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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: TREND1 who wrote (19618)	3/14/2001 10:56:08 AM
From: Starlight	Read Replies (1) \| Respond to of 60323

>>>.....in comparing the price changes of SNDK and CSCO, remember that a large company with considerable ownership by institutions and funds will usually recover more quickly than a smaller cap company with only modest institutional holdings.<<< Usually is the operative word. I don't think that will work this time, however. Institutions and funds have dumped tech stocks, and they might not be in a hurry to get back in. I think the "pros" are going to teach us all a lesson: Don't "play" on their turf. They're going to show us who is REALLY in control of the market. THEY ARE!!!

To: TREND1 who wrote (19618)	3/14/2001 12:19:01 PM
From: Sam	Read Replies (1) \| Respond to of 60323

Larry, The way you write about Sandisk, you appear to think that Sandisk is the only stock to get slaughtered over the past year. In case you haven't noticed, we have a lot of company. Anyone with half a brain knows that Sandisk is in a commodity business. What we had hoped for was some protection on the downside from patents. And we counted on a steadily growing market for a few years. With the macro environment becoming so sour so quickly, everyone in techland has a problem. I still think Sandisk will grow quite nicely over the next few years, when the macro environment and the inventory overhand clears up. Just when that will be is the question. Sam P.S. Yeah, I wish I had sold more when the stock was a hundred or more points higher (I sold a little). Or even 40 or 50 points higher. Mea culpa. But hindsight is 20/20. Not many people saw this macro environment coming so quickly.

To: TREND1 who wrote (19618)	3/14/2001 2:11:30 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Larry, if most SanDisk revenues come from sale of what is essentially a commodity rather than a proprietary product, then gross margins would be reduced by 20--30 percent. That is, a product covered by patents, and one which can be produced by others only through a licensing and royalty agreement, will generate much higher gross margins. Another way to look at the difference between commodity and proprietary products is to consider the difference in return on assets. A commodity product implies big plants and economies of scale. A proprietary product might generate revenues without any plant or brick and mortar assets whatsoever. To see a dramatic example of the value of proprietary technology, look at QUALCOMM, which has the most extensive portfolio of patents for wireless communication of any company in the world. The significant measurement here is the combined operating earnings plus earnings from licensing fees and royalties per share as a percentage of book value per share. The other factor to note is that if you are a commodity producer, then you better be the low cost producer or you're going to get killed. SanDisk may get some advantage here from its new Manassas, Virginia joint venture with Toshiba, but it can't get any advantage from products coming out of Taiwan, as those factories produce chips for many other companies as well. The advantage of having exclusive proprietary technology is that you don't have to be the low cost producer. You need only produce or let other produce and give you a cut! Art