++Every one of your valid points have counter valid points. This could go on and on. It's all OPINION>
1. Economy deteriorating
-factored in (EMC down 40% for 2000 highs)
-Others say the ecomony has bottomed:
"With an improvement in both investment-grade and junk-bond spreads vs. Treasuries, there was a surge in corporate-bond issuance in January, boosting companies' reserves. The Fed cuts also have led to a burst in mortgage-refinancing activity in January." Souce Street.com
-Retail sales were higher in January were better than forecasted.
-The most recent employment report was much stronger than expected.++
The recent employment report was over because of good weather in Jan. creeating consrtuction jobs. We'll have to wait a few months for the picture on that to be clearer. Today, the manufacting sector went into it's 6th straight month of decline-recession. You didn't site that satistic.
Down 40%. well, I have thoery-
In my opinion, the real high on the Nas was 4000, not 5000+, Because, the period between 4000 and 5000, was pure MANIA-straight up, no rationality to it whatsoever. Remember it? We went from 4000 to 5000 in about 9 days, I think. There was no sanity during that period. I just don't see it as relevant to valuation. I realize I'm probably the only on who sees it that way.
EMC's high I sort of see the same way. the upper price ranges to me are irrelevant. People were desparate to put their money somewhere and EMC, JNPR,etc, seemed like good bets. So they temporarly bucked the trend.
++2. EMC is not the only company that makes storage. There's lots of competition and they can replicatate each other pretty damn fast.
-What's your point? No one ever claimed they had a monopoly.++
Right-no monpoly. Lots of competitors. No company will have their way for long. No company can name their own price either.
++3. Just how much storage do you really need? I spent about 2 hours the other wiping off all kinds of crap on my hard drive- it really piles up. Always think I'm going to need it.
-You don't get it. When you start wiping off your network files, you will be at the tip of the iceberg. Of course by the time you reply to this post, you will have added memory to storage.
I didn't say to wipe off essential file dimwit. When I cleaned up my hard drive, I didn't delete Windows98. Just crap.
I bet I could store the entire 100 year financial records of Coca-Cola in a shoebox or two with JAZ disks
++4 It's overvalued. LOL
-Maybe, time will tell. Many say the high PE is acceptable, of course you won't find it on this board.++
No I won't find on this board-- that's why it's such a great short! If reality were at play here- I would not be able to short this. Thank to so many niave, inexperienced, greedy, and plain stupid people, this stock presents a wonderful oppertunity for a short position.
* I remember digital watches used to cost $500. Now at flea market there $1.50. etc etc
yearh, yearh, heard all that, in 1995 storage sold for $3/megabyte, now it is a few cents, and EMC has more market share now than then.
Work that one out.
when, one day, some-one manages to replace the round brown spinning stuff with some new technology there may be an order of magnitude change in the cost, but untill then it will just creep down as drive improve.
Just another little point to ponder, EMC is reputed to be the biggest buyer of hard drives in the world, that probably means that they get them cheaper than anybody else.
* I hear DELL and others are already active into this market-they got good management, too, all that stuff-they'll do well.
Margins will get crushed and profits will thin out and this company will (eventually) come to it's true valuation
How much do Dell know about the IBM mainframe market - oddly enough it isn't dead. Bet you didn't know that, but your local friendly bank and airline, financial company, hotel chain, rental car company etc still use them, quite a different architecture about which Dell know nothing. Ever heard of the AS/400, the system that stopped IBM going under in the late 80s that is a major storage market, then there are all the dot coms that are running Unix on HP and Sun servers, Haven't seen too much of Dell there either. They may do well in the NT server market, that obviously runs on PCs and is largely commodity based, I expect that they will take some of Compaq's share.
* Yes, they have to keep data-but how what data? Do they have to save every keystoke ever entered? The IRS only requires me to store 7 years of records.
That is a lot of data these days, and they dont put it in shoe boxes under the bed any more. The more picky that the lawyers get, the more data that companies have to keep to cover their asses.
* Zip-ever hear of .zip file? You can compres files. And, I'm sure there will be other programs created that will even futher compress file even more-if they really need to keep the stuff.
Umm yes, in the 30 years that I have been in the computer business I have come across the odd zip file, and yes it is common practice to compress data, but there are limits. If you dont mind throwing some of it away as with .jpg files, you can compress 100x or more. The law however does frown on the selective throwing away of data, and lossless compression will get you a 60% compression on a good day.
* All they sell is a fancy hard drive, with some microprocessors attached to it. These can be replicated very easily. A competitor just has to get one, and tear it apart and copy it-no mystery this.
You really do know absolutely nothing about the products in the market do you? The hardware is nothing, all the smarts are in the internal code. IBM, Hitachi, EMC etc have casts of thousands writing and improving this, and if you think that it is easy to replicate, then you are welcome to try, I await your appearance as an EMC killer with baited breath.
* After all-SUNW isn't the only place you can buy a server.
True, HP will happily sell you one, but no-one around here seems to have heard of them.
* WesternDigital isn't the only place that make hard drives.
Also true, Seagate, IBM, and Fujitsu all sell more drives in this market than WD.
++* There's lots of competition and they can replicatate each other pretty damn fast.
Learn something about the business, replication is not that easy++
Zip-there has never been an electrical gadget that has not been commoditized (that means it gets cheap).
I remember digital watches used to cost $500. Now at flea market there $1.50.
My first inkjet I paid about $1200. No color-black & white.
Yesterday, I was in the Rite-aid drugstore. They got a color inkjet there for $39. nice little unit.
My first computer was a 386-cost around $4300. Remember when those came out? It was BIG DEAL.
Junk- gave mine to the Goowill couple years. See them at the flea market for $5 now-no takers.
I got my 450mhz w/DVD player at Office Depot for $399. Good computer.
Compaq, Dell, Gatway have 3% margins now. E-Machine has about a 1% margin. Those used to be MUCH higher at one time. We all used to believe that computers were immune to commoditization and would always be a high margin item. Now, just go to WalMart and pick one up.
EMC will be no different. There's way to much competition for them to be the big shots for long. A sI said earlier, these machines are easily duplicated- I hear DELL and others are already active into this market-they got good management, too, all that stuff-they'll do well.
Margins will get crushed and profits will thin out and this company will (eventually) come to it's true valuation.
be down 10 already. But since the FED is easing we see buying. Look for a higher low(today,tomorrow) when this phase of profit taking is over to confirm that we are at the beginning of another bull market. Remember higher highs and higher lows means a bull market. Don't fight the FED.
Thank you for your wisdom. Meanwhile, back on earth, the prospects for EMC's stock price are looking dimmer and dimmer. Bullish statements about the storage market and what a leader EMC is just don't cut it at these multiples in this environment. Forget about it.