Excellent post, Greenlaw. And I agree with you that we should see quite some number of earnings warnings. I have cited several reasons as well, with poor execution being the predominant factor. But the high cost of shipping, due to oil prices being sustained at high levels could also be a factor. Manufacturers average out the summers higher oil prices over the course of the year, but that is based on the overall fluctuation. . .and we are now told that prices are staying up in the stratosphere for some time to come. And that is NOT figured into the cost of manufacturing. . . and should begin eating at earnings. . . and may even bring us an uptick on the CPI and PPI.
I also agree with you about retailers. You saw my long list of them on Friday. And I agree that something is going on with DiskDrive manufacturers. We bought KMAG last week as it tracks MXTR faithfully, yet is just a few bucks. Could it be that the DiskDrive makers are about to make a move like the chip makers made this year?
Well, lets explore the factors that would lead to such a move. Yes, they are beaten down within 10% of their range. . .as you've pointed out. Yes, disk drives will be used in places they were not used in the past, providing additional. . .growing demand.
Let's explore these areas. . . .There are millions of set-top boxes being stored for a future rollout by cable companies. . .many have disk drives. Microsoft's answer to the Sony Playstation II has a disk drive. . . .and it wouldn't surprise me if Sega's will too. Notebook computers are hitting a J-curve in sales. These often contain, hard drives, floppy drives, CD-ROM or CD-RW drives, Zip Drives. . .mine has a DVD drive. Wearable computers will use hard drives. Some cameras are using floppy disks or miniature drives. Airplanes, boats, trucks. . .Detroit is trying to make your car the CENTER for all your computing via the net. . .[call us Computer-Commuters]. . . "Sorry Mister, I don't have time to change lanes now, I'm in the middle of a download, my boss is on the cellphone, my toast just popped and Gervus is on Regis.". . .
The entire recording industry has adopted the Hard-Disk recorder as the new standard. Even the home studio market is now moving away from ADAT [VHS tape] and toward Hard Disk recorders. There is now a hard disk, floppy disk or SCSI port in virtually every professional music keyboard system built today. They are even in the higher end home keyboards now. I could go on like this, but my point is made.
It was once thought that Thin-Client servers would replace PCs. . .and everyone would be computing via the internet. . .with no need for storage devices, because everything would be stored online.
But as things develop, it doesn't appear there is as much of an audience for this. People enjoy the privacy of storing their own data. . . and drives are so cheap now, that I believe demand for them will not decrease as once thought, but rather increase in time. . .as they begin popping up on toasters and microwaves. .. .well, OK, that is a stretch. . .but I did see where you could do your banking on the front of your microwave.
Thanks for the alert, Greenlaw. Yes, I agree we should place the Disk Drive sector on high alert for further signs of accumulation. We may even get an opportunity to buy-in closer to their bottoms, should we get the market SLAM, I predicted for this week.
Thanks for hopping over from Raging Bull. . .to share your views with us all. . .
Rande Is |
