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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Bill Zeman who wrote (5189)	3/24/1999 4:26:00 AM
From: Bruno Cipolla	Read Replies (1) \| Respond to of 60323

i believe a big factor in the drop is the lack of institutional selling. Of course i'm holding. i rode it from 10 to 40 (i had call options) and i had a huge strike of luck 'cause my options were expiring in October '97 so i insured myself buying the corresponding puts and made a bunch notwidthstanding the drop after the earning announcement. (sold both 12.5 calls and 37.5 puts) then, when the stock went down i lost some money buying calls that expired almost worthless and then bought stock at around 10 last aug-sep. I also bought some 7.5 calls in november.... If i only had such a luck every time...!! B.

To: Bill Zeman who wrote (5189)	3/24/1999 3:35:00 PM
From: Art Bechhoefer	Respond to of 60323

Bill, If there was option activity last week, it probably would have been the sale of covered calls, a strategy that protects gains in the stock. If this happened, the data on call transactions would suggest to some investors that people were also selling the common stock, even though very few shares might actually be sold. That's why the stock could drop precipitously on light volume. A covered call might expire worthless, at which point nobody knows what if anything is going on with the ownership of the underlying shares. My guess is that the overall weakness simply reflects fears about declining profits in the computer/technology sector.

To: Bill Zeman who wrote (5189)	3/28/1999 9:18:00 AM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 60323

Bill, in another response to your question on book value, note that tech stocks often sell at 8 to 10 times book value, and that isn't considered particularly expensive. I like to buy tech stocks at two to three times book value, but I include in book value and estimated value of proprietary, intellectual property, which often is ignored in traditional balance sheets. Thus, someone with only financial training might think that SanDisk is no great buy, simply because there are so many other tech stocks in the same boat. But when you look at SanDisk's position in flash memories, and particularly the patents covering its technology, the picture is a lot brighter. Unfortunately, most financial analysts really don't know how to evaluate proprietary technology. It's very analogous to what Warren Buffett, the guru of Berkshire Hathaway, says about newspapers. The papers that have no competition in their trade area, he says, are far more valuable than the papers with competition. Seem obvious, but you'd be amazed how many people ignore the lesson. Art