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JDS Uniphase Corporation Message Board

  • long_term_cap_gains long_term_cap_gains Oct 11, 2008 10:56 AM Flag

    The Pace of Progress in Communications ....

    has not slowed down, regrdless of how much "the sky is falling" shouts you hear.

    The following BusinessWeek article is about Nokia, but it also outlines how RIMM, APPL, GOOG, and MSFT are all competing to grab market share with Web enabled phones. In a related article, BW also mentions how the BRIC countries (Brazil, Russia, India and China) have a high percentage of mobile phone users who do not have PCs at home so their exposure to the Net will likely be through their mobile devices. Important to note that this large segment of the wold's population will indeed contribute to the growth in the overall communications industry, specially optically enabled telecom equipment.

    http://www.businessweek.com/magazine/content/08_41/b4103067214737.htm

    Then we have Verizon trying out Internet Video over its FiOS service:

    http://www.lightreading.com/document.asp?doc_id=165646&site=cdn

    The sky may seem to be falling but change is the only constant, and in technology that applies even in the worst of times.

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    • H -- I would be the first to agree that there are "abstract ways of 'knowing.' "

      Probably one of the most peaceful moments of my life was when I realized that because of the finite part of my mind, there were things I would never fully understand. But I also realize that I still wander into the camp of wondering.

    • Thanks for your kind words.

      It is a difficult time to know what comments are meaningful and helpful. Probably all of us are at about the same place. None of us can see the future.

      I am just cutting down on optional day to day spending and hanging in there -- assessing what I can and moving as prudently as I can, for the most part.

      It will be significant how the nation reacts to the next President -- whoever that is. I'm not so certain I can predict that move now. This economy thing is so worldwide. Working our way out will be tricky -- and not totally within U.S. control. Intelligent choices can have strong influence, however. A lot of the people I interact with seem to be just "going into their cave" until after the election. I can't do that. I'm watching as closely as I can and noticing what appears to effect what. Not that I'm always right in my assessment. It's just that i am not going to put my head in the sand.

      Economically, I can't do everything; but I can do something. And I'm pleased when I see that kind of attitude evidencing itself around me.

      Best wishes.

    • Great post, you could not be more correct.

    • "The sky may seem to be falling but change is the only constant, and in technology that applies even in the worst of times."

      Long Term, you have made a strongly relevant observation in the midst of what it obviously the most disturbing economic period in most of our lives.

      The sky really IS falling for so many people, but I would not be surprised if in the working out of this period, the nation is a better place in which to live. By that I mean the result may be that people have a more reasonable and useful perspective on both business and their everyday lives.

      I believe you are correct in your assumption that technology and the communication sectors will overall move forward. There are several reasons for that. For one thing, when the chips are down, people in this country (and probably in most countries) rise to meet the occasion.

      Intelligence and creativity will not suddenly stop. Quite the opposite. I expect to see both in communication and in assorted industries rising to replace a dependency of oil be areas which start rising -- and in time produce great numbers of jobs and also start to produce profitable areas.

      People have an innate need to be successful. And if they cannot be in one way, they will be in another. Already we are beginning to see people reach out to each other -- just like they do after a hurricane. With many people losing vast amounts of money and security, almost certainly families will become closer (even as there will also be controversy). "Families of choice" will also bond together. I am already seeing open hearted families take in individuals whose jobs have disappeared -- and who are working hard to find other things to do.

      One wonderful thing which drives technology and especially communication technology -- is that it not only gives an outlet for use of intelligence and creativity -- is that it saves both time and money in the long run.

      One example is how Barack Obama has both raised the vast amount of money for his campaign, but also has created a ultra vast network of ways for people to interact and enjoy being with each other. I have never seen anything remotely like it. And I mention this NOT in the political sense -- but in the sense of the ways the nation will find new avenues in which to expand and create different ways of living -- especially bringing into play with it energy independence. And the word "play" reminds me that this movement creates enjoyable and profitable ways to PLAY and interact with each other.

      Despite all its frustrations and ways in which a lot of people have lost money, JDSU has -- as one of you mentioned in one of the many responses in this thread --continued to slowly build its strengths.

      In the end, some of the policies which almost drove us nuts may prove to be in exactly the right place at the right time.

