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Technology Stocks : Dell Technologies Inc.

DELL 127.71

+4.2%

1:30 PM EST

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To: Meathead who wrote (149094)	12/12/1999 3:28:00 PM
From: jim kelley	Read Replies (2) of 176387

Meathead, I believe you are correct in saying that we have entered a speculative bubble. This bubble has been promoted by a lot of companies such as the one Niles work for and is a self fueling frenzy. I got a call from some venture capitalists the other day looking for 1 to 2.5 M investment in a Web based bartering company which is to be a roll up of a bunch of other companies. The allure here is to take advantage of the VA LINUX type frenzy with an IPO next August. Of course they have to have the money by Dec 20---rush,rush, rush... These guys probably also get 10% commission plus 10% warrants as their fees for finding investors for these unknown companies. So there is a lot of incentive to keep the bubble going. So there are also a lot of second and third tier financial people exploiting this market mania. It is very much like a stock price pyramiding scheme. Yes, there is a lot of money to be be made if you are not the last man out! The mutual funds are also playing this game. When the pyramid crumbles there is going to be a lot of wailing and gnashing of teeth. Companies such as SUNW have been promoting their stock price not on the basis of their fundamentals and growth prospects (25% per annum) but rather by selling the notion that they are the backbone of the Web with their Java and Server hardware. Their claim that 75% of web traffic goes through their servers is designed to create the impression that they have 75% of the web servers. The reality is far different than what they are promoting. First they make no money off Java but they do use it to sell Java development workstations. Their workstation business is flat to down. Second, they actually have an installed base of about 13-14 % of the Web's servers. Moreover they are anticipated 25% growth next year. Yet this PR campaign which is reminiscent of the Ekhard's type of campaign has been effective in increasing SUNW's stock price parabolically. Now SUNW's market cap exceeds DELL's despite the fundamentals of the two companies. Meanwhile, long term investors must bide their time waiting for the bubble to burst and for fundamentals (40/50 % growth) to be rewarded. I for one would rather have my core investments be excluded from this Web infrastructure stock bubble. So I believe that the best course of actions for DELL is to stay focused on those four business arenas and ride this market mania out. regards, Jim Kelley

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