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Technology Stocks : DELL Bear Thread
DELL 140.77+1.4%Nov 12 3:59 PM EST
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To: JRI who wrote (1518)8/17/1998 1:09:00 PM
From: Lucretius  Read Replies (2) of 2578
 
John, you need to expand your view beyond the end of your finger. Industry stats are worthless if an economy slows and capital expenditures by businesses decrease dramatically and the public stops spending. W/a PE over 80, DELL will be shredded as soon as economic growth starts to slow in the slightest (and it has all over the world). DELL, while it has turned out to be a great little manufacturer of plastic boxes, is not above the laws of economics. Since DELL has no inventory (and loves to brag about this when sales are growing and component prices are dropping) the slowdown will be sudden and unexpected as the lag time between the reality of PC demand and the perception of only blue skies ahead for PC sales is compressed into a shorter time period than w/ a co. such as HWP or CPQ which have already shown signs of sales grinding to a halt as their inventories continue to grow. You've already had a hint of this as ASP's have dropped over the last couple of qtrs as well as the rate of growth in revenue slowing (If I recall correctly). When investor perception finally falls back in line with reality suddenly, the reaction in DELL's stock price will be violent. Maybe you've got a couple more qtrs though? Good luck.

-Lucretius
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