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Bonnie, I like the Jan puts on Dell and Compaq, and I'd probably go
with 50s if I was just starting a position today. It may take until
the Christmas season for the funddumbs to see that all is not well in
PC-land and for the Japanese to make real inroads. The computer
retailers is one I've only played with Microwarehouse, and that was
more of a special situation than a retailing play. Here is my problem.
Computers are selling and will be selling. What won't be happening is
selling for a price that makes money for the pc mfrs. Just like in a
gasoline war, the sales go up in units as the price per unit falls to
a level that is breakeven at best. That is the scenario I see taking
place. How do the retailers do in that situation? I don't really
know, so I'm just avoiding them. If they make the same profit margin
per unit sold, they could print money. But, if they are stuck with
higher priced inventory when prices are slashed, they could get their
heads handed to them. Now, some games can be played where they return
higher priced boxes to Hewlett while buying cheaper ones from IBM, or
any names you want to substitute. But the boxmakers won't fall for
that old trick for long. So, I have no idea what will happen to the
retailers. Historically, they get creamed. But this time could be
different. MB |
