LT, your bearish prognostications based on your fastidious "belief system" is quite pathetic. Your statements about what is happening are diametrically incorrect... there is so much proof that they are incorrect that it's purely comical. Chuz is right, youve posted no substance. Do you know how to post a link? If so, then post the links of your previous posts where you outlined your rationale for the immenent crash so I can rip them to shreds. Do you have a valuation model that isn't based solely on PE? It's quite complicated to perform valuation based on many other important factors that are the focus of todays investment climate. Novices and rookies can only grasp price/volume and PE ratios.
Now for a little fun. You said: PC sales declines and
THE PIE IS SHRINKING. Now that's comedy<gggg>.
IDC says the PC market will grow by 13% to 15% for 1998. To help you grasp this concept, here is a little 1st grade math. If 80Million PC's were sold in 1997 then the projection for 1998 is 80*1.15 or 92Million PC's. Now which is greater, 80M or 92M? Don't answer right away, think about it for a while.
The statement their devotion to the highend mkt (big mistake)
Your perception of this issue... big mistake for you as an investor.
Compaq agressively went after the sub-zero... that's their profit for
6 mos, sub-zero. HWP competes head on with CPQ in this space... look
how nicely their quarter is shaping up<ggg>. Dell focuses on the big profitable piece of pie.... their Q1 results and forward looking statements will speak volumes about how well their strategy continues to work. Entry level PC's will not garner more than 15% of total PC sales for many years to come... how is a mistake to avoid this sliver?
Is Toyota and Honda making a big mistake by not competing with the
Hyundai Accent in the $8299 new car space? Will the sub 10k automobile begin to dominate the auto market? After all, a 10k car
will get you there just as fast and comfortable as a 20k car. Right?
Another statement: I'm heariing that DELL's business is slowing and they are pushing back orders
You clearly don't understand how PC mfgrs operate. Do you realize how many vendors are on the ASL (approved supplier list) for a given product? Take memory vendors for example. A typical Optiplex will
use DIMMs supplied by Hitachi, Samsung, TI, Goldstar and Micron.
When Dell pushes back on say Goldstar or Micron, it's generally because of fairly complex quality, cost, quantity, scheduling and logistics issues. All Micron can say is Dell's pushing back orders.
Meanwhile, volumes from Samsung increase. Multiply this scenario by
the 100's of components on a PCB that aren't single sourced. There are always many vendors you could poll and learn that Dell is pushing back orders. They always have and always will. INTEL IS THE ONLY SINGLE SOURCE SUPPLIER FOR DELL. If Intel says Dell's "total volume orders" are decreasing or flat, then you can worry.
The statement: "they're being undercut in price". This is purely an illusion, a temprorary phenomenan due to channel backlog. Older technology systems that Dell aint selling anyway. Corporate customers don't base business relationships on fire sale and liquidation prices which arent sustainable. Dell's competitors need to run close to zero net profit margin to sell leading edge technology systems at price parity. To undercut them, they must go negative for extended periods. That's the beauty of Dell's business model and why their stock is so valuable.
Every single PC company except Dell has disappointed. What does this
suggest to you? I know, Dell is next because it's in the same business, right?
So, here are just a few of the insults you've expected. I don't expect you to believe any of this because explaining the complexities of the PC business to a stock trader is like trying to teach a dog to fly a plane.
Cheers
MEATHEAD
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