Article Info

March 31, 2009
13 Comments

Goodbye, and Good Luck

The past three years have been a challenging time for investors in the Networking and Communications vertical, particularly those focused on the small and mid-cap sectors.

Healthy skepticism on our part allowed us to perform better than most in this area. But trying to attract investor interest to a sector where the average annualized loss over the past three years was -38% (compared with the -20% for the NASDAQ) has become impossible.

I firmly believe (barring further macro-economic destruction) that the wireline carrier component and equipment business is near the end of its secular decline, a reversal resulting from a decade of record-low carrier capital expenditures as a percentage of revenue. The next decade will be ruled by the companies that build real things, generate measurable value, and provide the productivity multiplier needed for legitimate growth. This sector fits that description.

Certainly many of the companies in this sector, particularly smaller ones and poorly capitalized ones will not survive. Liquidity will matter more than technology during this transition.

Nyquist Capital will be a casualty.

I want to thank each any every one of the people who took the time to read, comment, and critically disagree with everything written here. Creating the content within sharpened my mind in a way that made me both a stronger thinker as well as more aware of my cognitive biases. I especially want to thank our clients for their trust and two-way communication of ideas.

I am very lucky to be joining the excellent team at Infonetics Research, and to work closely with the founder Michael Howard. I will be taking over coverage of Optical Equipment as well as identifying new areas to provide services to Infonetics customers.

My new contact information can be found here (Andrew Schmitt).

Thanks for Reading, Goodbye, and Good Luck.
Andrew Schmitt

Discussion

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  1. Thank you for sharing your insights and interestuing links during many years, Andrew. I follow the Nordic telecom markets closely. Do not hesitate to get in touch should you have any questions.

    Best regards and best of luck to you,

    Harald Lie

    Posted by Harald Lie | March 31, 2009, 3:48 PM

  2. It’s sad to see this ending, but now I’ll read Infonetics reports that come my way more avidly.

    Posted by Carlos | March 31, 2009, 4:26 PM

  3. Sorry for the Nyquist, and definitely I will read more Infonetics for your articles.

    Posted by Lei Tian | March 31, 2009, 5:05 PM

  4. Andrew,

    You have done an outstanding job during the past few years providing your readers with insightful arcticles with realism, controversy, hints of sarcasm and most often the plain truth. They will be missed.

    Congratulations on the new job. Looking forward to reading some of your future material.

    PVE

    Posted by Patrick van Eijk | March 31, 2009, 6:46 PM

  5. Thanks for the superb analysis and subject coverage over these past few years, Andrew. Good Luck at Infonetics. Frank

    Posted by Frank A. Coluccio | March 31, 2009, 7:14 PM

  6. Congratulations and best wishes for your new position again Andrew.

    Paul Sobel

    Posted by paul1154 | March 31, 2009, 7:49 PM

  7. As a “software guy” a really enjoyed your insights into the networking and comm space and will miss you blog. Good luck with the new gig!

    Posted by Bill Burnham | March 31, 2009, 9:33 PM

  8. Thanks for your help Andrew, and best wishes for the future.
    stewart

    Posted by stewart sprague | March 31, 2009, 9:53 PM

  9. Andrew,

    thank you for sharing your insights. You will be missed. Start a new blog soon. :)

    -jimmy

    Posted by Jimmy Mun | March 31, 2009, 10:09 PM

  10. all the best. will miss your analysis of this space….will now start taking infonetics more seriously…

    Posted by sampath | April 1, 2009, 12:34 AM

  11. Andrew,

    Sorry to hear you’re closing up shop, but congratulations on the new gig with Infonetics.

    DG Lewis

    Posted by DG Lewis | April 1, 2009, 12:33 PM

  12. Andrew,
    I can only with you the best in your new adventure as every door that closes had to be open to do so. I have always enjoyed your insight and know you will be successful in whatever you take on.

    I will miss this.

    Best wishes,
    Matt

    Posted by Matt Dru | April 2, 2009, 12:26 AM

  13. Hi Andrew,

    I have been working in Telecom domain & most recently in PON. I used to be an avid reader of Light Reading, but once got introduced to your site, it became a daily ritual to visit this page for thoughtful analysis. Your information, collection of articles & user comments were great reading. Wish you the very best & hope that wireline sector does show recovery for benefit of all, especially for our tribe.

    Best of Luck,
    Sachin Vaish

    Posted by Sachin Vaish | April 2, 2009, 7:29 AM

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