Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Tom Simpson who wrote (3080)	4/27/1998 4:39:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 9256

Tom: First let me add that in as much as I wish it was all due to the currency thing, I do realize that reality probably precludes that from being 100% accurate! As I have mentioned "probably all fiction". Second yes WDC was caught in a product transition minefield. But Lynch has oft repeated the theme about "top notch management in crummy industries". Well DDs are a crummy industry. However re: WDC mgt., while doing my little bit of Due Diligence on DDs (or DDDD) I noticed that WDC seemed to have a very high ROE, debt/equity brought down to zilch, very high productivity / employee and steadily going up, what looked like a successful transition to a pure DD company from 5 years ago, a concern for shareholder value, stock buybacks, insider buying etc etc. I'm reasoning that this mgt. team is still around and whatever rabbits they pulled out of the hat in the 5 years leading upto 1996 they can pull out once again. We shall see. If it is entirely a product transition issue then I am set. And WDC is golden. On the other hand if it is something more problematic and fundamentally wrong then the stock will be road-kill and the Maxtors of the world will rule. Again time will tell. Shane.

To: Tom Simpson who wrote (3080)	4/27/1998 4:52:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 9256

Tom: RE: I do think you are correct that the bloom is off the semi's , equipment guys, and disk drives, for a while anyway. Thats what happens when Asia gets capacity indigestion. On the good side, despite appearances, I don't think the demand trend for storage shows any signs of easing up. Heard much about diskless NC's lately? The bloom is off virtually all in the semi-equip sector, the bloom is off most of the semis but definitely not all (the internet and anyone who makes networking and communications chips are golden), and disk drives may be recovering much faster than I had hoped for. On the last point, the relevant one here, this is my hope for markets with few large players and a faster recovery cycles than my other favorite commodity item - namely DRAM. If not I still have more than 16 months remaining to be proven totally wrong. My feeling hinges on the hope that the currency effect did play a role (yeah I know...) and product transition bumblings and stuffed inventory channels and one-time JIT inventory model adjustments are not irrecoverable disasters. Best of all there are also rumblings of a pick up in PC demand. (At some point price-elasticity has to kick in. Don't ask me about profits!) NC's - a buzz word for another hyped up dream for the demise of WIntel. Will succeed in specialized markets and with the price for PCs coming down those specialized markets are shrinking daily. However big picture - COO for PCs is high and someday far in the future when we have fat bandwidth and Java is then as commonplace as Windows is now (like I said FAR in the future) NCs will be everywhere. In the meantime what we will see are Information Appliances and their ilk proliferate. I think the picture in Asia is improving even if it is marginal. I hope that the worst nonsense is behind us. But I am too micro to make sense of macro-trends to even bother to hazard a guess about what will happen and when it will happen in that neck of the woods. Sometime someday the bottomless pit of losses in the HDD will end. Hopefully soon. But not betting either way. Too early to be of too much relevance financially to me at this point. Nevertheless, it remains very interesting to yap about the timing... True growth stocks who needs 'em - cyclicals are where the true fun really is. :-] Shane.