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

To: Pierre-X who wrote (7520)	11/12/1997 7:26:00 PM
From: Herb Melcher	Read Replies (2) \| Respond to of 11057

Pierre- you summarize the pros and cons pretty well. I have been in and out of both WDC and APM several times this summer and fall. Luckily I was out of each when recent sharp decline began. I bought back into WDC late this afternoon at $19 3/4. Nobody knows whats going to happen with respect to competitive pressures, pricing, etc. but I have faith that WDC will rebound because: 1. Most important - excellent balance sheet, have resources to weather the storm. 2. They are forecasting $.20 to $.30 in coming quarter (before possible charges). I am betting they will make their forecast and improve somewhat, possibly slowly, over the following quarters. I think they have an excellent chance of earning $1.50 or more in next four quarters, with lots of potential beyond that which should give then a PE of at least 15. I don't think they will go much lower. 3. Demand for drives is strong, and in my opinion is likely to remian strong. 4. WDC is a low cost, highly efficient producer, although may be encountering temporary problems transitioning from TFI to MR. 5. WDC has a reputation for quality products and good service. I can't see name brand box manufacturers putting a lot of questionable quality drives in their boxes just to save a few bucks. I think the Fujitsu threat is overblown. Analysts opinions are little more than guesses at this point. Use your own instincts. Good luck.

To: Pierre-X who wrote (7520)	11/12/1997 7:32:00 PM
From: Thomas George Warner	Respond to of 11057

Peirre i think that you convinced yourself, and I could not have done better. The only thing that I could add is that WDC is further along in the enterprise market than you suggest. I believe they started shipping in June 1997 and will be fully up to speed by 1/98 if my memory serves me right. another point " before you jump off one high speed train to another, make sure that both are going in the same direction". that in point if you were to sell WDC and APM what would you invest in to realize the same potentional 3-5 year return???? I always have a stock ready to invest in when a situation like this presents itself. In this situation I cannot find another, and it would be foolish in my opinion to sell and go to cash. I put a lot of stock in valuelines analysts and they still have WDC listed as an outperform (2) over the next 6-12 months, with an annual total return of over 30% a year. After taking this big a loss can't imagine what else I could invest in to recover my loss as quickly. The wild card of course has been the asian market as valuline detailed in their October 24, 1997 ratings and reports. I do not think that it will be a significant factor after the middle of this month. If I am right the christmas season will quickly pull everything together. In this situation I am not sure that rational minds are an assett. the market is crazy and moving very fast. good luck

To: Pierre-X who wrote (7520)	11/12/1997 9:23:00 PM
From: John Wang	Read Replies (1) \| Respond to of 11057

Pierre-X: <<1. WDC is behind the technology curve. By their own admission they were last to transition to MR products. This worked to their advantage last fiscal year but in the last CC WDC said they plan to accelerate transition to MR due to the pricing pressures>> A lot of people have the same misconception as you do. WD may be late for MR transition. But, their first MR program that the management said would ship 1.5 million this quarter is not behind those from either SEG or QNTM. As a matter of fact, it is at the forefront of disk drive technology (except IBM). This drive has 2.1G/platter, 9.5ms average seek time, Ultra DMA (33.3M). Please go into QNTM or SEG websites and look for similar products. If I did not read it incorrectly: QNTM will have drives of similar specs in January 1998. I don't know when SEG will have it. In SEG's medalist UDMA series, 9.5ms seek time products up to 6.4GB, they use up to 5 platters to achieve the same density as the same WD MR products with 3 platters: medalist 2122 (2.1G, 3 platters), 2532 (2.5G 3 platters), 3232 (3.2G, 3 platters), 4342 (4.3G, 4 platters), 6451 (6.4G, 5 platters). Who has the cost and technology advantage? John

To: Pierre-X who wrote (7520)	11/13/1997 12:23:00 AM
From: Berney	Respond to of 11057

Pierre, Let me try. I've got friends into thousands of shares of WDC. Started buying in July at $34 and wasn't smart enough to sell the end of August when all my technical indicators said to do so. I've found that the biggest damage I've done to portfolios in the past was to panick by reacting to the short-term news. I listened to the cc over the weekend and was impressed with the mgmt of this co. At least they recognize the problem and are working on it now. Whereas, Friday QNTM puts out a release saying it is not our problem. Who are they trying to kid? WDC mgmt didn't have to make this announcement 5 weeks into the quarter and I respect them for doing so. The quality of mgmt is of paramount importance to the long term success of an investment. But, I still say it would have been cheaper for SEQ, QNTM and WDC to each offer Fujitsu 1% <g>. I have this little formula that is from Benjamin Graham's book [The Intelligent Investor]. Even with all the recent downgrades, folks are projecting (by my computation) average EPS this year of about $1.96. Using this formula gives WDC a fair market value of about $58. I sit here and hold, the bulk of the damage has been done, and when I perceive the blood-letting is over, I'll buy some more. Berney