Barron's brings this weekend an interview with
Neil Druker, a money manager who likes M-Systems
(FLSH), with whom I agree, and who also recommends to
short Radware (RDWR), one of my holding. On Radware, I
think he is totally wrong. His reason is too simple:
Cisco bought RDWR's competitor, ArrowPoint, and that
collaboration spells the end of the world for RDWR. Sorry, Mr.
Druker, but this is the same story I heard two years ago
on Check Point Software (CHKP), i.e., "Cisco bought
its competitor and CHKP is a great short". Well CHKP
was $30 then and now it is $320 (pre-split adjusted).
Mr. Druker is wrong for the same reasons investors
were wrong on shorting CHKP. Both have great
technology and products, a fast growing market and great
CEOs. Druker forgot that RDWR has a "small" distributor
called Lucent (LU) which still competes against CSCO. On
the other hand if RDWR is in trouble I guess it soon
will be on the block for sale at not less than 3 times
the present stock price. So short it only if you want
to lose your shirt.