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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: Jack Jagernauth who wrote (6069)	10/30/1998 3:29:00 PM
From: JZGalt	Read Replies (2) \| Respond to of 18928

Jack, Can you say internet? In the shift from the PC centric model of technology to the distributed model where telecommunications bandwidth dominates the capital expenditures these companies are the big names. Intel blew it when Andy Grove decided to ignore the expansion of the internet. That gave these companies a toehold and they are making every move possible to stay ahead of the game. I've written on and off on this thread about this theme, but the players are the ones on that graph plus Broadcom (BRCM). I personally like PMCS as the company I think will most likely continue to dominate it's market, but you can wave a wand over the entire group and probably make money if the time horizon is long. This is a very difficult area to get to know if you want to actually understand the technology, but it is very simple if you apply Peter Lynch's principle of buying what you know. You most likely consume 10X the bandwidth you did last year. It is unlikely that you will ever consume less bandwidth. More people are using the internet and the bandwidth demands are doubling about every 4-6 months. These companies provide the components that allow the CSCO's, ASND's and NT's of the world to sell "boxes" to the QWST's, baby bells and Worldcoms to keep you happy. Look for SONET and ATM in the portfolio of company products. Look for strategic alliances and design wins. Although I haven't AIM'd any of these stocks, they are just about perfect examples of the types of stocks the non-traditional technology AIM user might look for. Volatile as heck, but eps increases put a solid floor in an upward trend. I was beating my head against the wall when TXCC went below $13 a few weeks back and I didn't have the guts to go further on margin to buy more (it passed $25 today on a good TheStreet.com article). I finally sold a dog to buy another block of GALTF at 8 1/4 and was too slow to buy more at $11 earlier this week (it passed $15 yesterday). What could go wrong? Capital expenditures for data communications equipment and telecommunications equipment could undergo a significant pause if the world economy slows. Nervousness in the banking sector ( major buyer for internal use) and the slowing outlook from europe last month slammed the stocks right into the ground. Any further jitters about a broad based economic slowdown worldwide will slow capital expenditures in this area. There is also concern that budgets will be diverted from capital expenditures to Y2k issues in 1999. If you time horizon is beyond 2000, then these are good stocks to research and consider. ---- Dave ps. one analyst uses the analogy that if you are reading this message, it passed through 4 chips made by PMCS.