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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: slob who wrote (2339)	5/20/1998 1:33:00 PM
From: jgercke	Read Replies (1) \| Respond to of 5944

Slob, My problem is not whether I can live with volatility (I do and like it), and not whether high tech is the right investment for me, but whether ADPT is the right investment for me at this time. Having said that, I think that most of your analysis is essentially correct and that ADPT may have lost its historical pricing power, thereby bringing into question gross margins, etc., and its "strangle hold on a given niche." Which brings me back to my point that I am unable to assess the reward/risk in this position. There are too many unknowns relating to the new business model for me to have any sensible idea what I think the company in worth. Since I try to avoid the "crapshoot," "bounce back," "what goes down must go back up," etc. styles of investing, I am therefore unable to solve any basic investment equation for ADPT at this time. It wasn't too long ago that APM was thought to have thin film cash cow that would shelter its transition to MR technology. That turned out to be wildy optimistic. Though I don't equate ADPT to APM in terms of financial strength, historical performance or management ability, the point is that product transitions are inherently problematic and unpredictable. What I took away from the conference call was the sense that Adaptec's SCSI hegemony might not be as durable as I previously thought, and that there were no miracle short term cures likely to arise from the new technology initiatives. Shortly thereafter I contracted ADPT investment indigestion. Hanging out waiting for more clarity in these matters may seem a passive investment style, but in the absence of a rational upside or downside target for the stock it's tough to construct a reward/risk model, which for me is a sine qua non of investing. jg