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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Michael Burry who wrote (2655)	12/5/1997 12:21:00 PM
From: Stewart Whitman	Read Replies (1) \| Respond to of 78580

forbes.com Yes, I do agree that Quantum is the pick of the bunch. And I'll admit that the shift to thin clients will actually be much slower than many expect (anyone buying into a thin client company can attest to that). I'm not saying that hard drives will fall off the earth - just that it has the potential to become a negative growth industry in terms of revenue/net income. The Forbes article seems to imply that Quantum is the only source of media. That's not true - Maxell, Fuji among others supply product. A little deceptive is the capacity (70 GB is probably the compressed format - 35 GB is native). In this respect, the current DLT technology is more of a medium-size backup media. Sony's AIT tape drives should compete with Quantum's DLT, and Sony's technology is more advanced in some areas. Also, Sony has published a long term plan to increase capacity. Still, the market for tape products should remain robust. I've heard estimates in excess of 30% CAGR for this type of tape drive. And Quantum is certainly well positioned. But the question remains whether a disk drive business shrinking at say 5 to 10% a year, can be overcome by a tape drive business expanding at 30% a year. Don't get me wrong, there's a price at which Quantum would be attractive to me, and it's not too far below the current price. I just see a lot of uncertainty, and think that the mutiple at which I would sell would be lower. Stew

To: Michael Burry who wrote (2655)	12/5/1997 3:18:00 PM
From: Jurgis Bekepuris	Read Replies (2) \| Respond to of 78580

Michael, Thanks for your QNTM DLT analysis. I don't disagree with your approach, though I would not add anything for QNTMs DD business at this time. I would caution that 50-100% DLT growth won't continue indefinitely. Do you follow other tape drive companies (EXBT?, HWP?, MMM?) and their progress in the area? I will be watching the DD companies and might buy at some point. If you follow QNTM thread, you'll find enough bulls there. I think that you have one of the better approaches to the DD area. The mindless approaches: "It's going out of business - SELL!", or "It's WAY undervalued - BUY!" do not work. I've been through semiequip downcycle, where ASYT and AMAT yielded 4-5 baggers while TRKN and SUBM were victims. I've looked at the networker drop this spring where BAY and CSCO came back, but SHVA did not. Finding winners in a cyclical drop is difficult, unless you buy acknowledged leaders that are almost never cheap (CSCO, AMAT, INTC, MSFT). I am a little frustrated with the monthly trading necessary with tech stocks. I am starting to appreciate Buffett's buy-and-hold of great companies. The tech stocks are no buy-and-holds - with very few exceptions like CSCO, INTC, MSFT. Here is my latest tech stock investing approach: If you ask yourself, "Should I sell?" - You should. If you ask yourself, "Should I buy?" - You shouldn't. :-)))) It works even better if you elaborate: If you ask yourself, "Should I sell to take a profit?" - You should. But what if I miss the BIG run-up? - You won't. - Leave 50 shares in a sock. If you ask yourself, "Should I buy?" - You should... 20 points lower. But what if I miss the GREAT BUYING OPPORTUNITY? - You won't. - Wait. Even GREATER BUYING OPPORTUNITY will happen in... 3 months - Buy 50 shares and get a night's sleep. :-))) Good luck Raimondas