On May 17th around 2 p.m. a call came in from a friend, he said he had just received a call from his broker, who asked him “what he wanted to do about Facebook’s IPO”.    The response was intricate and subtle;

“wouldn't touch it with a hundred foot pole”

The advice was to consider buying Western Digital (WDC) instead if he had to buy something.    Sensing that the answer may have been a bit curt, the following email was sent shortly after the phone call:

According to a research report published last Friday, Bank of America has downgraded Western Digital from Buy to Neutral, and lowered their target from $54 to $46. In the report, Bank of America said:

"WD reported significantly better than expected F3Q12 EPS at $2.52 vs. our/Street $1.60/1.55, driven by revenue and margin. WD guidance was disappointing (EPS of $2.35-2.55 vs. our/Street prior $2.67/2.30) and commentary pointed to softer demand than expected going forward, at current/elevated ASPs levels, and some pricing concessions (certain HGST customers, pre-acquisition). It appears the HDD industry can't have it both ways for much longer – pricing/margins at high levels, and expected strong demand, with assumed channel inventory refill. We step to the sidelines for now, despite attractive valuation."

We went on to make impressive sounding arguments about sociology like this artifice:

We were going to title this article “We’re so smart”, but we thought that there was at least a small possibility that readers would fail to appreciate the depth of our humility if we did that, so we went with the second most obvious title we could think of.  Besides after SeekingAlpha’s editors picked up our article “Houston, we've got a problem - Bevilacqua” a few weeks ago and exposed it to their 50 million visitors a month by featuring it on “Market Currents”, then selecting it as an “editors pick” once we did finally submit it to on our own, we began to think that our humility may actually not be as secure as we once thought.  

Exactly one year ago, on September 28th, 2010 we purchased shares of Sanderson Farms for investors. Two days later we published our opinion on Amvona in our article "Can you say 'Chicken Feet' in Russian? The case of SAFM and PPC". Three days later SeekingAlpha published the article Here.

We thought we would take a look back at the thesis in that article, now that the period for short term capital gains tax has passed and examine how the issues performed against one another, but also against the benchmark S & P 500 (Alpha).

On August 11th, 2010 we acquired shares of Western Digital Corp. for others accounts at $24.15 a share in the midst of tremendous pessimism about the storage industry.  On September 17th, 2010 we outlined a few simple views that brought about this decision and published our article “640K ought to be enough for anybody…” WDC vs. STX (we used prices as of Sept. 10th, 2010 for the purposes of the article, although the shares were actually purchased on August 11th, as noted in the article itself in reference to “early August”).  On October 1st, 2010 Seekingalpha also published the article here.