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Technology Stocks : Dell Technologies Inc.
DELL 140.77+1.4%Nov 12 3:59 PM EST
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To: Chuzzlewit who wrote (105360)2/26/1999 3:13:00 PM
From: Jock Hutchinson  Read Replies (8) of 176387
 
You make an excellent point, and as a shareholder in LSI, I am painfully aware of the often fruitless expenses that made in R&D--specifically LSI's investment in ATM R&D, which has provided virtually no returns. Moreover, I certainly agree with your assessment of DELL as the premier light assemblage company in perhaps the world and certainly in computer assemblage. But the DELL model has only been tested during an era of falling component prices. In an era of increasing component prices, the DELL Model could fail dramatically. Indeed, during a time of shortages in component prices, the DELL model fails completely, and that is the sort of debacle that potential corporate customers would not soon forget. For that matter, neither would the average consumer of DELL's new sub $1000 computer.

The other point that I wish to make is that there appears to be a near unanimous belief among thread members that the DELL model cannot be easily emulated--lots of talk about culture and that sort of thing. Can it be easily emulated? I am not sure, and neither is any other thread member. You are talking wishful thinking rather than a core fact--more like a mantra that attempts to bury the reality of a 60+ PE company that clearly is facing a declining growth rate.

Great company--OK Stock price. There are better shorts and there are better longs. The easy money has come and gone.

I look forward to our continued civil exchange. In particular, I'd like for you to address the issue of component shortages and its effect on the DELL model. Hope to sharpen both of our perspectives.

That's it for me for the day.

Ciao!
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