NTAP CE Unterberg Towbin STRONG BUY of Feb is still correctthe rest are market accumulates, and holds or buys. So ABN AMRO change to a hold, shows again that the ANALysts are 6-9months behind the curve biz.yahoo.com. The Merrill Lynch hardware conferences this week, especially on Brocade which news was broadcast widely, and NTAP and EMC and the rest, all show that STORAGE is a NECESSITY, and is GROWING EXPONENTIALLY. This needs context: The other economic indicators show the economy is still on the verge of, or recovering from the edge of a recession. THE GDP was up 2%, but other indicators show records new layoffs and unemployment since 1992 the last recession, and more such numbers will follow. The key here is what Karry Kudlow said Monday, that the Federal Reserve "GOOF BALL" policies were not only unwarranted, but that the FOMC needs to, and no doubt will, ease rates at leat 50 basis points more, until we get "POSITIVE CARRY" that is the Fed interest rates should be between the 3 month Treasury Bills and 6 Month Treasury Notes, and right now it is higher than both, and higher than it was in 1999 when the economy was booming, and Greenspan (The Head GOOF BALL) started raising rates for no legitimate reason, and now that the economy is hurting, it needs rate cuts, well below those that existed in 1999 when he created this mess. The economy will then get more liquidity, so will the markets, earnings will improve, purchasing will return, growth will return to its regular higher levels, and earnings will return. Meantime, the storage sector, like NTAP will GROW EVEN MORE, since they still have 20-25% quarterly growth going forward, they will no doubt triple digit that growth once the economy recovers. That means exceeding their past 52 week high as their P/E adjust accordingly to improived market and economic conditions. See also my prior posts on METCALFE's LAW: UTILITY (Demand) => DATA USERS SQUARED.
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-Crystal Ball |
