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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas George Warner who wrote (7436)	11/11/1997 10:07:00 PM
From: Glenn D. Rudolph	Respond to of 11057

Thanks for the compliment Glen and don't take all of my previous post to seriously... maybe just tongue in cheek. Just trying to make a point. I took the contrarian viewpoint on purpose. T.G.W. I knew what you were doing. The fact remaines you pointed out the sector cycle. The techs all cycle to over reaction in both directions. Most are now wounded but I believe and hope the worst is over. Our investment styles are different as you and I have hashed out in the past. I am more voulernerable to large swings due to my selling of naked puts and you have the opportunity to average down. Time works with you and against me. The end result is what matters. Can we make our strategies work? It is very difficult to see the cycle coming and this time more than ever. The Asian issue blindesided me. I missed all the ramifications when it was occuring. Oh well...I learned again. Good luck with your added WDC. Glenn

To: Thomas George Warner who wrote (7436)	11/11/1997 10:16:00 PM
From: cfedd	Read Replies (4) \| Respond to of 11057

long topic just got it..gang i hope this will help!!!By James J. Cramer You can slam biotech on the Internet and everybody cheers. You can badmouth chip stocks and people don't bat an eye. But if you put the knock on storage stocks you can expect a firestorm of criticism from Netizens, particularly of the Motley Fool variety. What a shame that is. Because after four years of virtual Cinderella status, these stocks are back to their stepsister roles in the stock market pecking order, and it's not a pretty sight. I got news for you drive traders and "investors": There's no glass slipper coming at you any time soon. For most of the 90s these drive stocks have been nirvana. We've seen Western Digital and Seagate and Quantum act as if they have proprietary high-margined products. We've read that these companies have taken control over their own industry and smoothed out the pricing and ended the vicious competition that used to cut their margins to pieces. The ancillary plays -- the Applied Magnetics, the ReadRites, the Hutch's -- even carried a premium multiple to the market for a couple of quarters, as if they determined their own destiny. Heck, you'd think you were investing in Bristol Myers for all of the adherents these guys have in the chat rooms. Now we are seeing the other side, the dark side that has been kept hidden from us by incredible demand for storage as well as an industry consolidation that knocked out weaker players and left pricing power in the hands of the majors for a couple of years. That benign pricing environment is now history. Now we are seeing the same sort of fragmented trading that was the hallmark of the Conner Peripheral-Maxtor-Micropolis years, where each quarter brought a new blow-up and you made more money shorting these stocks than going long them. Monday was no different. There was a sense that after a preannouncement by Western Digital these stocks were safe to buy. We now know, from looking at where Seagate and Western Digital are trading, that a preannouncement no longer means the risk is taken out and it is time to buy again. Far from it. A preannouncement is a warning that things are getting worse, not better. And judging by how much APM fell Monday on RDRT's preannouncement, these stocks are still in the wrong, hot hands. I have some advice for you new-timers, guys who just started trading in the last few years and have a portfolio full of drive stocks: Go back to the charts, the ten-year charts. Take a look at what happened to Seagate and Western Digital peak-to-trough from 1987 to 1994. Do you know how many times I tried to call a bottom in that period, only to be met by enfilading fire from sellers from God knows where? Don't believe me? Think their cash positions are better now? Their managements better? Sure, they probably are, but when a group does the old death spiral, can't you wait until the body is cold before you start picking? I know exactly what my e-mail box will read like for the rest of the day. My mail will be the same as when I slammed the Asian markets Monday. "But Seagate is down 60% from the high, and Western Digital is down 50% from the high. How can we not buy?" My response: So what? I can't think of a worse way to invest than a rear view mirror perspective, looking at where stocks were and predicting that they have to go back to old highs, like some sort of ineluctable yo-yo. Hey, maybe Seagate should never have traded at $58? Maybe Tokyo should never have traded at 38,000, for that matter? Those prices weren't validations of net worth or earnings. They were aberrations not to be seen again any time soon. This "it's got to trade back to where it was" logic is just another version of "Lord get me back to even." It repulses me in stocks just as it repulses me at the Blackjack table. Don't succumb to false logic. Deal with reality. And please, stop listening to the analysts and the companies, particularly when it comes to their wild-high estimates for '98 that make these stocks look so gosh-darn cheap on a multiple basis. Some analyst who should know better called me last week urging me to buy Quantum at $34, saying "Quantum's not in trouble," just Seagate and Western Digital. Oh please, give me a break. Nobody is insulated from a price war. Nobody. There, I just paid for your lifetime subscription to TheStreet.com. ***** Random musings: Readers, please spare yourselves the aggravation. I am not going to respond to e-mails like "is Global Marine okay here?" or "what do you think of Micron?" I can do it in a chat hosted by someone else in front