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Technology Stocks : Dell Technologies Inc.

DELL 127.22

+3.8%

Nov 24 3:59 PM EST

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To: Elwood P. Dowd who wrote (36716)	4/6/1998 12:52:00 PM
From: Chuzzlewit	Read Replies (2) of 176387

Thank you for a most interesting post. The problem that I have with analysis is the same one I have for all valuation analyses. None of the valuation methods works, and this point is unwittingly acknowledged in a number of places in the article. For example, the forecasted growth is very difficult to generate beyond even a couple of years, let alone the minimum of 20 or so years required to generate meaningful cash-flow models. The second point is that I believe it is more appropriate to discount cash flow rather than rely on revenues and margins as this model apparently does. In any even, the bottom line from the article is that the author does not believe that Dell's forecasted growth rate justifies its price. Please note that the price target relies explicitly on two assumptions: first, that the discounting model is correct; and secondly, that the forecasts are correct. These are some mighty assumptions. Regards, Paul

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