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Technology Stocks : IBM
IBM 306.70-0.8%Jan 30 9:30 AM EST
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To: THE WATSONYOUTH who wrote (6511)6/28/2000 4:03:00 PM
From: Arrow Hd.  Read Replies (1) of 8220
 
Watson, your points on the comparison of quarters YOY are issues most of us agree with you on and have posted on previously. And certainly I hope you are correct about 160 by year end since that will make a very fine year for me. But you are a bit harsh with regards to Gerstner. He did have to make some very tough decisions early on when he arrived at IBM. Much of the business has turned around in general. The real issue that has not been solved is price attrition. I am not ignoring Moore's Law here. I am talking serious price erosion far beyond normal price/performance curves. For instance, mainframe MIPs sold for 100K per MIP in 1990 and in 1999 they sold for about 3K a MIP. That is radical. I feel far too much emphasis is put on doing deals at any cost to gain share and close business. More emphasis needs to be placed on quality business deals that lessen price attrition. This is really the over-riding issue today and their management does not have the back-bone to deal with it. We all learned the law of diminishing returns in mgmt 101. The business is there and the volumes have increased dramatically in some of the non-PC sectors but pricing is decimated at every corner.
By the way, Watson, you are preannouncing too soon. Wait until December when the stock is at 160 before giving away Gerstner's career plan. Anyway, IMHO, it is Secretary of Education. So I am up one on you now!
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