Worthwhile article for Seagate and DD investors:
Wrong! Dispatches from the Front: Cramer on the Complexity and Pain of Capitulation
By James J. Cramer
12/12/97 8:38 AM ET
Now we are separating those who think investing is fun from those who know it is dangerous, but at times extremely profitable.
I remember when I used to sneak into Motley Fool Chat Rooms to get a sense of what the spectators were thinking. I was always amazed at the good cheer in the rooms. Even during the Iomega debacle.
But earlier this year I stopped when it became apparent to me, that even though the chat rooms were meant to discuss all stocks, almost all anybody really wanted to talk about was how great the disk drive and storage stocks were. People were clapping for Western Digital. They were cheering for Seagate. They had an Applied Magnetics booster club. People had fallen in love with Readrite and thought Quantum could do no wrong.
I had left the group earlier in the year, in part because the fundamentals were turning down, and, in part, because I don't like people rooting for my stocks. Part of the job description for running a hedge fund is trying to figure out whether people worship a stock or a particular group too much. Every time I stepped into a MF chat I got blown away by the rooting for a group that is notorious in its fickleness. I was shocked at how complacent these investors/traders were about a possible downturn in this group's fundamentals, particularly given how boom/bust this industry was from 1984 to 1994. Anybody who lived through the myriad Conner, Maxtor Micropolis, Miniscribe, Western Digital, Quantum and Seagate disappointments of previous cycles would know that these stocks can be vicious heartbreakers.
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