>I'm so frustrated, I made so much money and am now
>losing it all!!!!! Someone help!!!!
This is what happens when the bull market turns into bear market. The kids who grew up in the bull market still have their "buying on dip" habbit intact which will drag them down even further. The "buy and hold" strategy that worked so well suddenly turns into "hold and lose". Most don't know what hit them, because they psychologically blocked out that possibility that they are in bear market now.
As for Dell, the warning has been all over the wall. Gateway lost money and now Micron told the world that things have changed. Yet, in this thread, I see that everyone is steady fast holding on to fond memories of the days when Dell was 103. Dell was 103 when there was no threat of collapsing Asian market or the threat of slowdown of the US economy, when the threat was inflation not deflation.
I myself did not realize the change of current while I was going long on WDC (Western Digital). I ignored every warning sign and in the end I got burned. Looking back, the signs were on the wall. The disk price was getting cheaper, competition was coming from overseas with their devalued currency thus with deflated prices.
Exactly the same thing is happening to Dell. The price has dropped below $1000 a unit. Sure, the component prices also dropped but the very reason it dropped is because the box makers were squeezed tight. Sub $1000 was not Dell's idea. It was Compaq's, and only Compaq was ready to deal with, as Gateway's first red ink attests.
Sure, Dell is the most efficient and cost effective company. For the same reason, how much more can they become cost effective in this world of ever-lowering PC prices? The curent stock price was built on the assumption that Dell could keep on trimming the cost and making more profit. I am afraid the pricing pressure is harder than the rate of their rate of further cost-effectiveness.
Yes, I am short on Dell. And let's see what happens on Tuesday morning.
James Choi |
