How about selling everything and waiting???? What about holding just CPQ and DeLL???????? Sell the rest
Hi Kemble,
That's what I did since last Friday. In fact I bought more CPQ today. I think CPQ & DELL shareholders do not have to worry about today's market crash.
CPQ and DELL are leaders in the PC business. That has been shown from the IDC report. Both companies' exposure to the asian market are minimal at best according to my opinion. CPQ has 15% exposure to the Asian market including Japan, while DELL has 7% exposure to the Asian Market excluding Japan. It is true that sales in the region will slow considerably, however both companies' market share here in the US are getting bigger by eating HWP, IBM, SUNW, GTW, and MUEI's lunch and dinner. Another thing to remember, CPQ and DELL both have assembly facilities in those South East Asian Countries, as well as Japan. In other words they will enjoy lower cost of goods sold. For example, All of DELL Note Book computers are made in Taiwan, from a factory call Compell (ask Investors Relation if you don't believe me on this one). So if the Taiwanesse Dollars devalues DELL's cost of merchandise will also becomes lower.
Q3 is the best quarter for DELL, and Q4 is the best quarter for CPQ.
I do not see the any reason why CPQ and DELL stock price will not shoot up in the next 3 to 6 months.
Indeed, today's dramatic crash really hurt us who are long. But let us give those bears their last dance before they went out for their regular Winter hybernation.
All of us here who are long on CPQ and DELL will have a very merry Christmas, and also a very happy New Year. Look what happened after the market dropped in April.
On the other side of the coin.
Of course, I could be wrong. We could be witnessing the seeds and the starting point of world wide economic recessions, which will ends up in a world wide economic depression. (Global Economic Melt Down).
All other countries in the world are experiencing some sort of economic difficulties, especially in Europe, except for us here in the USofA. For example, unemployment is so high in France that makes the French government lower the working hour from 40 hours to 35 hours per week, and decreasing the retirement age to 55 years. This is a ploy by the French government to reduce unemployment by spreading existing jobs for more people and make them retire early, instead of implementing strict and dicipline fiscal and monetary policies.
In fact current global currencies crisis started from Europe with their crazy and idealistic EMU (common European Monetary currency). This EMU thing is a disaster in the making. For example, in the past the Bundest Bank (Germany Central Bank Forgive my spelling) can issue bonds and set it's own rate. with the EMU five years from now the rate will be determined by the Central bank of the common European central bank in Brussels Belgium. So European bonds will become less competitive, and unattractive for big institutional investors like insurance companies, and big pension funds. Do you want to buy Germany's 30 years bond, if you know that within five years the Bundest Bank will be gone. Another point is when you buy a European coomon bond, (you take the reliability of German's Economy, but you also carry the default risks of countries like Portugesse, Spain, and Italy).
So what will those big European institutional players do? They send all of their money here into the US capital Market. The result is US Dollars keeps on stronger by the day. Now the Tigers, and Little Tigers of Asia cannot catch up with the increasing US Dollars. Their Main source of capital investment is from Japan, and Japanese economy is in a doldrum for as long as anyone can remember. (Capital inflow from Europe to USA is bigger than Capital inflow from Japan to those Tigers) speculators see the opportunity and act on it, and there goes my Mercedez Benz its gone in one day. All of my call contracts are almost worthless now.
Wish you luck, and May God help us all tomorrow.
Bye. |
