Read this and weep DELL bulls. A respected hedge fund manager tells Alan Abelson in this week's Barron's that PC unit volume is going to DRAMATICALLY SLOW this year. He also sees a significant Year 2000 problem. Although not spelled out, he is obviously shorting CPQ and DELL:
Ranjan Tandon runs a hedge fund called Libra Advisors. Ranjan, we learned, escaped from Merrill Lynch some eight years ago and now manages something over $150 million.
Shy about publicly identifying his shorts -- possibly because he fears for the soundness of his kneecaps or simply is leery about drawing the attention of those sadists who get their jollies squeezing shorts -- he is by no means congenitally averse to selling short. Indeed, he confesses that when he started up his fund, it was strictly dedicated to that estimable practice, not too surprising since the year was 1990, when the bear last was seen in Wall Street. However, when the market turned in 1991, he decided, sensibly, it was time to change focus.
Technology, even though he owns some stocks in the sector, strikes him as due for trouble. He foresees "dramatically slowing growth" for parts of that vast, amorphous field. The going estimate is for worldwide PC unit growth of 13.4% and revenue growth of 4.4%, a disparity that reflects heavy pricing pressure. However, noting the recent disappointments at Compaq and Intel, he speculates that if the softness those reports revealed should continue, projections for the year will have to be scaled down sharply. He envisages the possibility of global PC growth in units of only 5%, which would translate into a decline in revenues of 5%.
Ranjan also worries about the year 2000 problem, which, he says emphatically, has been way underestimated. He points out that a very hefty slice of corporate technology budgets will be diverted to try to fix the problem. |
