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Technology Stocks : Quantum Disk Drives (HDD)
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To: Sam Citron who wrote (149)9/13/2000 8:21:41 PM
From: Cary Salsberg  Read Replies (1) of 179
 
Hi Sam,

Thank you for your PM advising me about HDD. I have closely followed the "fortunes" of the local (Silicon Valley) hard disk drive makers since 1990. I became acquainted with Quantum when it was recommended as the best SCSI to install in my Amiga 2000 (circa 1987). I owned RDRT (doubled my money) and Syquest (broke even) in the 1993-95 time frame.

I just finished reading the 149 posts on this thread and I think the conclusions are that it is cheap, it has a strong balance sheet, and it is in a commodity market with cutthroat pricing competition.

I don't think the TIVO market will change the competitive pricing for the drive makers, but it will increase total unit sales volumes. There is no certainty that profit increases will follow sales increases.

Historically, drive makers have gone through cycles where low to high prices have risen 3-4 times or more. These cycles reflected pricing stability and improved profits and they were usually short lived. The tremendous growth of PCs and of PC storage requirements drove these cycles and the commodity nature of the product eventually ruined the prosperity.

My bottom line is that I think your investment will be profitable, but I would rather avoid commodity industries.

Good luck,

Cary
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