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 : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (260)	12/2/1998 11:15:00 PM
From: Frodo Baxter	Read Replies (2) \| Respond to of 1989

No need to get your tights in a bunch trying to figure it out. It's pretty basic. Copper, oil, autos, etc. are relatively stable commodity industries, so the dynamics are pretty obvious to all involved. I think I've used the term iterative prisoner's dilemma as a rough approximation. The drive industry is the same, but the stakes are higher. Tech has a secular growth rate of say, 15%. Moore's law dictates 60% yearly improvements. That means productive capacity (GBs per annum) increases at 84% per year. And you wonder why there are boom/bust cycles? What makes this cycle different is that there's too much optimism involved, so no shakeout occured. I wouldn't necessarily argue about credit inflation generally, but the money spent recently to refloat the financially weak players is undoubtedly malinvestment in this specific sector. The refusal to allow these firms to fail will prolong the agony of the industry. Maybe when WDC and HMTT start trading at book...

To: Robert Douglas who wrote (260)	12/3/1998 4:32:00 AM
From: Stitch	Read Replies (1) \| Respond to of 1989

Robert, OT <<It's less frustrating being a Cubs fan than a disk drive investor.>> Not so sure about that. I lived in Chicago during one of the worst sports slumps the city ever had. It wasn't bad news bears. It was bad news everything. The only exception was that one year the Blackhawks battled there way to the Stanley Cup playoffs and I became a hockey fan. I watched guys like Keith Magnusun and Jerry Korab battle it out with opposing team members. I even got to watch Bobby Hull skate before he departed for Winnipeg (one of the stupidest things a Chicago team ever did was to let him get away). A hockey game isn't a bad metaphor for the DD industry. It takes incredible finesse and yet you have to retain a willingness to "drop the gloves" at a moments notice. At such moments finesse has nothing to do with anything. Best, Stitch