If EFII is any indication, ADBE's price could certainly be severely hammered in the coming weeks. Americans are only beginning to realize how acute the Asian problems are, and Adobe's profitability is very heavily dependent on Japan, Singapore, Hong Kong, and Korea.
But who's kidding who? If you take a 3 to 5 year horizon, this year's macroeconomic factors and this quarter's profitability are not that important for the computer industry. Companies like Adobe are loaded with cash and can just ride it out. The important factors, at least to this investor, are the natural widening out of a sector, and who has good prospects within the sector. Graphics is a great sector, and companies like ADBE, EFII, MCRE, and MACR all are well positioned.
I follow Warren Buffett's point that the lower a stock's price, the lower the risk of holding it--assuming the reason for the price going lower isn't a deterioration in the long-term prospects of the company, which certainly isn't going on here. So once a price is at a favorable point, as Adobe's is now, I can justify loading up on increasing amounts the lower it goes. |
