Your point being?
I suspect, your protestations to the contrary, that you are short Dell. Everybody who knows anything at all about capital markets understands that risks are inherent in investing, and that there is a tradeoff between risk and rate of return. If you want safe investments, put your money in utilities or government bonds.
As has been repeatedly pointed out, Dell's model is not easily copied because of the chasm that inevitably results from re-engineering a firm that relies heavily on channels for sales. Second, you cannot enter the retail marketplace with a JIT model -- retailers insist on having stock to sell customers. Consequently, the problems for companies like CPQ and HWP in bridging that chasm are enormous, and this is the real barrier to entry. So I expect that competitors to Dell will either be companies like Gateway, or companies that were formerly channel resellers who will try to get into the BTO market.
Dell did re-engineer itself, and prior to that revolution they were a relatively lackluster company. Look at the changes wrought by Dell when it decided to jettison its retail presence and go direct. Second, when Meredith (who I believe is the unsung genius of this company) created or fine-tuned the financial engine that allowed the kind of unprecedented growth fueled by almost entirely by internally generated cash, it was off to the races.
This is the most remarkable company I have ever seen. Not only is it experiencing sustained hypergrowrth, but the hypergrowth is financially sustainable in the future.
TTFN,
CTC |
