WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 236.33

-2.9%

Jan 23 3:59 PM EST

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To: Dave who wrote (24678)	1/22/2004 4:15:14 PM
From: Andre Williamson	Read Replies (1) of 60323

Dave - two reactions... When an investor buys an equity, there is a required rate of return associated with that security. No way. You're implying careful and accurate analysis and incorrectly assuming equityholders follow this, either explicitly or implicitly. I strongly disagree, and would argue that most buyers out there (at least for growth industries with limited visibility) buy an equity primarily on the 'greater fool' theory. This is supported by the empirical evidence, which shows a momentum bias(i.e. persistence of price direction in either direction) in short-term equity movements. Also, earlier you quoted As one Airline Industry executive said, "You are only as smart as your dumbest competitor" Except in this case, since Sandisk has patents, product profits can be zero industry-wide and Sandisk will still be bringing in ~$1.25/share in licensing & royalty revenues. Andre

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