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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Bill Fischofer who wrote (11856)	1/13/2001 11:17:54 AM
From: Allegoria	Respond to of 17183

The questions I have posed are more about competition in the relative sectors and market share and less about the technological merits of WAFL & ESN. I have been on the NTAP, EMC & G/K boards for a couple of years now and am well acquainted with the technical arguments set forth. Gus, DS and occasionally you have debated the intricacies of the storage market and the relative technologies involved. In fact I do not want to rehash those discussions. I am querying about something more. You are right of course, no one has claimed it is a zero sum game. Sure EMC & NTAP can both prosper, no one has ever suggested they can't. Can there be a winner in terms of better investment between the two companies? For sure there will be. My questions are intended to illicit an understanding of the potential competitive advantage one company/market sector might have over the other going forward. Incorporation of one market segment of another will have profound implications and it is well worth questioning the possible consequences for our investments. And my questions are not addressing issues of equity valuation. Of course valuation is at the heart of any investment. Valuation is extremely subjective and exactly equates with stock price. In one minute a stock may have a valuation of half its previous value. I disagree with your declaration of a "pronounced valuation correction" because valuation is never static. That is unless you consider valuation as always "correcting". The fact "that NTAP currently trades at more than twice the relative valuation of EMC" says that NTAP is sufficiently "better" than EMC to justify such valuation. Whether you disagree with the valuation is another matter but it nonetheless defines their relative values. If in fact NTAP addresses the market's requirements with a superior product (only part of which is a technological component) then of course it stands a good chance to incur a premium by investors. Maybe even a hefty premium. Also, I am not so certain that what you describe as "valuation inflation" has anything to do with the rise of the Internet, but that is a whole other discussion. Eric

To: Bill Fischofer who wrote (11856)	1/13/2001 12:40:31 PM
From: pass pass	Read Replies (1) \| Respond to of 17183

A stock's price is ultimately determined by supply and demand. If more people like NTAP, think it's nimbler and has faster growth in a explosive market, then they will buy thus keep its PE very high. Historically information technology companies haven't been a major part of the economy. Only until recent 10 years did they become the main driving force for improved productivity.

To: Bill Fischofer who wrote (11856)	1/13/2001 3:57:29 PM
From: Ibexx	Respond to of 17183

Per this week's Barrons EMC should benefit from the recent rise of EURO against the dollar. EMC's European exposure is approximately 26-27%. Other high techs with large international exposure are IBM and INTC, etc. Thus we may see a bit of positive surprise because of the currency factor. Ibexx