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Technology Stocks : Dell Technologies Inc.
DELL 111.10-7.8%3:59 PM EST
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To: Meathead who wrote (36136)3/30/1998 7:06:00 PM
From: Chuzzlewit  Read Replies (1) of 176387
 
Hi Meathead, glad to see you back. Jim has been busy promulgating every doom and gloom scenario known to man and beast. I suspect that he's related to Bill Fleckenstein.

My take on what's going on is that Dell is playing the tune, and Compaq is forced to pay the piper. Compaq made two tremendous strategic mistakes over the past few quarters and Dell is taking full advantage of them.

The first was in the way it implemented it BTO system by insulating itself from demand by having traditional channels. Essentially it required that inventory was built up in anticipation of sales. This system required accurate demand forecasting. The alternative was Dell's JIT model -- a "pull" system that avoids excessive inventory.

The second mistake was getting involved in ultra-low profit "sub-zeros".

So Dell solidifies and expands its position in the desk-top and server markets using the most current processors while Compaq struggles to reduce its inventories by giving away monitors that nobody wants on machines with antiquated processors. And Dell looks to China for rapid growth opportunities.

And during all of this Jim becomes even more bearish (if that's possible) on this company.

Regards,

Paul
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