$Sandisk(SNDK.US)

Post 3 of Episode 23

An update on Sandisk

Context: What makes SanDisk interesting to me is that NAND is still a cyclical business — but this cycle may be developing differently. Years of disciplined capacity investment, rising data-centre demand and tighter supply can create an environment where storage manufacturers regain pricing power instead of simply competing on volume.

My trade: I see SNDK as exposure to that potential shift in industry economics. If demand continues growing while supply remains constrained, the upside may come not only from selling more NAND, but from selling it at better prices and under increasingly favourable long-term arrangements.

However, I have trimmed down and might trim further my Sndk holdings for technical reasons one being the time cycle we are entering hence time is of more importance than price here and how price behaves into this time cycle is more important. Hence, I am taking gains and practicing caution here with a view to a re-entry.

Takeaway: Sometimes the investment opportunity is not about discovering a new technology. It is about recognising when the economics of an old one are changing. When something essential becomes scarce, pricing power can become the real catalyst. However, excellent fundamentals do not equate to value. And IMHO, technical analysis provides a good window alongside fundamental valuations for this purpose.

@Captain's Treasure