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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: LK2 who wrote (1358)	10/26/1997 11:31:00 AM
From: Z Analyzer	Read Replies (1) \| Respond to of 9256

<<Page 30: A different hedge fund that gives a much more complete argument, with details, why PC (and component) stocks should be avoided. This is the article that really counts, and that should be read by anyone interested in the PC industry/sector. 1. The PC market is saturated, so unit growth is slowing. 2. The average selling price is dropping. 1. The sub-$1000 PC for the consumer market has had explosive sales growth. 2. Now the business market could be the next area where the sub-$1000 PC growth expands. There are a lot of details/arguments given. Whether you agree with the arguments or not is up to you, but anyone invested in the sector should read the article.>> Some good logic for shorting the box makers and Intel (only problems is you end up shorting Dell and CPQ and Intel which are some of the best run companies in the world). He seems to paint with a wide brush in including the disk drive companies, gets a few of his faqcts wrong (such as Quantum having had reduced earnings expectations), talks mostly of the US retail market which is only 15% of PC sales, seems to believe that 1 GB disk drives are adequate for low end PCs and conveniently ignores what the $1000 PC will do for worldwide demand. He doesn't address the fact that its a major positive for drive sales if box makers have to sell twice as many $1000 PCs as $2000 PCs for the same revenue. I would guess he's not currently short the drive stocks based on his poor grasp of some of these facts.