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Technology Stocks : Dell Technologies Inc.

DELL 128.38

+0.6%

9:30 AM EST

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To: SecularBull who wrote (33586)	3/10/1998 12:54:00 PM
From: Jim Patterson	Read Replies (2) of 176387

Ok Guys, One last Comment before Lunch. CPQ's inventory and INTC's Inventory problems are due to capacity out striping demand. Right now In the Oil market, Over supply is driving down Prices. I know oil and PC are a terrible analogy, But if my Econ 101 Professor was right, All other things being equal (I hate that phrase) Capacity to produce machines in units and revenue has out paced demand growth. This is leading to a classic over supply situation at CPQ. In order to alieviate the supply, prices will fall and capacity utilization will fall also. We know Cap Uit is related to net margins, and CPQ is expected to have none hence the break even quarter. This appears to me to be an industry wide situation. CPQ's problem is just the most obvious and the first to show up because of their large inventories. (that I said they had, but no one believed me in early January :) If I am incorect about the appearance of an industry wide situation, then the DELL bull have nothing to wory about. Any Comments on this one ? Jim

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