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Technology Stocks : Dell Technologies Inc.

DELL 123.42

+0.6%

10:16 AM EST

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To: Jon Stept who wrote (98900)	2/13/1999 5:54:00 PM
From: Chuzzlewit	Read Replies (2) of 176387

Jon, I have steadfastly avoided providing valuation figures. The numbers are fraught with all kinds of problems that I have repeatedly recounted on this thread. The point that I was making is that it should have been clear to investors that Dell was behaving like a speculative bubble. As I recall, last quarter the stock closed after earnings at around $65. Week before last the stock was trading at around $110. That's a 69% increase in 1 quarter. But by the most optimistic forecasts, Dell would "only" grow at around 50% this coming year. But if you annualize that 69% pop you are talking about 720% per annum growth. Now that's possible in a small underfollowed stock. But given the large number of analysts watching Dell that is unlikely. But, you might say that late last summer we had a tech sell off. True, So let's back up to July when the stock was selling at around $60 and repeat the analysis: this time we come up with a paltry 226% per annum growth. The point that I make is the following: when, over an extended period of time the rate of growth of the stock price is several times the expected growth in earnings there is something wrong. Except if you're Microsoft. TTFN, CTC

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