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Technology Stocks : Seagate Technology

STX 261.38

+1.2%

Nov 17 4:00 PM EST

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To: secrus2 who wrote (6987)	3/3/1999 11:45:00 AM
From: Sam	of 7841

"If DDMs have been selling well who have been buying well ?" Even though the Pc and the DD sectors are interrelated in obvious ways, they are NOT identical. The former can be in a [relative] slump, while the latter may be healthy at the same time. And the opposite--the latter may be in an unhealthy state with the former going well (which was pretty much the situation last year). The reason is that demand is only one side of the equation, the other being (drum roll for Econ 101) supply. If the participating companies in the DD sector collectively want to make money, and they are at approximately the same place technically, then they will make money. They will simply adjust their production to whatever the demand is. This is easy to do as long they cover their fixed production/factory costs and relative market shares are in synch, and the participating companies are happy enough with their share. If they are at the same place technically, but want to increase market share more than they want to make money (e.g., they may wish to squeeze a teetering competitor, or they may believe that their longer range success will be greater with more market share), then the sector won't be healthy.

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