The key point about the analogy to Walmart is this:
Like Walmart Dell has identifed a basic trend that is
sweeping the industry and is sweeping the weak and small
players out. Walmart: efficiencies of massive buying
power, larger store space > cheap rent per sales dollar, etc.
I.e., a cheaper general model that little guys can't
compete with. Dell its obviously direct channel.
However, the interesting part of the analogy is that it
goes further. Walmart didn't just have the right general
model --- it was WAY ahead of its other large store competitors
in executing on it. Like the Dell situation, it took years
of Walmart hyper growth before most observers recognized this -
i.e., that Walmart really had something big over K-mart et.
al. that had the same general channel model....
Walmart was MAJOR computerized early on.... Tracked inventory
like no one else. What sells where, management wants to
know NOW....
Dell has implemented just in time supply chain software to
speed its inventory turns (and hense reduce its effective
overhead costs per unit shipped) to the highest level in
all US industry, from what I can tell. Certainly very, very
high. They are an incredibly sucessful executor. And
Micael Dell is as smart as them come, as agressive (and even
younger) than Bill Gates, and no doubt hungry for a similar
level of national recognition.
My bets on him.
But yeah, I'd still sell near term at a price. My 12 month
forward model on Dell says 90-95 is stall out price very near term,
but
on this one, given all, I suspect its a bit higher. Probably
I'll start to set 5% under stop losses (actually preserve
massive gains) when it gets there and see how she runs.....
At this level, I think its at least as likely to go up as
down. I remember at around 120 she'd trade down 10 points,
in a couple of days, then right back up, down again, then
start rocketing again.....
But you know something. I'd love it if the bears could start
a run down on Dell and she's down post split to 10-20 points
from here. I'd double up and make that much more $$$.
(Course if I could predict it, I'd sell first, then rebuy.......) |
