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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 93.75

-0.6%

Dec 12 9:30 AM EST

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To: Eli Lauris who wrote (2973)	10/8/1997 4:14:00 PM
From: Sultan	of 14451

<<Look, this is just one quarter. Just as the last blowout quarter was not indicative of a trend, this one may not be either. Most of SGI's operational problems are already being addressed. It'll take time to adjust its sales and marketing strategies to the new markets; perhaps to make changes to management and cut costs more>>. Used to own SGI in thousands of shares (from early 1995 to Jan/Feb of this year). Sold early in the year in high twenties. The reason I kept it though up and down of last year (in hindsight, if I had traded it, would have made a fortune) was because I believed it was a temporary glitch in terms of execution. Had no real concerns re. technology etc. So I don't really agree that this is one quarter issue. The problem is inconsistency (check out the number of quarters where they have disappointed, the reason I got out). They have been promising and try to address their execution for quite a few quarters now. I did not buy any back few months back when they were in teens (after yet another disappointment) although I knew 4th quarter is traditionally their strongest. Conversely if you look at the numbers for last two years, time to sell this one is always before the 1st quarter since that is when they have disappointed. People got blind- sided by better then expected earnings and 1st time ever quarter with over a billion in revenue. I am sure they are addressing the problems. From marketing (pathetic) etc. but unless you see new blood in terms of management, does not even have to be at CEO level but at operational level, seems to me they will continue to be a roller-coaster play. At this point, have no position. Does not mean I won't get back in for trading purposes. Still don't have real concerns with their technology vs. Wintel etc. The reason to get back in would be for the server/data mining/business although the shortfall there is a concern.

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