Vanni,
"But how do you know they are not preceeding the next massive hit?"
The $64 million question. Literally.
In general, you can't know with any certainty. However, you have to research the company, its position in the industry, the trends in the industry, its assets and future prospects, and above all, its management team. If you have faith in the latter, and you believe that the sector isn't going to hell in a handbasket, then you try to see when the stock has stabilized at a low, hold your nose, buy however much you feel comfortable with, and then go pewk in the toilet.
Personally, I am comfortable with SEG's management, talk to the contrary notwithstanding on this thread. The biggest question I have is, what are the intentions of the Koreans and the Japanese? How far are they willing to go, how much of this business do they think they want, at what price do they want it, are they capable of producing consistently the drives that OEMs want and are they willing to sell those drives at near cost? If the answer to the latter two questions in particular is yes, then the whole drive sector is in trouble.
But we'll have to see. |
