Scenario A: The fundamentals are fine, EMC performs as the bulls expect. In this case, I truly expect to be able to buy EMC at current levels 6 months from now. When I read an analyst report or read these boards, I mostly see people who state that everyone ELSE has concerns, but those concerns are not valid. I believe that EMC's current stock price does not discount any concerns at all. This morning's Morgan Stanley comment basically presents the consensus (bull) case, and summarizes thus: "Generally, it is our view that EMC is a good proxy for explosive storage growth and that it will continue to perform up with the best S&P companies (all which have higher valuations on a historic basis.)" This is in SHARP contrast to the scenario that was painted last summer, when analysts wrongly were still worried about Y2K. As I stated then (and everyone on this board concurred) Y2K was a total non issue for EMC, hence the opportunity in the stock then. The investment community now is not discounting any issues in EMC's price.
Scenario B: There are risks in EMC. Those risks could materialize. There is still the risk of a post Y2K slowdown. EMC's competitors are not nearly as far behind as they were a year ago, and depending upon how R&D goes, the gap could narrow further. Gilder could prove to be correct, that NAS (led by NTAP) is really the future of storage, leaving behind EMC in the value added side and preventing EMC from keeping its historical high prices. Is this happening how? No. The market looks forward, though, and a lot could happen in the next 6 months. |
