I suspect that the company's previous earnings warnings weren't temporary and that Lucent will continue to have growth problems over the next few quarters. Also, you have the added kicker of spin-offs. We've done very, very well the past year, mostly by avoiding the wreck in tech stocks and by focusing on more sure things. In addition, I've been engaging a lot in takeover arbitrage to keep portfolios positive this year. In effect, I'm doing exactly what Mr. Buffett did in his early years to avoid being dragged down by a weak market.
Some lesser names have market caps lower than the amount of cash on their books.
Oftentimes, a large cash balance means the company recently floated new stock or debt and had a needed cash infusion. However, I'm starting to take a very hard look at the sector to see if some of the survivors are worth their present valuation. We're fully aware that the long-distance phone service markets will be fraught with pricing pressures going forward. But we think the present price of 10 times earnings should produce decent returns for a new investor. I mentioned Diamond Technology Partners, which is starting to look attractive for the first time in more than a year.