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Technology Stocks : Dell Technologies Inc.

DELL 127.22

+3.8%

3:59 PM EST

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To: Jeff lin who wrote (72061)	10/14/1998 5:28:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Jeff, I think you're making too many assumptions. For instance, suppose the reason component prices went up is unusually heavy demand for PCs. That could augur a round of price increases as a result of the shift in the supply-demand calculus. DELL was the only major box market to show a decent profit last quarter. Don't you think that if the cost structure got worse that it might induce one of the weaker PC makers to exit the business, thereby decreasing supply? Alternatively, the box makers may simply be content to take a lower profit margin but increase profits due to disproportionate increases in sales. For example, suppose for simplicity that profit margins were to decrease from 20% to 19%. That would require an increase in sales at the old prices of around 5.3%. I agree that the situation bears close scrutiny. TTFN, CTC

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