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Peter Heywood 12/5/2012 | 3:09:48 AM
re: RHK: Rest in Pieces This discussion over whether RHK had malign intent with some of its forecasts has reminded of what it used to do with its DWDM market share numbers.

It used count in all the Sonet/SDH equipment that incorporated DWDM modules, and then provide a suitable quote for Nortel to issue a press release crowing about being the DWDM market leader, largely on the back of its big success in the 10 Gbit/s Sonet/SDH market.

I know this used to REALLY annoy Ciena, because this meant it never really stood a chance of having its market position in the pure DWDM market recognized.

To me, the whole thing made RHK look more like a fancy PR outfit than a market research company.
dljvjbsl 12/5/2012 | 3:09:47 AM
re: RHK: Rest in Pieces Ross Healey, a Canadian stock market analyst, was saying the same thing about Nortel. He was advising anyone who would listen that the optical market was grossly over built and that they should not buy Nortel. He was predicting that the Nortel share price would fall to the one dollar region when it was priced at over $100 Canadian. He was saying that there is 15 years worth of optical bandwidth growth already bult and in the ground.

For the recrod, he says that Nortel is still overprieced and expects it to fall back to under $2 per share (CDN)
dodo 12/5/2012 | 3:09:47 AM
re: RHK: Rest in Pieces dljvjbsl

When did Ross Healey said that though? It seems that everyone was still promoting the industry up till Q'1-2001 even though some did realize that the UUNET data were pretty skewed, back in August 2000 when the carriers- especially the Service Providers were lowering their purchases and some sales people knew that revenues would not be as forecasted.
paolo.franzoi 12/5/2012 | 3:09:47 AM
re: RHK: Rest in Pieces
We have a lot of analysts who are great at linear prediction of the future based on the past. The issue is that we are in our 5th year of massive disruption. This makes the work of analysts almost useless.

DZED 12/5/2012 | 3:09:47 AM
re: RHK: Rest in Pieces "Unless end users in aggregate spend significantly more each year on communications, the optical backbone is a busted flush.GÇ¥

Exactly, other threads having been thrashing this argument. Its simple supply and demand. In the end the consumer has to pay somehow.

Its a shame no-one saw through it at the time, either they were too dumb or didn't want to.

Who is the crook, the person who produces bogus data or the person who uses it to fool investors knowing its bogus?

And how could the supposedly smart, highly paid investment analysts get it so wrong? Or was it because they were all getting a cut of the action?
Scott Raynovich 12/5/2012 | 3:09:46 AM
re: RHK: Rest in Pieces Hey, while we're using this to toot our own horn, I thought I'd point out to a specific 2001 Optical Oracle report (OO is now known as Light Reading INsider) that said capex would declie through 2005, at which point it would start to rebound.

From November, 2001, Optical Oracle (Light Reading Insider):

"Carrier capital spending has not yet hit bottom. It will continue to deflate for the foreseeable future, starting with a sizeable dip from current levels in 2002.

"So says the latest report from the Optical Oracle, Light ReadingGÇÖs subscription service. Titled GÇ£Carrier Capital Spending: Past, Present, and Future,GÇ¥ the report looks at how carrier spending on equipment increased 250 percent from 1997 to 2000, what slammed on the brakes, and what it will take for spending patterns to show significant growth once again.

"Based on feedback and financial data from 11 top carriers, the report concludes that carriers, which expanded their capital spending far more quickly than their revenues and profits, have no choice but to cut back. For 2001, carrier capex is poised to decline 16 percent from the previous year, and based on early forecasts from the carriers it will decline another 35 percent in 2002. After that, expect declines of 10 percent per year through at least the next three years, the report says."
Kevin Mitchell 12/5/2012 | 3:09:46 AM
re: RHK: Rest in Pieces Larry333 makes an excellent point about forecasters being wrong, but the reasons behind them being less than genuine. Big numbers get the attention and customers of marketing people.

Also, let's keep in mind that there were and are still smart analysts with integrity from RHK like Teresa M. and Mark S.
dwdm2 12/5/2012 | 3:09:45 AM
re: RHK: Rest in Pieces "If the same technology is available to all, how does one explain the discrepancies?"

rjmcmahon, you do have a point here. Before I can comment, however, I need to educate myself about if the above is true. There are competing technologies available. I'd like to learn what technologies Hong Kong or Japan uses for their Gbs connections. Are they offering to homes directly on Fiber? What kind of computer the end users have to utilize this Gbs signal and what technology enables such use? (forgive my ignorance).

"These observations suggest something other than technology is holding back our..."

My only point is an appropriate technology (i.e., one that is available, cheaper, easily deployable and maintainable, etc.) can alleviate/remove other hurdles.
deauxfaux 12/5/2012 | 3:09:45 AM
re: RHK: Rest in Pieces Well, we couldn't disagree more. Through many personal interactions, I found that John and his crew were incredibly arrogant, and that most of what they said was useless.

Your point that he was just the messenger doesn't wash either. These guys produced "research" which they touted as being the best in the world, at very high prices. For $35,000 a year per track, I would expect that they hold themselves accountable for the accuracy of their data and conclusions

"Experts talking to Experts" if I remember right

deauxfaux 12/5/2012 | 3:09:45 AM
re: RHK: Rest in Pieces Dead right you are....this nonsense went on all of the time with public and private companies.

The public markets ate this stuff up as fact and moved stock prices because of it.

VCs wouldn't even look at other market research. RHK and its principals were brought into a lot of deals because of what they said......or didn't
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