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Technology Stocks : Dell Technologies Inc.

DELL 122.55

+4.4%

Nov 21 9:30 AM EST

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To: JRI who wrote (45355)	5/29/1998 4:42:00 PM
From: Chuzzlewit	Read Replies (2) of 176387

OT OK John, here's how I see things. Interest rates: I see long term rates staying low and perhaps going lower as money moves from troubled areas like SE Asia, Russia and the Indian sub-continent to the US. Fed: won't raise short-term rates because of the strength of the US dollar. Increasing the rate would result in a worsening balance of trade as Japan tries to export her way out of trouble. Oil: oil will remain cheap so long as the Asian problems exists. I look for oil to increase moderately this summer, but it will have little impact on the cost of other commodities like agricultural products. We could see some substantial food price increases due to el nino. I see corporate profits trending down as a result of the continuing Asian problems. The multiplier will kick in, so even companies with no Asian exposure will be affected. The result will be what Greenspan really wants to do by raising interest rates -- curb unsustainable corporate growth. I see us balanced fairly precariously at this juncture. A precipitous action by the Fed could be disastrous. In fact, I would err on the side of lowering interest rates a notch, thereby attempting to weaken the dollar. The balance of trade figures are scaring me more than the prospect of a small amount of inflation. Stock market: a wag once noted that the market has successfully predicted five out of the last three recession, so I will pass on market prognostications. Dell (the company) will kick in the after-burners as the Chinese and Irish plants ramp up. I believe we could be entering a second period of hypergrowth. This will result in Dell displacing IBM as the second largest PC company. Maybe the stock already reflects this expectation, so again -- no predictions. Compaq (the company) will continue to have inventory problems through the middle of the third quarter. It will jettison its channel strategy as it becomes clear that channel members like Ingram are attempting to compete with Compaq. I don't think Compaq's numbers will improve until the fourth quarter. TTFN, CTC

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