I look forward to your response. BTW- I do agree with the spirit of the first paragraph of your last post to me. You are absolutely right that all longs "should keep their eyes wide open" and (my paraphrasing) that innovative companies are born all the time, and one could, and probably will, one day, unseat Dell....
However, your argument breaks down in the second paragraph.."Any competitor can do this" is a gross overstatement. I look forward to your explanation of how, where, and why they haven't until now....
To close: A little analogy.....I live in South Florida....Each year,
about 2 dozen or so hurricanes form in the Caribbean, and each time one forms, the local news lead with the story "Hurricane xxxx is coming our way"...These newscasters are like the bears (on Dell)....Worried (and trying to get us to believe) that every hurricane (hitting the PC industry, hitting the stock market in general) is going to hit and effect everyone, everytime (Dell)....when the reality is that is it rare when a hurricane hits this area at all......Even with the horrendous damage of Andrew in 1992, which had a massive effect on a certain individuals and families of South Florida, the vast majority of South Floridians....even living very close to the affected area...went entirely untouched...And this from a hurricane that actually landed here.
My point here is not to make light of (a) horrible tragedy or to underestimate the real damage of hurricanes (if they hit you) or to want to experience a hurricane....My point is to say that one can overstate or understate risk. Looking at the real risk (to an individual, family) that a hurricane could hit you (living in South Florida), one could certainly (IMO) overstate the risk and choose not live here because of the possibility of a hurricane (one day) hitting their house......Similiarly, one could sell Dell because of your (mentioned) concerns.............but, as with the hurricane analogy, IMO, you are overstating the risks to Dell concerning immediate, competitive (successful) duplication of their model (in all its glory) in its chosen subsegments....The hurricane has to get a lot closer to shore before I (and many others) would consider it an immediate risk to the growth pattern of Dell. Indeed, it may not even make it (for a long, long time)...But to sell prematurely, would be a grevious mistake......140% (or so) this year speaks to that.
Again, it is not my purpose to make light of the tragedy of Andrew. But in a (much lesser) way, it is also a tragedy when investors sell prematurely because of being "scared" and dont properly assess risk...I think of those who sold Dell in the spring (because of inventory concerns) or those who recently sold (good companies) at the markets lows (last month) fearing a crash..
I'll get back to you post when I have more time. However, what amazes me
is that many DELL bulls believe that DELL is untouchable which I think
is dangerous. We have to keep our eyes wide open. Remember, one day, a
few years ago there was a start-up company named DELL that changed the
way people...well businesses anyway, purchase computers. They did this
in the face of incumbents like CPQ, HWP, IBM, etc... AND DELL succeeded
- beyond anyones wildest dreams.
Now that they've done this, there is no way anyone else can....or so
many here would have us believe. Well, that's just not the case. Any
competitor can do this - if they choose to. But to assume that they
can't or won't is hoping for a lot IMO. |
