SANDISK was indeed a HYPE stock. Buy when the price is ultra low ---- $25

It was a pity that we did not continue shorting SANDISK stock, but it was fortunate that we did not buy it too.

SANDISK stock was hyped, see the previous SANDISK POSTS: http://tradedragon.blogspot.com/search/label/SanDisk%20SNDK

The entire CHIP market is doomed again as the price of chips keeps dropping. This is one disadvantage of technology stocks. Their margins are always getting smaller. However, there are some like INTEL that actually go higher, due to synergies. However, in the long run, tech chips prices will drop. Only demand will allow CHIP companies to profit.

In such an environment, investors have to be careful in buying technology stocks as ANALYSTS love to give them extremely bullish and overpriced + high PE ratios, aka pumping them. It is true that most technology stocks have high growth due to the transition to this techno era. Hence, this high PE is actually acceptable too. But be careful in choosing the type of tech plays here. Analysts are usually only concerned with high sales figures and the constant growth, however, in most cases, technology is cyclical, the bullish run may end really soon. 2009 was the start of the technology cycle, and it usually last about 2 to 3 years. Currently, the market is showing a correction in the technology cycle, however the rally hasn’t stop here. TECH will continue to grow in this 3 years cycle, and there are many opportunities to be made out there.

SANDISK is a buy again at $25, this is pricing a low 8X PE given the volatility that SNDK will experience due to its cyclical nature.

Better tech stocks are INTC, IBM which has fewer competitions. SNDK has too many competitors including MICRON, SAMSUNG, HYNIX, and many more.

NOT A SHORT recommendation. Waiting to buy at ultra low prices.