I think SNDK held up moderately well today, given the overall factors that affected the market, and particularly technology/Internet stocks. This was also an options expiration day, and I'm sure there was intentional selling of shares to prevent losses by call option writers. The main thing here is the business fundamentals are very good.
We've been concentrating too much on consumer applications in cameras, music players, cell phones, and palm computers. We tend to forget the significance of the SNDK collaboration with Kaneb Services (ITI) to make rugged dog-tag mmc-type cards containing medical and other information for Army personnel. This contract is in force. A standard for storing and accessing confidential information has been approved. The demand generated by this type of business is very steady and quite immune from economic ups and downs. It will create an income stream for SNDK that will help cover development costs for other applications.
The main thing now is to have patience and use these weaknesses in the market to accumulate shares. Thanks to Greenspan, we should be in for quite a protracted period of weakness. For a person well versed in monetary, foreign exchange, and macroeconomic issues, it was a dumb thing to make comments that he thinks stocks are too high. And raising interest rates to counteract speculation is the wrong prescription. Adjusting margin rates, maybe (when the market gets too high, as it was in July), but using interest rates to cut demand, when higher oil and grain prices are doing the very same thing is, well, stupid.
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