Scott,
If DELL were to deliver triple digit returns to investors in the, say, next 3 years, DELL will become, at least, a 800 billion company by then. I can't imagine a hardware company commanding that kind of market cap, which, on the other hand, is reasonable for a software company which has more growth potential.
I sure hope that DELL can keep delivering 45-50% earning growth in the next several years. However, I seriously doubt so. Even MD was projecting a 6 billion revenue above last year's number. And I did not, and will not believe that DELL will have super growth in China in the future unless they are willing to sell computers for $499 or 599 there. You will understand this in the years to come.
I also think that DELL will meet the first call, but will have a tough time in beating the number and showing impressive revenue growth as it did in the past. This should keep the price of DELL in check, but also prevent it from falling further. The sharp dip in DELL price is simply because the issue is getting ahead of itself and the street is adjusting the growth in the 30s instead in the 50s.
Although I was very bullish on DELL in the past, I cautioned people that when DELL reached a market cap of 100 billion, it would raise a red flag. Give LT some credit who predicted that DELL's high growth days would be over in early 99. He was damn right 6 months ago.
BTW, what happened to the DELL thread in the last 2 months, even after the disappointing earning report? The whole thread seemed to have ascended to the heaven.
good luck,
larry! |
