11-7-98
Hi, Dalin, Jhg in Kc, and Thread.
Interesting logic. It is worthy of consideration. Certainly any early bailout based on the rather unexpected way Dell is behaving probably is the wrong thing to do. I am betting that Dell will do fine.
Entertain this if you will. In the last 22 days the Russell 2000 has increased by 28+%! It has been up in the last 19 out of the last 22 days! No other large grouping of stocks that I know of, has shown this kind of performance.
Perhaps, money that would ordinarily go to Dell, has to some degree, gone to the Small Caps. Given the time frame you suggest, it is possible to pose a workable frame of reference which states if the earnings are what they should be for Dell and the Small Stocks begin to show the effects of moving so rapidly in such a short period of time and level off, simply because they are overbought and hence for the most part lose their attractiveness, the enthusiastic money that went in to the Small Caps will come into Dell and perhaps in a big way, at least for a short period of time.
Now I realize we are both kind of shooting from the hip, yet that isn't such a big problem. Consider what we are looking at:
Greenspan and Dell public speak. In addition, the placement of moneys which, can at least be divided, in terms of Small Caps vs. Large Caps.
However what is more difficult to divine is the fact that DELL GROUP sector is rated an A by IBD,which is very favorable,and within that grouping ,we find other stocks that have shown more life on the boards.
None of factors, we are entertaining here are necessarily connected, and thus far addresses why, within the sector, big money seems to miss Dell and hit others within the same sector.
I personally do not think that a whole bunch of individual investors decided that Dell wasn't worth the investment. Where is the news? Any so called Analyst of import give Dell a downgrade? I don't know of any rational factor that occurred that would unite and invite a no confidence investment from a large group of diverse investors. So probably it is not the small investor who collectively decided that Dell wasn't worth it. Why would they?
So where does that leave me? It probably is something else! If Dell is the Dell I think and bet it is, then some sort of large grouping of money that normally would be there and thus impelling the momentum of large and small traders to get in, isn't being employed, in that manner. Why? Who has that kind of power? The Fox Brothers?
I probably will have a better picture in a month or less, so I'll protect my investment and stay the course.
Regards to All,
QT
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