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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: James F. Hopkins who wrote (39682)12/30/2000 11:38:44 PM
From: Jack T. Pearson  Read Replies (1) of 42787
 
I agree about the coming price wars in PCs. When sales of PCs dropped off unexpectedly before Christmas, it left a lot of the PC companies with too much inventory in the channels. Remember when Compaq stuffed their channels with inventory a couple of years ago? It killed their profits and the stock price for more than a year. Also, Intel is planning to push the Pentium 4 hard this year. If the PC vendors don't get rid of the Pentium 3 inventory soon, they won't be able to give it away. The PC companies with the most inventory in their distribution channels are likely to be hurt pretty badly. I expect Dell and Gateway to suffer the least, since their business model allows them to keep their inventory low.
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