"OEM customer demand in the last month has not been as strong as we anticipated."
Those 15 words in the second paragraph of
disappointing prerelease this morning will rock the world of computers today.
I know, why should we listen to chronically underperforming Western Digital? Why should we trust them with anything?
The answer is that while Western Digital's stock has certainly stunk up the joint in recent memory, Western Digital, the company, is an honest and fair barometer of the PC industry. The management has outstanding credibility when it comes to telling the truth about demand.
That means we may have to be worried -- as if the
and Taiwan news didn't shake us -- about personal computers until we figure out what caused the slowdown in demand.
Was it that July and August were so strong that companies misjudged demand and built too much inventory? Did Y2K cause people to order aggressively earlier in the year borrowing demand from the third and fourth quarters?
Has the consumer slowed? Whatever.
The Western Digital comments are worrisome and will not be dismissed out of hand by nervous portfolio managers with big gains in tech.
I know what I will be working on all day.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at