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

To: Pierre-X who wrote (8165)	12/11/1997 4:05:00 PM
From: Harry Stein	Read Replies (1) \| Respond to of 11057

Pierre-X, nicely said, lol. There was a question as to how low it will go? Since it is almost certain that the DD's will have a period at zero profit, one has to look at the chart for technical resistance. I place that at 12-13. There is little doubt that it will hit that. Best of luck. P.S. I'll be helping to support the price at this level(12-13).

To: Pierre-X who wrote (8165)	12/11/1997 5:07:00 PM
From: still learning	Respond to of 11057

Wonderful parable. Does this mean Asia-based silismurf will exit the industry or continue to try to wreak havoc for the next year? Inquiring minds want to know.

To: Pierre-X who wrote (8165)	12/11/1997 8:49:00 PM
From: Brian Lempel	Respond to of 11057

Gosh Pierre-X! SILISMURF sounds a lot like our friends at Samsung. I am boycotting them, and telling whoever I meet to do the same! Join the campaign buddy. The problem as I see it is the latest round of currency hits will further strengthen their viability. My new theory is that we will only begin to see improving fundamentals when the Asian currencies start to swing back in WDC's favor. Until then, there will be further price cutting as Samsung and Fujitsu can continue to lower prices (gaining market share), but not hurt their margins. IMO, the time to buy is when the currencies begin to turn, which would be way before analysts realize what it means for the industry. Brian

To: Pierre-X who wrote (8165)	12/12/1997 12:52:00 AM
From: Rational	Read Replies (1) \| Respond to of 11057

PX: I was tempted to add to your nice story the macro-finance ramifications that SILISMURF or its banker or the banker's banker (the cebtral banker of the country) was unable/unqualified to forsee because of an aging financial system. [Finance is not like manufacturing the other stuff.] SILISMUF became very highly leveraged with government-sponsored bank borrowing and the banks raised huge amounts of capital overseas at cheap dollar-denominated rates. [Their leverage is 3:1 (debt:equity), on average as compared to US's 1:1. SLISMURF is nearly 100% debt!] When the country's currency got devalued 30 to 50%, the "cheap" cost of finance became HUGE and the banks, central banks and the country all became bankrupt. [IMF is charging 18% and higher and forcing the CB to raise rates!] Now, you need to add the labor cost to the HUGE cost of capital. The thin profit margin that SILISMURF hoped to lock in suddenly evaporated and the company has to close business because of lack of technological innovation and profitability. This is good news for US DD makers' future, very good indeed. The market is beating tech sector that depend on sales to Asia (due to currency devaluation), but US DD companies buy cheap labor there (as cheaply as SILISMURF) because plants are located there, but now have a very fair advantage because SLISMURF's cost of capital has suddenly risen, astronomically (about 3 times on 100% leverage) and technological innovation thwarted. [Why is S Korean market getting down 6% a day? Think about it!] This is the time to pick US DD sector stock as per my rational analysis. I am not a long or short in WDC, just liked to add to your nice story! Sankar

To: Pierre-X who wrote (8165)	12/12/1997 1:43:00 AM
From: Craig Freeman	Respond to of 11057

Pierre-X, great Harvard Business School analysis. IMHO, the answer is to differentiate your product through marketing. Silismirf products are promoted as better, more reliable, faster, tastier, more hip, etc. The other guys' products are portrayed as somehow deficient and/or defective. You then RAISE your prices as proof that your product is best and pay stores the difference to put your products on the front lines (spiffs, co-op ads, etc.) Spend enough ad money, fast enough, and your competitors are meat. Craig