Electric -- respectfully, I believe that you've touched on the more popular myths of our time...
If you like DELL and its model and company, then even if we see dips etc, the stock over the long run will continue to do well. Until somthing changes, I want to own DELL so at these levels I feel comfy knowing that even if we go to 7400 and DELL goes to 100, I still think the company will outperform and lead going forward.
Granted, DELL is presently a glowing example of effective management. The trouble is it's impossible to reckon where DELL would price in an actual bear market -- or how long it would take to recover. As such, your investment becomes frozen in time (until it recovers, or you liquidate); meanwhile, the fundamentals can change. Just ask someone who invested in AVON or XEROX in 1973.
I get nervous as well, this market makes me mad, why are we so sensitive to a country in which we have zero contact or trade with? It would be like having Greenland devalue its currency (I know there arent any there).
<g> Which country would that be? And, how interdependent is Western Europe? How interdependent are we on Western Europe? Irrespective of current GDP estimates, what fraction of US corporate expansion is reliant on "emerging" economies, and sustained growth throughout Europe, Asia?
For all we know, these international events could be a cover-story for a fundamental valuation problem in US equities. In any case, either foreign economies impact the US corporate bottom-line, or there are pervasive domestic issues that have not been fully revealed. For now, we are blessed with a historically low cost-of-money (and a clear policy of monetary expansion); yet, earnings growth is slowing.
I may be all wet, but things just don't look so rosy. Being in cash might not be so bad.
Regards,
Alan |
