kemble, RE: the conspiracy
All these institutions that have been buying over the past few months (and there have been many) have been buying stock primarily form other institutions. For this conspiracy to happen, some people would have to be 'in' on the game and others would have to be left out. And institutions that I would consider very 'wired' have been sellers, such as Spear Leeds, Lincoln Capital, Brown Brothers Harriman, First Quadrant. Certainly there have been sophisticated buyers also over the past few months, such as Janus, Alliance, and State Street. But to think that Janus knows something that Spear Leeds does not is not logical. In addition, the firm that is probably the most wired on the Street when it comes to information, Gilder Gagnon & Howe, has no long position at all in DELL. If there was something going on, they would be participating, IMO.
The performance of DELL has been directly related to performance that is lower than expectations. If you go back to 1997 or 1996 and look at the earnings estimates at the beginning of the year, you would note that the analysts were usually about half the actual year end results. When 1999 rolled around, people had the same expectation that the average estimate in the range of 72½ to 77½ would be similarly low. As it turns out, DELL most probably will be in the lower end of that range when Jan '00 earnings are announced. The company has underperformed expectations, and the stock has reacted accordingly. |
