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

To: Art Bechhoefer who wrote (24309)	12/16/2003 10:03:21 PM
From: Road Walker	Read Replies (4) \| Respond to of 60323

Art, re: It is altogether likely that one or more analysts determined to publish statments designed to drop the price of the stock, both to make money on its fall and then to reinvest in order to make up for their LACK OF VISION earlier in the year when the shares were more reasonably priced. Come on. The stock was up 400% in a short period, another double would have made it 800%. SanDisk was priced for a perfect scenario, otherwise why was it trading in the $20's eight months ago. It isn't like flash and digicams and cell phones were invented in the last eight months. Art, you have to grasp that the flash market is a commodity market. It's not rocket science, the last guy to build a fab buys the most efficient equipment and process, and has the lowest COGS. Once supply and demand are in balance, the guy that is willing to settle for lowest gross margins determines the market price for everybody. I don't know what is happening wrt supply growth v. demand growth. But the perception is what matters, just like oil futures. The perception is that a lot of powerful manufacturing companies are going to be producing flash or more flash next year. SanDisk was priced at current earnings growth performance, based on a shortage market, if that is in question, people/institutions are going to sell. As you have pointed out many times, SanDisk does have competitive advantages; their royalties, their management, and their presence in retail. But they are not in any way immune to the market and gross margins drive everything. If the smart money is wrong, and demand grows faster than capacity, then there is or will be a hell of an opportunity with this stock. I just don't know how you determine that until the money flow reverses. It's not the analysts, it's the collective wisdom of the market. It's seldom wrong. John

To: Art Bechhoefer who wrote (24309)	12/17/2003 1:06:08 AM
From: Rob S.	Respond to of 60323

This says to me 'never let your eye off the ball or the big picture'. The 'ball' is the deterioration in the stock price when near it's highs - when SNDK broke support it was time to take profits or seek puts to protect investments. I wasn't in the stock near the top - had owned it three years ago but sold well before it made it's major move up. But I did buy some a couple days ago thinking that it had found support at around 60-65. Ouch. The big picture is that as the price of Flash memory goes down it will find many more applications and sell in higher capacities. That is true for memory in general but because of the versatility of FLASH is particularly the case. As the price continues down storage applications should explode. Not so hard to figure out because it's already happened to some degree. But I think we have only see the distant tip of the ice burg. High bandwidth wireless, both short range stuff such as WiFi WLANs and UWB and Bluetooth PANS and long range wireless including WiMAX and Wi-Mobile (or whatever name will be given to 802.16a and 802.20) will help to create a new range of mobile devices that are more capable and need much more memory than current products. This will also spur new uses for cameras and video, all which can use more memory. So, the great fear is that this is becoming a mature industry with commodity pricing and limited growth. While this is largely a commodity product business, something investors should never lose sight of when they bid any tech stock to high levels, this industry is far from being mature in terms of applications or growth prospects. I'm sure that Sandisk will surprise the ANALysts when they figure out that some new applications are on the horizon and that competition won't be nearly as bad for business as now perceived. Just about the time that all this new capacity is expected many new uses will start to emerge. Kick the ANALysts to the gutter who issue buys after stocks rally and spread fear after stocks have already plummeted and investors are cowering.