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Technology Stocks : Dell Technologies Inc.

DELL 133.73

+2.5%

3:59 PM EST

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To: Chuzzlewit who wrote (148466)	12/4/1999 12:19:00 AM
From: Mike Van Winkle	Read Replies (1) of 176387

Chuz re: Focusing on margins is really pointless. This is true for Dell because they don't build the product until the actual user orders it and they have payment in hand. For manufacturers that indirectly sell to the user, inventories are required (either in their own warehouse or the retailer's warehouse). To manage these inventory levels, forecasting is required. The problem with forecasting is no one knows the future. So, small margins are ok for Dell as they do not need to forecast, but for those manufacturers that do require forecasting, small margins will inevitably result in losses. That was the under belly of the 4% margin for CPQ. Sorry for the long winded explanation. Mike

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