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Technology Stocks : Dell Technologies Inc.

DELL 114.75

+1.4%

9:32 AM EST

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To: Geoff Nunn who wrote (50764)	7/11/1998 12:46:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Geoff, I think your analysis is on the mark for the business itself (and here I'm just discussing the portals). So what do we have? We have a series of businesses with undefined demand and little or no barriers to entry. What really disturbs me is the fact that many investors seem to be aware of these flaws, and are unperturbed by their implications. I believe that we have a full-blown greater fool market here. A rational person might be tempted to short for the reasons we have discussed, -- I have been mightily tempted -- but the problem is that you never know how long it will take for the speculative bubble to burst. I think you need very deep pockets to play this game on the short side. So I sit on the sidelines watching what I consider to be a game of mucial chairs. But I think we see the same kind of thing when investors buy stock in the hopes of a runup just before a split. Anyone with any sort of market savvy understands that there is no rational basis to believe that a company has greater value when its stock splits, and yet we repeatedly see this phenomenon. I think your comments concerning elastic supply may be currently applicable to white box makers. When I was shopping for a home computer last summer I checked the local box shops and discovered that the price differential between them and Gateway for a Pentium II was very small. Given the superior product components and warranties there was little choice in my mind. But I understand from Rudy's posts that the differential may have once again increased. Of course there is a big difference. The small box shop has a higher cost per component structure than Dell, and so will tend to use lower quality components to keep their costs down. TTFN, CTC

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