It could be that we will return to this group, but I think in my case, I took my eye off the ball by following this group. There were too many other growth sectors which had more compelling dynamics.
I think hearing a break down of the market at Diskcon told me clearly that these companies were doomed to squabble over too small a market. At that time, they compared hdd to PC, and there were 6 dominant players in both groups, except in PC's there were still 48% of sales happening in the other catagory where as the HDD sector was perhaps over 90% served by the top 6 players.
Well, this could have been possible to call a winner, except the dynamic of HDD's leaves no one player with any significant technology advantage. No Gorilla's in this game. So, clearly they have a commodity product with a great expensive development cycle. Growth of units is not bad, but growth of supply is seemingly unlimited.
So, my conclusion was that there would never be any great winner emerging in a pure HDD role. Still, that does not mean that cyclical issues will not make buying opportunities, but the market is shell shocked on these stocks and like you said they really don't care that much about good or bad news.
I've had such a great time communicating on this thread, I'll not remove it from my bookmark list, but I can't find reason to invest the time studying this sector as I have in the past.
Regards,
Mark |
