Kemble,
Fully understand what you are saying about Dell and valuation. However, the valuation that you presented is what I'd call a qualitative, not quantitative valuation. No doubt in my mind that your qualitative valuation is correct. However, the Street goes by qualitative valuations, and many other factors, in determining what a stock's price should be. Given this, Dell is going down as we speak, and on pretty good volume.
In the long term, Dell will be ok. However, not this year, and next year is questionable. There are to many unknowns in the world, such as the terrorism issues, that have a major impact on the markets.
By the way, Dell had better be very cautious in how they enter the printer market. With pc sales down, printer sales are also down. Also, it's a low margin business, except for the toners and inks. For Dell to sell toner and inks, they have to sell through retail stores, and this is a new area for Dell. Selling inks directly may not be very successful, as must people just run down to their local store when their ink cartridges run out of ink.
Larry |
