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No. of Recommendations: 8
JIM CHANOS: 'If I Had To Pick One Short, It Would Be Seagate'...

Thanks, Mr C!
Added a pinch yesterday. Hope the dip grows legs and the worries drag on for years.

He's probably right in the broader sense that there will come a day that nobody
builds memory devices with moving parts. We differ merely on when that will be.

But I'm not so sure about the bit "The move to the cloud is actually more efficient...
The amount of storage out there still exceeds the needs as fast as data is growing. In short, no one needs hard drives anymore"
.
I'm agog at this statement. Aggregate storage demand is rising at over
25% a year despite falling currently falling PC sales.
Somebody should tell him that not all hard drives are in PCs, nor are they empty.
Those digital photos sure do seem to pile up no matter where they get stored.
In short, the global storage demand side is spectacular and will remain so indefinitely.
The guy isn't a very good bear.

The sensible bear questions are the evolution over time of:
(1) rotating media market share in global storage
(2) breakdown of company market share within that
(3) areal densities which will determine unit counts, and
(4) company margins.
Probably the weakest link in the bull case is #4. Imagine some really
dumb company in China (or Korea or Japan...) with no understanding of ROE and access
to unlimited quantities of cheap capital deciding they want top market share.
Just one aggressive competitor with more money than brains can ruin your day.

Jim
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