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

To: Dave who wrote (26845)	10/16/2004 10:22:36 AM
From: Spheres	Read Replies (1) \| Respond to of 60323

I buy the argument that additional demand is causing the price to rise Hmmm... I go with the theory that the purposeful political destabilization of the oil producing countries creates an atmosphere of fear and uncertainty regarding the supply, and drives the price of oil skyward. Thus, the price of crude is not likely to stabilize until the end of the war is clearly upon us. SanDisk, on the other hand, is doing their part to reduce demand by giving us a format to save and share digitized information.

To: Dave who wrote (26845)	10/16/2004 11:52:14 AM
From: straight life	Respond to of 60323

"Oil's chart looks like a "half-parablola" and it's slope continues to increase... I buy the argument that additional demand is causing the price to rise, but I believe right now there is a speculative frenzy going on in oil." Good post; a number of good points. But while the word "frenzy" bespeaks a mind state wherein mass psychology overwhelms rationality (and to some extent some of this may be going on), I believe that traders are realists as well. I believe that under the surface (in addition to increasing demand) there's a large struggle of price discovery going on. Recall in the spring there were news stories (from Woodward's book) about Bush's Saudi friends (Prince Bandar, if memory serves) promising to open the spigots and flood the world with oil in an effort to sway the election and re-elect him. This story was never really denied. I think the recent rise in the price of oil is the market saying to Saudi Arabia, in effect, "You say you have 2 million barrels a day you can easily add to world supply? We don't believe you: prove it!" The world oil price shoots up; if that draws large amounts of new oil from Saudi Arabia in its role as the swing producer, the price will decline. The futures market is betting that supply is less elastic than the accepted wisdom (and 4 hurricanes sure didn't help). Secondly, notice that oil company equity prices took a real beating this week in the stock markets: the major integrateds, the E & P companies and oil service as well. So the markets are not monolithic. I think the equity markets are saying that high prices won't last. Personally I think it's merely a correction in a bull market; I was buying oil companies. I was also buying SNDK; while I'm generally a growth investor, this was a value decision, it looks pretty cheap here. All that cash, hardly any debt? Please! Not that it won't go lower, but if it does then I'm not done buying.