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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.
SNDK 226.97+13.3%3:59 PM EST
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To: Unwelcomeguest who wrote (3515)2/21/2018 10:25:32 AM
From: Art Bechhoefer1 Recommendation

Recommended By
Bruno Cipolla

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The guy doesn't understand what correlation means in a statistical sense:

"Because of the correlation in memory chip pricing and stock pricing, a correction in memory stocks is anticipated."

The correct word should have been "association" but not correlation. Correlation is thought by some to mean a causal association, which is also not true. What the graphs in his article show is that the price of certain kinds of memory chips is going down. That can mean either it costs less to make them, or demand is dropping in the face of constant or increasing supply, or both.

There can be significant short term changes in demand, such as caused by Apple apparently reducing its near term production of high end smartphones in order to adjust to momentary changes in demand. Even in this case, which is probably true, it doesn't mean that some other manufacturers are not increasing their own production of smartphones to take market share from Apple. In other words, if unit sales over a period of, say three to six months remain fairly stable, then one cannot claim a loss of demand causing lower prices of certain components.

One more reason why SeekingAlpha articles often leave a lot to be desired.

Art
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