Jim, when you say "Dell fears nothing" may I assume that you are talking about the company?
If so, what have they to fear? They are the only significant boxmaker to post positive numbers (I have excluded AAPL and GTW on the basis of significant). They are growing at a hefty multiple to market growth. They are cracking new markets both geographically (China, South America) and by product line (higher end servers), and their business model has become the paradigm of the boxmakers, though none has figured out how to emulate it.
If Dell were fearful it would never had dared to enter the market and take on the likes of Compaq and IBM.
To understand Dell you need to understand entrepreneurs, and I think this is your failing. Entrepreneurs focus on what is possible. That's what separates them from analytical pragmatists like me who are looking for reasons why the vision might not work. So when an entrepreneur like Michael Dell passes my analytical hurdles he must really have something on the ball.
What I simply can't understand is your unwillingness to assess this company analytically. Instead, you rely on a series of artificial what-if scenarios which would cause a fall in stock price. But, if you know anything about finance you know that there is a tradeoff between risk and reward. All of the negatives you have pointed to with Dell are similarly negative to any business -- the only difference is one of degree. But by taking a bearish position you do not eliminate the risk, you are just taking the opposite side of the bet.
Your point concerning the impact of earnings disappointments is true. But if you were short you could get easily crushed by an earnings surprise. Have you forgotten what happened at the end of the fourth quarter? After all, my surprise is your disappointment, and meeting my expectations is still your disappointment. Now which is more likely?
TTFN,
CTC |
