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Technology Stocks : Dell Technologies Inc.
DELL 138.940.0%Dec 5 9:30 AM EST
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To: Lee who wrote (32615)3/6/1998 3:36:00 PM
From: Jim Patterson  Read Replies (2) of 176387
 
re: I guess I don't understand your point and since I'm not an economist or financial analyst, I can only understand things in the context of ROE.

Stick with what you understand.
Just keep in mind, throughout history, different measuring sticks have been used to judge appropriate valuations.

You make a good point on the intangibles, intellectual stuff, disserving some credit. Of course I could probably real off a bunch of companies that have lots of intellectual property that carries very little value, but I won't do that.

Where BV really comes in, This is not going to happen, This is only for example sake. Lets just say Dell's revenue dropped by 50% and stopped growing. The company is loosing lots of money every day and quickly runs out of cash, because it spent it all buying back shares 50-90% higher than it is now. The company is bankrupt. What do the shareholders get after all the debts are paid?

Sell off all of the assets of the company, including intellectual property if anyone wants the IP of a bankrupt company. The total should add up to 50%to 75% of what BV is now, and give it evenly to the shareholders.

This is a very extreme example and I am only using it to illustrate my Point.

Jim
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