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2HRS2GO: Market surprises shouldn&#039t be

From the Why Are People Surprised By This? directory...



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Echelon (Nasdaq: ELON) gets a nod from Cisco and the stock takes off on a magic carpet ride, with ELON shares up 40 percent by early afternoon. Echelon's technology runs networks of everyday and not-so-everyday devices, so it's one of those firms hoping to capitalize on home networking. Here's a diagram of a LonWorks network:

A LonWorks Network

That's from Echelon's web site and don't ask me to explain it. Anyway, people apparently grok the idea of booting up their houses, to steal a line from a presentation recently given by a Broadcom (Nasdaq: BRCM) executive. Echelon yesterday announced its iLon 1000 server finished field tests and became Cisco-certified.

This is big news? Cisco will certify any networking server that works, because it's in Cisco's interest to have as many of these things out there as possible.

Besides, the network king's interest in Echelon is no secret. Cisco and Echelon have worked together on quite a few things, including somewhat high profile projects like a home featured in BBC's Dream House program. A Cisco executive gave the keynote speech at LonWorld99.

iLon 1000 might be great, but there's no way of judging that merely from Cisco certification. The only way the product wouldn't get Cisco approval is if it's horrible.

Obviously it's not, but for some strange reason I don't find "Our Products Aren't Bad" to be a great investment slogan.

Internet Capital Group (Nasdaq: ICGE) says it will lose tons of money and the stock goes down. As if everyone expected the company to turn a profit this year.

Amazing. Absolutely nothing has changed about the company's outlook -- the "we expect losses" statement was boilerplate stuff, the kind you find in your average IPO prospectus.

ICG isn't the kind of company you buy into hoping for quick ROI, because its basic strategy is buy-and-hold. You occasionally have IPOs from companies in the ICG portfolio, but not too many. And it's always been that way, so if you liked the stock two days ago, there's no reason to dislike it now.

If you never liked it to begin with -- well, that's another story.

China suddenly puts its CDMA network rollout on hold and wireless company stocks get bruised. Maybe people will eventually learn business will always be risky in a place like China until the political climate changes.

A breakdown in WTO talks coincided with the Beijing government's decision to delay CDMA investment. This isn't the first time China has held deals hostage to other diplomatic issues -- aircraft companies can tell you all about orders being canceled or given to competitors because of foreign policy conflicts.

Most people know about that, but for some reason they threw it out the window just because Qualcomm (Nasdaq: QCOM) has hot technology. As if gadgetry can change human nature.

China's population blinds investors. Size means a lot, but there's Big and then there's Big Risk. And yes, there's danger in everything, but remember: smart investing is about managing risks. Meaning Qualcomm never should have had a "China" premium built into it in the first place, especially not when wireless is hot everywhere else as well.

Hindsight after fact? You bet. What do you expect? You get what you pay for and last time I checked, ZDNet was free.

From the Useless Interview subfolder comes this headline: "SAP says no point in buying Baan."

Golly, Reuters, thanks for probing the obvious. It's like asking a football player who won the Super Bowl for the first time, "Is this the greatest moment in your career?"

Of course, someone asks that question after every Super Bowl, so maybe I shouldn't be surprised business reporters do the same thing. Hell, I'm sure I've done it many times.

Still, how did the topic of Baan (Nasdaq: BAANF) buying even come up? SAP (NYSE: SAP) is already kicking Baan all over the map. There are no visible synergies, only overlaps, between the two firms. And Baan is such a mess it'll probably cost more to fix it than to buy it. If the current situation keeps up (hopefully it won't) other ERP companies won't have to worry about beating or buying Baan in five years, because it won't be around by then. 22GO>