Peter, I am a fan of WDC, but it will probably go lower before it goes back up. We might though be at a bottom also. You never know. Look at all of the bearishness from AMAT and the semi equipment companies and AMAT has come back some since all of that talk. Will the sun come out on WDC suddenly and we will move up some, not much, but some? Is it just dead money as people like to talk so much about in these circumstances? Very hard to tell. You have to look at it this way:
Longterm, which is a 9 month horizon in the techs, will people be wanting more or less harddrives? I think more.
Is WDC well-managed and better managed than Segate? I think so.
Is all the bad news out; maybe, maybe not. If not, we move lower over the next 3 months. If yes, we might not do much of anything or we might move up just a little; 3 or 4 points or so. All the momentum players are out. All the bulls are out. All the scared people are out. If there is more bad news though, there are still more shares to be sold to lower this down further. If something develops that things aren't so bad, everyone and his mother will be buying again into this. When that happens nobody knows.
What I am doing is NOT buying anymore WDC at these prices. I have sold off 2/3 of my shares into previously shot down Ascend and COMS and I am up now on that switch; just a little. I am wondering if CS might be a better place to put the last 1/3 of WDC, but I don't want to switch it all into networking necessarily either. So I might just keep the 1/3 left of WDC and wait; see what develops and average down after all the dust fully settles in 3 or 4 months. The techs might sell down if a slowdown in the techs happens and the psychology is out there to think that is a possibility.
Why a slowdown in the techs? I think we are in an in-between period. The internet will expand, the bandwidth will improve, video is coming to the internet and that means harddrives that are larger, internet commerce is coming, but none of it looks to be coming in '98.
Right now, until the infrastructure is improved and nobody is moving much on doing that except for satellite, we are just kind of stuck. The PC prices have dropped to the point where people have what they want and need as far as the current killer application which seems to be email and very brief browsing of the web for ad hoc inquires. Most people don't have the personal time to do much more with the web; that's right now. There will be another wave, but the first wave is at the shoreline and the next wave might take a couple years to hit. In that interim, tech stocks get dumped. Some won't. My bet is that WAVO, OMKT, and CYCH might have a future soon as momentum stocks. Push technology and internet commerce. We already have had the bull in search engine stocks which will continue with scary volatility on occassion probably. CUBE will be a big hit when the bandwidth arrives and we go video. I like the networking companies at the moment for some reason. They are mostly cheap and if I get burned, they will come back. You have to go with the biggest ones and Cisco is not the only game in town inspite of how the market has it up while that others are down. Cisco I predict will drop back before heading forward.
I think we have a temporary saturation. I don't see bandwidth improving till '99 at the earliest. Cable, telcos, nobody is doing much yet that has reached the consumer and what is going to push any of these players to speed up things?
Just rambling thoughts I have going in my head at the moment. Some of it is just pure impressions with no data to back up any of it. |
