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Technology Stocks : Dell Technologies Inc.
DELL 122.70+0.2%3:59 PM EST
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To: K. M. Strickler who wrote (34896)3/19/1998 11:45:00 AM
From: David Harker  Read Replies (1) of 176387
 
K.M. Strickler,

I think the point of the article was not to compare characteristics
of the industries, but to compare financial characteristics shared
by these two companies, primarily their very low cost of capital, and
very high returns on their capital:

"The similarities between Dell and GEICO, for one, are significant. Both operate in seemingly low-margin businesses. Both cut out the middleman and market directly to their customers. Both, therefore, gain a cost advantage over competitors. More important, both employ far less capital than their competitors to achieve the same results, meaning that additional inflows of capital into these businesses generates much higher earnings growth than their competitors. "
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