Stock bull,
If you read my post on other boards, you will see that I am totally against shorting DELL before earning announcement. But it will become an easy choice as soon as we read the report.
I have no doubt that DELL will report good numbers this quarter. And I will hold my DELL shares toward the announcement unless the market turns south. If DELL beats numbers, they will open up the following day. If we don't like the number, we can dump DELL at the opening and still lock in the solid profits.
At current price, DELL is trading at a forward PE multiple of 45. And with its market cap already much more than 50% of the global PC sales, how high can DELL fly? Among the big cap high tech issues, I think that in ten years, only MSFT, CSCO, LU, YHOO!, and AOL will sustain the PE multiple the market gives these issues. DELL is not going to be on that list.
Also if people begin to pour money into Europe and Asia market (it will happen within the next 12 month or so), where are we going to get money to sustain the growth rate of US market? And big caps spot hefty PE multiples like they did in the early 70s, they will enter a bear trend due to either market crash, or people relocating their money to small and mid-cap issues. |
