Markets are too tricky for even the best of fortune tellers and quickly turn on even the best of the best companies. This is why analysts and fund managers like franchises. Virtual monopolies give these guys a feeling of safe money. These guys have not digested the block buster advantage direct customer contact gives Dell, and that fortune telling has been replaced with real customer data. The second half of this equation is response time to product on the shelf, which includes minimizing inventory inertia of product siting on shelves. Dell has done away with the security need for protected markets.
What Meathead has done in his piercing posts is to show that the money is there to be made in hardware. I would like to add that as information gets cheaper that demand for it gets greater, faster than available people. Efficiency in people will become the real measure of the limit for growth for modern companies (the ones that survive and grow). Here Dell excels over its competition by two to one. In this train of thought I would like to give folks another competing view to the cell phone theory, and that is the cable TV vs the TV. Why haven't TV's become free? TV is just a display. Businesses will be looking for how to acquire efficiency of people, so is a cheap display and machine the direction they will go? You figure it out.
In regards to Dell's price, Dell selling his stock, etc, every fool knows that investor perception is not controllable by even the best manipulator long term (when it comes to money). Dell has reached a bottom here in the mid thirties, even I know that. Everyone here even the shorts know that Dell is going up from here at the rate of 40% + improved investor perception.
After being beaten by the analyst's forecasts for the next quarters earnings for the last year, I am no longer working my tail off to duplicate the work. In looking at their numbers and Dan Niles chest beating over cheap PC's, Dell is still a bargain. For longer term outlook I am in the Kemble camp of trust the Dell team for delivering earnings growth an investor can be proud of, and navigating troubled waters to deliver products from leveraging their core business, based on timely, real customer data. Tea leaves in the next millennium are best in a good cup with hot water, real, timely data from real customers is where the cash is.
Cheers
Mike
reference posts: Meathead #135423, #13544, #13548, #13549 |
