VENKIE, I think Dell is a fine stock, but how much return do you expect Dell will bring you in the next 1-2 years? Dell is doing about 7% Quarter to Quarter growth, which is about 32% annual growth rate. It will take them about three years to double rev and net incomes. At current P/E of 50. I don't see long term, how can Dell keep the stock price of $100. Plus, in bussiness world, things change so fast, who know if PC market will be doing good next year. The problem with Dell is that they don't have any control of the market, anybody can get hot if the market happens to like their way of selling PCs. Dell was doing great with direct sells, but everyone is doing that now, where is the advantage of DELL? Now, sub-1000 PCs get hot and DELL is not even in that market, who knows if this is going to be a trend. Dell got the last trend when everyone else missed (direct sell), now, do you think DELL will be missing the next trend?
I think we have to admit that DELL is in the hands of those momentum players now, it is played not based on its fundamentals any more, any arguments on the end is useless, it is pure momentum. I am not saying DELL has lost that, it is very hard to predict the top. But I think for long term investers, there are plenty of stocks to get a better return in the future than DELL. But for day traders, momentum traders, DELL is a perfect candicate to trade. |
