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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Judy who wrote (15817)	5/4/1998 2:28:00 AM
From: Johnny Canuck	Respond to of 69744

Hi Judy, Thanks for the restaurant suggestion. I like to try great restaurants when I am on business trips and pleasure trips. Hotel food in a word is the pits and sitting at the hotel bar is no fun. You are right about the telecommunications companies having the advantage. The big money will be spent by the telcos, and they tend to work with companies they have developed a relationship with. Most of the telcos' management is quite old school and they stick with what they know as proven reliability and service is paramount. I think CSCO will be a survivor. I have a lot of respect for CSCO management. They have the vision and the deep pockets that are required to make an entry into the business. The transition might be painful though. They need to learn to work in the telecommunications space. Telecommunications equipment has to be 99 percent reliable. You don't get to make too many mistakes. As a example look at Primeco replaciing all of the Motorola's PCS equipment with LU equipment. Expensive ,but it cost the telcos more in lost revenue and reputation if you don't. The standards of the telcos are high because people demand high standards in their voice telephone call. That will apply to data transmission too. I will get back to you on a short list of telecommunication stocks I would invest in long term when I get back from New Orleans. Regards Harry

To: Judy who wrote (15817)	5/18/1998 4:47:00 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69744

Good morning Judy, Thanks for the tip on Commander's Place. I enjoyed the food a lot. I can't say I had a bad meal in New Orleans the whole time I was there. I am a still a little pressed for time these days, but I will try to answer you question about telecommunication companies briefly and fill in the details at a latter date. I apologize for the late reply. First, let me point out that my definition of an investment or yours is slightly different. You tend to define an investment as anything you hold for 6 months to a year as far as I can tell. I am from the old school and look at investments as something that you hold over multiple years or till the fundamentals change. There are not a lot of surprises as good companies in any industry are hard to find. I would emphasize that though I like these companies it does not mean I would buy them at the current levels. This is for other readers Judy, as I know you have you own model for determining entry points. Two companies that are in a class themselves are LU and TLAB. LU is a good investment because of their long list of patents and their ability to innovate. Their management is quite good though a little optimistic at time as far as I can tell listening to their conference calls. Fortunately, they have been able to back their forecast with good execution. I expect their margins to decline as they enter the international market though. TLAB is a dominant niche player in the digital cross connect market. They have a good record of innovation within the industry. They have good reputation for anticipating the needs of their customers and introducing new product to meet those needs. They have a new Cablespan product that should give them access to the emerging cable based telecommunications market. Management has demonstrated good execution and they are very good at playing the analysts game. Below these two I would put NT. They are experienced at competing on the international market. In the last 2 to 3 years they have become very focus and aggressive in expanding their markets. They are currently in a big expansion mode and have a very interesting list of products in the pipeline. Management still needs to learn to play the Wall Street analysts game though. Increasing gross margins is a big issue internally for them right now. More speculative stocks that have good niche positions are ALA, AFCI and ADCT. ALA is the leading supplier of ADSL infrastructure worldwide. It also has an OC-16 and an OC-48 program. This is a diversified telecommunications company. It also has the amazing ability to win contracts in some of the most unusual places ( ie ... Canadian Quebec Hydro). There has been a lot of hype around AFCI recently, so I probably don't have to go into too many details. ADCT is an under covered a company. Management tends to be very conservative. They have grown a lot the last few years by acquisition. They make a diverse line of products . Regards Harry