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9:00 AM EDT, Friday, September 18, 2009: STEC dropped a whopping 17% yesterday.

The catalyst was a partly negative (and confusing) eight-page analyst report by Betsy Van Hees of a small brokerage firm called Wedbush. She wrote "While we maintain our Outperform rating on STEC, we are reducing our PT (price target) to $39 (from $45) following our recent round of industry channel checks that indicate the competitive landscape in SATA/SAS enterprise SSD (solid state drive) market is intensifying above our previous expectations."

Yet, she points out that "(our) checks indicate Q3 is tracking ahead of Str. (street) and our estimates driven by continued strength in ZeusIOPs (an important STEC product). Although we recently increased our Q3 estimates primarily due to higher than expected shipments of Mach8 to IBM (one of STEC's key customers), our recent checks suggest that Q3 is tracking ahead of the Str. and our pro forma EPS and revenue estimates of $0.47 and $97MM, respectively, driven by strong demand for ZeusIOPs."

You can read the rest of her report here.

Some odd aspects to this:

1. She confuses SATA/SAS -- one market the company doesn't play in (SATA) with the other (SAS -- serial attached SCSI) the company does play in.

2. The analyst wrote the report without contacting anyone at the company. A reputable analyst traditionally runs their ideas by the company to check their facts and get their reaction. The analyst doesn't have to accept what the company says. But it provides a reality check.

3. All the vague alleged innuendoes about future competition (see the report) are actually well-known, and in fact, old news.

4. There is huge, new competition in solid state SATA drives for laptops and PCs. Samsung/Corsair is selling them. I have one in my laptop. I recently wrote about it. I love it. But this is not a market that STEC plays in.

5. The company's stock is heavily shorted -- presently about 25% to 30% of the float. Funny thing is that the company's stock has been almost as heavily shorted as when it was $5 -- early this year. The shorts have been seriously hurting.

As you know from yesterday's column, I sold half my holdings when I saw this:

And yesterday as it fell, I dumped the rest. (I did not lose money on STEC.) I sold for two reasons:

1. Clearly, the negative (though flawed) Wedbush report was having a major impact.

2. STEC is thinly traded. A single report from a tiny firm wouldn't impact a Microsoft, or an Intel.

Will I buy STEC back? Frankly, yes. At what price? I don't know. I'll watch it today. I hear there's a positive JPMorgan report out this morning.

I like the company. I like the management. The founders are still there. I love the publicity which SSDs are getting. Education is what this market has needed. It wakes IT managers up to the awesome benefits of SSDs. I love the SSD in my laptop. Education should benefit STEC mightily. The vast bulk of STEC's potential market -- all those drives that hang off enterprise servers -- are still the slow, platter drives. 90% of STEC's sales go to five companies -- EMC, IBM, Sun, HP and Hitachi.

Frankly, I don't like focusing so heavily on one stock in this column. But STEC has fascinated me for one huge reason -- the stuff it sells portends a major revolution in the computer industry. I've been through many of these revolutions in the past 30 years. There are always huge profits to make. Remember Microsoft? It was a booming stock, once.

Technology is, once again, booming on Wall Street. But technology is fickle. And the one lesson I take away from STEC is what God giveth, He can take away very fast. I was right to get out with that weakness. Someone clearly knew that Wedbush report was coming and traded on it. You have to keep a close eye on your tech stocks.

Now look at Apple -- another stock I've been pushing. This chart popped into my email last night:

Silicon Alley Insider commented, "Apple shares closed up 4% today, peaking at a new 52-week high of $182.75. Why? Kind words from CNBC's Jim Cramer last night, and a Needham & Company analyst this morning, who jacked his price target to $235.

It's been a heck of a run for Apple, whose shares have more than doubled since January, shortly after Steve Jobs announced he was going on medical leave. Since then, the momentum behind the iPhone -- and speculation about Apple's next product, a tablet computer -- have driven shares skyward.

The stock is now within spitting distance of an all-time high. (Microsoft, meanwhile, trades at about one third of its own all-time high.)

Rosh Hashanah is Jewish New Year. It begins tonight. You should wish your Jewish friends:

SHANA TOVAH , which means they should have a very Happy and Peaceful New Year.

According to the Jewish calendar, the year is 5769.

According to the Chinese calendar, the year is 4706.

This means that the Jews went without Chinese food for 1,063 years.

In Jewish history, this period was known as the Dark Ages

Rosh Hashanah is a major Jewish festival.

Jewish festivals are typically characterized by three pieces of "logic:"

1. They tried to kill us.

2. They failed.

3. So, let's eat.

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.