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

To: Art Bechhoefer who wrote (27048)	11/29/2004 5:49:51 PM
From: Dave	Read Replies (1) \| Respond to of 60323

Art, I'm having difficulty trying to find safe places for my money as the dollar loses value. I think hell just froze over -- both of us agree! I'm not even sure about the mattress As long as you don't smoke, all you have to worry about is the silent killer, i.e. inflation. Best regards, Dave

To: Art Bechhoefer who wrote (27048)	11/30/2004 2:07:15 AM
From: Sam Citron	Read Replies (1) \| Respond to of 60323

Art, It is true that an exporter will be hurt by a rising domestic currency because price will become less competitive while foreign exchange earnings will translate into fewer Korean won. PKX exports only about 25% of the steel it produces. The rest of it is consumed at home in Korea, where GDP growth and steel demand is quite strong while pricing, of course, is the best it has been in many years. The Korean won has risen sharply against the US dollar and therefore against the Chinese yuan, which is tied to the $, but only slightly against the Japanese yen. The best company will be the lowest cost producer in the cheapest currency theater. If X can get its costs in line with PKX, therefore, it could become quite a dynamo. as for SanDisk, will a higher valued Korean currency make Samsung flash memory more expensive, giving SNDK an edge? To the extent that Samsung exports flash from Korea to USA, a stronger won will force Samsung to lower the price of its products more than usual in order to remain competitive with American-made flash. Furthermore these American sales will be translated into even fewer Korean won, so there is the old double whammy effect on profitability. If your currency is strong and you are selling to a worldwide market then you really need to be a very low cost producer in order to compete, whereas a weak domestic currency could temporarily mask a variety of sins. So as far as currency fluctuations are concerned, the recent weakness of the $US against the Korean won should help USX compete against PKX and SNDK compete against Samsung. However, I believe that Samsung has a fab in Austin and SNDK may have interest in fabs in Japan, so it can get quite complicated. Since almost all of these commodity industries tend to operate on a global scale, and currency winds will blow one way and then the other, you are better off focusing on those companies that are managing to lower their costs and creatively expand their markets. I believe that both PKX, Samsung and SanDisk are all doing quite well at this, hence I own all three. As long as the decline of the dollar is gradual, I think things will probably be alright. But if the dollar falls out of bed, things could get out of hand. I think these are times when a conservative investor needs to diversify - by industry, by country, and by asset class. Commodities should do quite well over the next several years. However, tech commodities are a bit like ripe bananas. They don't age very well. Samsung enjoys economies of scale and scope that SanDisk cannot compete with. I think that SanDisk has to look into its soul to find its areas of competitive advantage and focus on these core strengths. SanDisk Photo Album arrived in the mail today from Circuit City. I loaded my new 1G SanDisk flash card into the rear slot where it should be able to store 20,000 photos optimized for TV viewing. We all enjoyed a slide show of shots mainly of the kids. For now, it appears that it has solved my wife's desire for a simple means of archiving and displaying family photos. Rotating images is a bit of a pain so I will need to experiment with rotating and modifying those images before I put transfer them to SPA. I am also looking forward to seeing how easy it is to integrate the slideshows with music. Regards, Sam