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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Jim Stanfield who wrote (24787)	12/5/1997 5:22:00 PM
From: MR. PANAMA (I am a PLAYER)	Read Replies (1) \| Respond to of 53903

Jim razor blades do not cut themselves.....and just curious since you are inclined towards the bearish view....whether you successfully shorted this dog avec fleas...in the 60's...maybe 50's...fer sure the 40's...gotta be the 30's ..25-30....OH NO YOU ARE NOW THINKING OF DOING IT......hahahaha have a great weekend....GRIM (with A twisted neck.....).

To: Jim Stanfield who wrote (24787)	12/5/1997 6:03:00 PM
From: Dr. M	Respond to of 53903

Jim: It is a great and important info. Good luck, Dr. M

To: Jim Stanfield who wrote (24787)	12/5/1997 8:21:00 PM
From: Skeeter Bug	Read Replies (2) \| Respond to of 53903

WHAT IS $0.40 TIMES $20? it is $8.00. hey, i said this would happen when mu was $30. $40. $50. $60. i just wonder what it will take for people to realize they are investing in rotten eggs. they are very slow. but we'll get there. nfli reports next week and i'll have more free cash to put into this bowser.

To: Jim Stanfield who wrote (24787)	12/5/1997 8:56:00 PM
From: ratan lal	Read Replies (1) \| Respond to of 53903

Jim << Raymond James decreased estimates for quarter ending 02/98 from $0.41 to $0.03 on 12/1/97 >> 1. Raymond is an optimist. 2. I received this via e-mail from my brother who works in the storage field. i presume one could find the URL. December 4, 1997/FOOLWIRE/ -- Western Digital's (NYSE: WDC) decision to restructure announced on Monday was for many investors only the latest in a series of horrors heaped upon them in the past few weeks. The company will now not just shift away from thin-film inductive head drives, but it will reduce desktop and enterprise disk drive production, end notebook and laptop drive production, and accelerate even further the transition to magneto-resistive (MR) head technology. Industry-wide oversupply and irrational pricing have blown away an investment thesis that seemed inspired only three or four months ago. Whether or not an investment thesis remains in the tattered wreckage of Western Digital shares is the question that many investors are now asking. The relative stability the industry had enjoyed has now been completely devoured by market share hungry Korean and Japanese manufacturers. While Seagate (NYSE: SEG), Quantum (Nasdaq: QNTM), Western Digital and IBM (NYSE: IBM) still hold more than 80% of the market, Maxtor, Fujitsu and Samsung are aching to take share. Even with Singapore Technology's Micropolis unit shutting down operations forever, there is still much more production capacity than available market share, meaning there are more price cuts to come. While Western Digital's decision to focus on desktop and enterprise drives is perfectly rational, it is one of the few rational events going in an industry that has gone nonlinear. After three years of relative pricing stability, all hell has broken lose. If history is any guide, this will not be fixed very quickly. Western Digital's situation appears to be similar to that of Micron Technology (NYSE: MU), which entered 1996 with an unprecedented three years of pricing stability in the memory market. Unfortunately for Micron, that pricing stability was destroyed when Korean and Japanese memory manufacturers initiated round after round of profit destroying price cuts. Although Micron's strategy was to be the low-cost producer in the trailing-edge technology as opposed to Western Digital's strategy of being the low-cost producer in the higher-margin areas of the business, the model still holds. In retrospect, the mistake investors who were bullish on Western Digital in May and June (like myself) appear to have made is that they did not apply the pricing stability thesis as rigorously as it should have been applied. For Western Digital to continue to earn excess returns on capital, industry pricing had to stay rational. The first hint of pricing irrationality in late September should have inspired more than caution -- it should have violated the thesis. For Western Digital to earn excess returns there had to be absolutely zero tolerance for pricing irrationality. Once Seagate proved that there was oversupply in the channel and that pricing irrationality was the only response, investors should have recognized that the thesis no longer held and should have developed a new one -- or sold. For investors who had the tenacity to short the shares on expectations that pricing irrationality would eventually return, their thesis appears to be vindicated. Although certainly no one expected the Southeast Asian currency crisis, an exogenous event that would impact the market as a whole was long overdue. By playing the percentages, investors who were short Western Digital did quite well. Investors who appropriately assessed the risk levels and made sure to buy Digital or its storage brethren at ultra-cheap valuations given the inherent low-margin nature of the business have not been totally crushed, but investors who did not exercise valuation discipline have learned a painful additional lesson -- in the end, price matters a lot. Looking forward, investors will probably see Western Digital pushed to massive new lows in the coming three weeks due to tax loss selling. Individual investors were large holders of the shares and the degree of loss has made it an attractive tax loss selling candidate. If today's loss on no news is any indication, Western Digital will likely see $16 by the end of the year -- only to recover in early January. With Western Digital at 0.43 times trailing sales and sales potentially falling to around $3 billion in this fiscal year, the price/sales ratio low of the last three years of 0.24 has not even been hit. However, given that this is the counter-cyclical moment of maximum pessimism, if investors have decided to maintain their position despite the turmoil, they may want to indulge in a bit of creative tax accounting and sell to capture the tax loss and repurchase 30 days later. ANYONE heard of foolwire. Is it the same guys that publish the fool's portfolio?? ratan