keep up with the demand and they extended credit to the people doing the roll out. If the FED would have stayed out of the picture, there would have been a natural and normal weeding out of businesses. Instead the FED insisted on doing a tight money campaign to kill off businesses not because there was any inflation but because things looked "academically" unsound. The FED move was a disaster to anyone involved in telecom business. It also really screwed up CSCO and the like because it left them with monster inventories and debt from businesses that they could never collect on because the tight money policy killed them off (no funding available). Now we are living through the correction phase. If interest rate increases alone were responsible, interest rate cuts would solve the problem and they haven't. This is only true if the FED started cutting rates in late April 2000 when everyone was still alive (like they should have). Showing up with money after most of the businesses are bankrupt or so completely restructured you can't recognize them does no good. Now you have to start from scratch and it is a long road back. IMHO, I think it will be a long road back because so many businesses were killed by the FED (hence nobody out there to place orders) but AMCC will be one of the strongest as the market does comes back. AMCC, PMCS and BRCM are my bets. Some CSCO too at this level. In the long run, the market rewards areas of growth. Although you can argue that banks, etc have small reliable growth the basic demand for broadband has the most predictable strong demand and growth of any industry I can think of. Can you think of any other industry?