William: I live in Germany, and I can tell you that the Dell guys in Frankfurt report that they can't keep up with the orders, especially for Latitude NBs (on which this note is being written). Second, the S&P upgrade will help the stock at these levels. Third, Dell's future earnings will continue to be fueled by the server market more than home PCs (see the most recent 10Q). Fourth, the Verity survey also noted that there was an UPTICK in the number of consumers who plan to buy a computer. Fifth, Elaine Garzarelli's comment that Dell is "undervalued." She may be right or wrong. The fact of the matter is, people listen.
General comment: The question with Dell is, as always, what is the downside risk? I agree with much of what you've said in the recent past about the market, the summer slowdown, etc. When all is said and done, the tale of the tape Friday was all you really needed to know. If Intel-- which has not forecast weak earnings in the entire lifetime of most fundmanagers -- can't bring this market down, nothing will. I continue to believe that this market is driven by two things, and two things only: interest rates and psychology. The economic reports show no inflation, and the psychology of this market is perfect. We live in an era of fully-invested bears. Even if Dell does correct, it will only be an opportunity for Rosemary and I to buy more.
Love your posts, especially the tone!
A final question: "Do you ever sleep?" |
