and anybody that thinks that dell doesn't do a 30% correction in the future.. Dell may correct 30%, more like 10 or 20% at some time, but it's not going to happen this year, unless the bubble bursts in Oct. (I don't believe there will be a crash in Oct, but the market did rise steeply just before the crash in '87 just as it's rising steeply now. We'll know better as we get closer. The market does look too strong for this to happen, but, regardless of Steve, I do believe there will be a pullback in the latter half of Oct, but that it will climb high in the first half, until the week of Intel's earnings report.)
Dell will continue to rise strongly through the rest of this year, at least. While I do agree that increasing competition and sheer size are going to limit Dell's growth, as they inevitably must, Dell is still the darling of the investing community and will continue to have momentum. The problem with predicting any decline is that you don't know when it's going to happen. Dell might have a 30% drop. It might drop from $300 per share all the way back to $210.
An article in Forbes magazine that appeared in about Aug, 1995 talked about all the reasons why the computer industry was going to decline and that investors should short it. We all know what has happened since then. While some of these factors will become true at some point in the future, there is no way to quantify it, and say it's going to happen on this date. These things take time before they have a noticable effect, and Dell will certainly change strategy as things change, so Dell will probably adapt successfully, anyway. The fact that they're now getting into the consumer market shows this. I've been saying for a while that the consumer market is the largest market, and that Dell was making a mistake by not getting into it, but now Dell is focusing on it more. We can sit here and argue continually, but until these factors have an actual impact on Dell's earnings, Dell will soar. As long as Dell maintains earnings growth AND it doesn't issue any major warnings, and the market outlook is positive, Dell will continue to climb. And right now the market mood is extremely positive, and we're coming into Dell's strongest quarter for corporate sales, so there is no question in my mind that Dell is going to have another spectacular quarter.
It is pointless to argue too far into the future. No one knows what's going to happen in the next couple days, let alone months or years. So why belabor the issue. Dell will continue to climb. You don't have to believe it, just watch it. |
