Subj : Market Action To : All From : Paul Rogers Date : Tue Mar 11 2003 09:21 am

Pip Coburn, UBS Warburg's technology analyst, has published their "Hot
Topics" in technology.  He's come to the realization that there are also
what he calls "Cold Technologies."  He defines those as "ones that
command a lot of attention without boosting revenue for tech
developers."  His first example is Linux, the open-source "free"
operating system software which is beginning to take market share away
from Microsoft and Sun.  With the economy and "capex", capital
expenditure", budgets being what they are, of course the CIO and CFO are
interested in Linux.  Server "blades", specialized networking computers
that mount in 1.75" of rack space, used to be HOT technology, but Pip
says they're really COLD.  Servers used to be a large part of PC and
workstation makers' business.  But the PC's and workstation based
machines were general purpose computers, blades are cheap but
specialized.

It would be only marginally interesting, even considering how many
things have moved from Hot Technology to Cold Technology, except that
once recognized one can generalize it to a paradigm.  Essentially it is
cannibalizing existing systems in the name of immediate profit, which
leads to a long term downward spiral.

Windows has been a great profit center for Microsoft, but Linux makes
the end user responsible for the software, and few companies have found
a way to make a profit from it. It's very debatable whether the end user
is better off paying less.

Overseas manufacturing is another Cold Paradigm.  As American
manufacturing was once stripped away and sent to Japan, Singapore, et
al., now countries like Malaysia are seeing manufacturing fleeing to
China where it can now be done even cheaper.

Also on Coburn's list are: spam, virus attacks, notebook PC's,
intellectual property wars, and Moore's Law.

Top of the list is management decision making based on ROI, return on
investment.  Deciding to use capital solely where it promises to
maximize immediate profit devalues the long term benefits of innovative
R&D.  Innovation tends to build on itself--hey, it's how we got the
advances of the 20th Century!

I'm not an economist, but as investors we all have to have some idea of
what the economy is about and where it's likely to go in the future.
I've talked before here about the way feedback in the economy is
beginning to send it into a downward spiral.  I think Coburn's on to
something.

Today's Market?  You don't want to know.

Price     Vola-     Momen-    Volume    Oscil-    Summ.
Change    tility    tum                 lator     Index
 -__+      -__+      -__+      -__+      -__+      -__+

 _|__      <___      _|__      _<__      __|_      __>_     03/04
 __<_      <___      _|__      _<__      __|_      __>_     03/05
 _<__      <___      _|__      _<__      _<__      __>_     03/06
 __|_      <___      _|__      __<_      __<_      __>_     03/07
 _<__      >___      _|__      _<__      _<__      __>_     03/10

Timing Signals:  I don't use or recommend timing signals, but they're
fun to watch.  If I did though, well, I might use something like this.
(Be warned!!  It tends to whipsaw around signal points!)

Last Signal: SELL       Date:  01/17/03 S&P:    902
Winner or Loser:  Loser                 By:     -7

See my market tracking charts for '01-'02 and my investment strategy
study at my website(s):
http://www.xprt.net/~pgrogers/Pers.html
http://www.angelfire.com/or/paulrogers/Pers.html
http://www.geocities.com/paulgrogers/Pers.html
.... Seen it all, done it all, can't remember most of it. ___ MultiMail/MS-DOS v0.35 --- * Origin: The Bare Bones BBS (1:105/360) .