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

To: Bill Harmond who wrote (11498)	5/11/2002 4:44:39 PM
From: 16yearcycle	Read Replies (3) \| Respond to of 57684

Rboc spending statistics show that prior to the 96 telecom act, the rboc's spent an average of 52% of ebitda on cap ex. Also, the long term average of capex as a % of d&a has been 80%. CURRENTLY, the %'s are 36% and 52%, which may be the lowest ever, and if not, they are real close.They may be the lowest ever by far...I just don't know. I would guess they are probably about where they typically are in a recession. Furthermore, so far this year, the rboc's aren't on pace to spend the annual budget. They have spent about 22% of their budgets in 33% of the time. If enterprise spending has stabilized and ticked up a bit, a fair assumption based on csco's numbers, and rboc spending has stabilized at bare maintenance, where do we go from here? I guess I am most worried about market prices of stocks rather then whether business is picking up. I am not worried about inflation, or the dollar, or oil. Japan is better. Europe is better. Korea just raised rates. The majority seems to be worried about a double dip here, but there is no evidence of it, and the economist who best called this mess, the folks at isi, and ecri, aren't seeing it either. There is some evidence of an i.t. spending pick up. It's rational that it will be quite clear within a couple months, or at the latest by years end. High pe's keep being discussed and that's all well and good but we already have p/s ratio's overly compressed. When e estimates are too low, pe's will likely stop compressing...and that is why i am worried. It seems as if this won't turn for good until 1)e estimates start going up; 2)vix,vxn and put/call numbers spike. Why do i conclude this? The institutional folks keeping saying this and they have been right so far, and because everything else is already in place. Check out all sorts of ta indicators...lots of records and near records. Why aren't we climbing the wall of worry? I just don't know.