Dear Dale:
My good friend, how are you doing? Hope you are not too deepressed with all the losses in your short position of SUNW at $68/shr. Are you still short SUNW, or did you short more at $93? Are you planning to short more? How is your short position of ORCL at $35/shr going? Are you planning to short more of ORCL?
In any event, you state:
> What makes you think the stock will stay in the 90's.
Well, I guess my reasons are the same reasons that tells me there is absolutely no way on earth, heaven (or hell for that matter) that you will see SUNW in the $60's again, unless the board of directors decide not to do a 2-1 split till SUNW hits $120/shr!
You ask:
> Do you think INTC blowout earnings will cause investors to be concerned about SUNW?
Well let me do the following Q&A!
Q: What does INTC manufacture?
A: Chips used in building PCs
Q: How well did Intel's earnings do?
A: Great! In fact it beat the most optimistic numbers!
Q: Who buys from Intel?
A: PC makers such as DELL, Compaq, Gateway 2000, Joe's PC factory shop, etc.
Q: What does Intel's great earnings report translate into?
A: That PC makers such as Compaq are facing an extra ordinary demand for their PCs, especially since they started selling directly to the regular consumer market.
Q: Why PC makers (such as DELL and Compaq) selling directly to the consumers are facing this huge demand for PCs?
A: In addition to the huge growth in the ecommerce, regular consumers are dying to be connected to the internet and since they can not do it in any other way but via PCs, the demand for PCs has risen dramatically.
Q: What does this desire to be connected to the internet mean?
A: In short the internet computing model via thin client/server centric architecture is growing explosively.
Q: In this new server centric architecture model who gains the most with the highest profit margins?
A: Those that make the servers.
Q: Who is leading in the server marker?
A: Sun Microsystems. But it really does not matter. All server makers are facing huge demands for their servers.
Q: What can we conclude?
A: That Sun Microsystems will have a blow out quarter, and hence the current valuation of the stock continues to be extremely cheap.
Q: What should SUNW longs do at this time?
A: Just relax, sit back and take advantage of any dip to buy more of SUNW shares at these prices.
Q: What should SUNW shorts do at this time?
A: If they have not covered yet, they should start praying to God to send them the wisdom to give them the power to overcome their egos and cover as soon as and as quickly as possible before they lose everything they have!
I hope this Q&A session answered all your questions and concerns.
Regards,
Addi Jamshidi |
