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Technology Stocks : (LVLT) - Level 3 Communications -- Ignore unavailable to you. Want to Upgrade?

To: Phil Jacobson who wrote (538)	3/27/1998 1:58:00 AM
From: ahhaha	Read Replies (4) \| Respond to of 3873

If you read my comments here, you'll see I was never all that bearish on LVLT for the long term once there is an operating entity, that is. In fact, I know all about the paper shuffle surrounding the emergence of MFST years ago and the actual reason of the buyout. It was a defensive move, not a better mousetrap strategy. I also was quite bullish on QWST which you can find in that thread last year. I'm still bullish on it maybe even more so now, but they'll get whacked pretty good in what is coming. Oil price increases have been deflationary because it was easier to cut back on usage than pay higher prices. In an environment of wealth induced price indifference and falling dollar maybe that won't be true. Gold and oil are correlated in price now mostly because fear is rising rapidly. OPEC will tighten supplies. Why not own an oil play? Gold looks good simply because it's so cheap. It looks terrific if the FED attempts to hold down interest rates. Asian dumping isn't possible because we have stringently enforced laws about it. Our semiconductor industry has complained at the first sign of dumping and the government is right on it. Besides, dumping is good for everyone. Good quality at low prices forces our indolent corporations to get more efficient. More efficient means higher profits although over the short run there is the usual J-curve effect. The export portion of national product is small and is not enough to significantly impact general market expectations of future profitability nor does that effect the dollar. Long term changes in the dollar vis-a-vis other major currencies reflect relative economic efficiency of a given nation's willingness to produce. The movements in the dollar are very gradual relative to this absolute criterion. The dollar "moves" are caused by something else: large scale instantaneous movements of fear money in anticipation of structural change. The Asian Flu of late last year wasn't so much an issue of real economy, rather it was a mass money movement overreaction to an inevitable slowing in the torrid pace of Asian economies. The dollar actually inflected in July of '97 and has been slowing and now reversing to reflect a structural change in our economy. The change is that we have all gotten sufficiently wealthy that we don't mind price increases. You flippantly say, "inflation is low". Inflation is only low while the entire commodity arena has been in major deflation! What happens when strong real economy bids up the prices of commodities at a rate greater than that efficiency which they can be supplied at previous prices? Suddenly the perception "inflation is low" becomes the perception that "inflation is high". By that time the stock market has tanked. A strong dollar causes acceleration of growth and thus domestic inflation in Asian economies . If Asians are willing to produce the same goods that we do at lower prices and we can't lower our wages because of domestic demand and high employment, then inevitably their inflation gets exported to us. Thus the dollar changes direction. The October sell-off was caused by the realization of this change and earmarked the end of the intense phase of the '95 - '97 bull market. The Asian dollar scramble hid the intrinsic inflation to some extent and enabled the current specious move we are in by slowing the influx of money into institutions earmarked for the stock market. Since January the money has been factored into the market in spite of the growing disparity between perception of interest rate environment and reality. Reality is interest rates are bottoming and soon will be headed up. This will cause a major sea change of psychological knee jerk reaction. All those smart guys out there speculating on the sure thing technologies of tomorrow. You just aren't appreciating that all of that can be knocked into a cocked hat by the fear of potential loss in two seconds straight down. The psychology of this thread is representative of the bag holders. To succeed you have to take money off the table if you're trading and if you have substantial gains. If you hold LVLT and you say, "I don't care if it goes to 20, I know that one day it will be 1000, then all of the above is totally irrelevant. If LVLT can put together their SONET IP Fiber net, I'm just as bullish as you are regardless. I'm not long, but I might get a chance to get on board cheap.