Hello Victor, any comments on this article from TSC? I know you don't think highly of Kramer but nevertheless would appreciate to have your thoughts.
Cable Boxes Out the PC
Makers
By James J. Cramer
5/21/99 9:00 AM ET
Weird. I would rather own the white-box makers in
the basement than the white-box makers in the
home office. Yep, Maytag (MYG:NYSE) and
Whirlpool (WHR:NYSE) make more sense than
Compaq (CPQ:NYSE) and Dell (DELL:Nasdaq)
in this tape.
How did this happen? How did things get so murky
in personal computer land? I think it is this cable
conundrum that is causing the investors to flee the
sector. The cable conundrum says, basically, that
if Bill Gates is willing to give a half-billion to any
cable operator in the world to make Windows
relevant, even as boxmakers PAY GATES for
Windows, boxmakers must be on the wrong end
of the stick.
Think about it: Brian Roberts from Comcast
(CMCSK:Nasdaq) gets a billion bucks from Gates,
ostensibly to keep Windows in the loop. Dell, on
the other hand, pays millions to Microsoft to keep
Windows in the loop. Boxmakers give Gates
money so he can finance cable boxes that will
wipe out PCs?
Sounds like Iran-Contra to me. I want to be a
Contra in that equation.
You think, hey, maybe Gates is just a
cable-channel-surfing kind of guy, addicted to the
TV? Nope, Intel (INTC:Nasdaq) seems to be
doing its best to distance itself from the box, too.
Any company that puts Gerhard Parker, the man
who built the eighth wonder of the world, the Intel
Fab, to work on non-PC business is also moving
away from the boxmakers. (Parker will be working
on project anti-Exodus, which so far, hasn't made
much headway, but I wouldn't bet against Parker. I
have seen his handiwork firsthand. The man's a
genius and could be considered America's
greatest manufacturer, topping Ford for king of
mass production in this century.)
When Intel and Microsoft move their money and
people away from their bread-and-butter PC
businesses, why should we put our money with
those businesses? Looks like a change of diet is
coming soon, and bread and butter aren't on
Wintel's menu. Maybe they shouldn't be on ours
either. |
