*AV*--The knife is just cutting deeper like the acid from the monster in "Aliens". the entire Disk Drive sector is in a worl of hurt. I had deserted this sector months ago, have not discussed it much, and am still keeping clear. Some of these guys are selling so close to book value that any positive turn around in the next 2 years should allow for a monumental gain. No quick roller coaster for these guys.
You must also be keenly aware that both the need for TFH and the likes of these 2 companies is shrinking with every passing day. TFH gave way to MR whic is now giving way to GMR. IBM has an OEM technology unit that is making significant inroads into the GMR sector at the expense of both RDRT and APM. Also, as more are more of these Disk Drive companies try to emulate SEG, you will see products supplied by RDRT and APM done in house. I think the market is now only big enough for one of these two companies, if that.
APM and RDRT are out of my universe and it does not seem likely they will get back into rotation for a very long long time. I need to see how well the Maxtor IPO goes off (Hyundai just filed for it), whether IBM will rule the GMR sector, full implementation of the Quantum in house manufacturing strategy, along with some positve news out of both WDC and SEG prior to even considering APM and RDRT again.
I wouldn't be surprised to see a massive layoff at both companies coupled with a pathetic merging of the two companies to make the Snapple - Quaker Oats deal look like it was the "deal of the century" by comparison.
As I always, I hope I am wrong and that things go very well down the road. However, I am steeering clear and have taken my lumps here.
BTW-How low can the entire tech sector go??? Beats me. I just thank my lucky stars that I went to a great deal of cash when I did and took just a few wrong turns getting back into this sector without any margin. I am waiting for the bottom to fall out and try to pick up stock from my top 10-15 list at book value or low teen PEs. 1998 might be a very very quiet year and just holding onto the seat of the chair and waiting for some light at the end of the tunnel in mid to late 1999. Why hold onto this dead money??? Well, let me run out of cash first and then some margin and maybe I will desert some of these stocks for awhile. But for now, I choose to live under the perverted assumption that this is a massive ploy once again where investors were chased from this sector such that other could profit. there is an outside chance (very remote) that we are seeing a "weaker set of hands selling into some very strong hands".
As far as a Nasdaq 2000 in June, I want to go no record as to state that we might not even see a sustainable Nasdaq 1900 until 1999. We may be heading into an ASIAN caused and induced world recession. Years of stupid economics with little to no fiscal responsibility on the part of Korea, Japan, and Indonesia as they tried to stretch the envelope of technology unabated and will clear abandon (gov't subsidies) is coming back to disrupt the world economy since a good deal of the global financial community got suckered into these situations.
Andrew
PS-As much as I am trying to shift focus to the Telecom arena, I am not too sure this is even a wise move. The YR2000 stocks look like they have had a heart attack while the biotech stocks aren't to bright either. Oops, I forgot about PLSIA and ATIS. For those of you that thought you missed the boat on these two stocks ($10-$11 PLSIA and $12-$14 ATIS when first hyped), take a look at them now. Same holds true for the PENNIES like BAAT and CSHK, both had a good runs and you could have made money. None of them reached the promised prices or even came close. Therefore, we would have all been left holding the bag on yet another 2 pump and dump schemes. Congrats to those that got involved and baile out at the right time on either of these. Heck, even the big guys are getting the shaft. Anyone know how low INTC will go??? |
