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

To: limtex who wrote (26830)	10/15/2004 6:50:29 PM
From: Art Bechhoefer	Read Replies (3) \| Respond to of 60323

Limtex -- "AAPL could make a solid state Ipod." If so, it would use flash cards and add to demand, which in turn could strengthen prices. After seeing today's retail sales figures, I am persuaded even more than before that higher prices for gasoline are eating into consumer disposable income. That's exactly the condition that could keep SanDisk and other companies dependent on consumer demand under pressure. The analyst community likes to look at gross margins. But I think that the overall health of the economy is far more important at this stage. I was very discouraged today to hear Alan Greenspan declare that high oil prices won't have much effect on the world economy. What's he been smoking? He needs to take Economics 101 again. His view, if one reads between the lines, is that it's okay to allow crude oil prices to remain around $54 per barrel (and natural gas over $7/mmbtu). This apparently is the administration view, and the view of many of its supporters, particularly those in the oil exploration and production business. Here's my conclusion: Continued high energy prices will undermine economic recovery in the U.S. and overseas to the point where companies that make consumer durable goods will suffer. That includes SanDisk, but doesn't mean SanDisk is a sale. When over a third of a company's stock price is cash, that's hardly a sell situation because it tells you that the downside risk of holding SNDK shares is relatively small. If it looks like holiday sales are strong, we could see a recovery to the high 20's in January. I don't expect more than that until oil prices return to the $35 - $40 level. Art