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Technology Stocks : Deswell Industries (DSWL)
DSWL 3.410+3.6%3:58 PM EST
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To: Michael Burry who wrote (1204)2/14/1999 1:37:00 AM
From: Ron Bower  Read Replies (2) of 1418
 
Mike,

I have added to my core position each time the market has offered me a buy opportunity and I see no reason to change this strategy.

Again, after I take off my rose colored glasses I see that Deswell has been straight forward with us. They told us that Mita sales would halve into January, we knew that Namtai would be down 25% or more, we were told that Kwanasia and Kwanta were having problems. Put this all together and one could have predicted this Q. I was so used to Deswell exceeding expectations that I created an unjustified optimism.

Someone on the Yahoo thread said it's like Michael Jordan scoring 20 points in a game. You can't believe he had an off night that bad because expectations for him were so high. Deswell has finally had a terrible Q. Will it repeat? Possibly. Is it a sign that they will continue to have poor earnings? Not likely.

Jetcrown seems to be doing fairly well. As I said, they wouldn't have ordered the new machines unless they felt they would be needed. I see little improvement for K&K because their sector is so competitive. I'm sure they are doing what they can. Remember, it was K&K driving the 1998 growth.

Each must make his/her own judgement on this, but I expect at least a 20% compounded annual earnings growth from Deswell over the next 5 years with a major portion of that coming to me in dividend.

FWIW,
Ron
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