      I do not expect pulling out of this downturn to be quick or easy. But it will happen. And I my notion is that communications technology will be one of those areas which will be significant.

      I wish all of you patience and strength to endure and move forward over the long haul.

    • "What could happen is people will get in on the short term rebound paying higher prices and end up selling at lower lows in the Markets to come at a later date."

      The very last part of your sentence is why I have refrained to commit the cash I have on the sidelines for some time now. Lukcily that money did not decline suffer the decline of the past two months.

      Great to hear your take on things, it is good to hear the TA side of things, specially if you think that JDSU is a special situation.

    • "If things get well all of a sudden (doubtful), I will commit the funds I have on the sidelines."
      This is the trap in itself; you are not going to know until it’s too late.
      What could happen is people will get in on the short term rebound paying higher prices and end up selling at lower lows in the Markets to come at a later date. AT this point JDSU is a special situation needs to be monitored separately.
      I wish you the best of luck.
      It is by no means easy!
      I will be traveling so stop at the board some time in the week to see had happened.

    • "I am less cautious now than before"

      Me too. However, the only reason I am this cautious even at these low levels is because we have not seen this kind of trouble since the great depression. And I think that companies' guidance has not yet fully reflected the problems. The global economy just started to decline fast, if that persists the bears could be proven right, yet again.

      Even Warren Buffet has not. He was born during the depression, but never had to navigate it.

      So, yes, color me skeptical, I am partially invested (wish I had pulled more out), I am watching from the sidelines. If things get well all of a sudden (doubtful), I will commit the funds I have on the sidelines.

      I hope that I am the perfect contrarian indicator and we are about to turn. I am a pragmatist, I would love nothing more, trust me.

    • You should be cautious; however, don't you find it interesting how human behavior works... I am less cautious now than before.

    • BTW, if and when there is any inkling of my theory that telecom equipment makers are shunning the small players I would be extremely bullish.

      That would signal the infamous and elusive final consolidation in this Industry. It would be a game changer, and extremely bullish for the survivors.

      Or if the projected slow down does not materially come to be, then I would be mildly bullish.

      I have not left this industry for dead, I am just cautious and want to see positive evidence, rather than the relentless downtrend in sync with a terrible market.

    • I am speaking overall economic fundamental deterioration which by the way does not escape any company. They are all ships on the same turbulent ocean. The global fundamental picture has dramatically changed.

      As it relates to JDSU specifically, I too, see dramatically better fundamentals than say 5 years ago. The company generates far more cash flow today than it did then.

      However, the recent share buyback has lowered their cash (i.e. cash minus debt: some $350M) to levels that I consider a bit thin given its size and operational cost structure. I dislike share buybacks by most companies due to the fact that it actually means they spend shareholders equity to essentially allow insiders to dole themselves with an even bigger spoon. Then we have the fact that JDSU bought it all at an average price of $11.68, a complete mishandling of sharehoder's money. Completely inept IMO.

      But I digress, the cash issue may prove to be a concern that is misplaced, I admit, but under current severe conditions I think it is prudent to be cautious, i.e. much, much tighter credit, and the likelihood that telecom service providers may decide to tighten their purses, would be damaging to all companies in this sector. It depends on the level of slow down to come, may decide if the cash on hand is adequate or not. That has yet to be clear, look for guidance to give us a hint. The slow down could be multi-quarter, that also has yet to be known.

      One potential event yet to occur, which may counter balance/offset a slowdown in orders is if telecom box makers (CSCO, CIEN, JNPR, ALU, TLAB etc) decide to shun the small players (AVNX, BKHM, OPXT, OPLK) due to concerns that they may not survive. If this were to happen, JDSU could start seeing bigger orders even in a bad market.

      I strongly believe that will happen, the question is when. We have yet to see evidence to this effect.

      Right this moment, my attitude is:

      SAP already warned, MSFT's Ballmer sounded the alarm that if the problems persist it would be affected. This earnings season will be just a hint. I tend to think the worst quarter will be the 4th or first quarter, then a bottom (hopefully).

      All that said, I still hold some JDSU, but have a decent amount of cash to move if/when I see tangible evidence of a trend reversal in the overall markets.

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