Yogi,
<<Structural change is the big key. The DD companies have known for a long time that they must consolidate but haven't. Different this time.... I think so but this is what makes this a high risk investment particularly in the face of indications of lagging demand in the pc sector going into the 4th quarter... but we've been there before, too.>>
I think the promise of structural change is as high as ever. I believe the BusinessWeek article, lock, stock, and barrel (or to the nay sayers you may say "hook,line, and sicker".) There is more in the offing in my opinion. I believe that Samsung will finally withdraw, as early as Q1-01. Conner is in the midst of wholesale lay-offs in China as I type. Great Wall Computing is in 11th hour negotiations to take over the final production to use up the inventory. If Samsung goes then you may dismiss Trace, the media maker in Taiwan (another reason I felt bullish on Komag/HMTT which is already a 40 per-center from my entry point.) I expect Mitsubishi Kasei to follow shortly and exit from the bloodied media sector. MKE will exit over time and turn all manufacturing back to the newly combined HDD-Maxtor who will re-up their idled work in Dalien China IMO.
The lagging demand for PCs going into the fourth quarter is a mirage IMHO, or at worst, a point-in-time aberration. Apple does not, a PC sector, make. But more important is the slowing of corporate sector spending. I think this may be real and related to a lack of standards with much confusion in the market place. Nevertheless I expect that to also be a temporary condition.
I also like the way the non-traditional applications are emerging. By the way, am I the only one lusting after one of IBM's 1 GB micro drives? At $500 bucks it isnt necessarily cheap but for a road warrior it is a wonderful back up solution.
techweb.com
storage.ibm.com
Gosh, I hate to say FLBA but that is what I feel after many moons of being understatedly bearish. This is a wonderful time to pick up Maxtor, Read-Rite, Komag, and HDD IMO.
P.S. Are you (or anyone reading) looking into fuel cells?.
Best,
Stitch |
