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Technology Stocks : Dell Technologies Inc.
DELL 120.49+0.7%Jan 16 3:59 PM EST
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To: jbn3 who wrote (126346)5/24/1999 6:35:00 AM
From: Chuzzlewit  Read Replies (1) of 176387
 
Good morning Bachman,

I'm still catching up on a lot of posts I missed during the last week, so I hope you will pardon my late reply. I think you raise a key point, and a weakness of many analysts:

Bottom Line: If you are willing to own a company which is expected to grow at several times the industry rate of ~15% for the next several years, hold. If not, sell.

Analysts are frequently searching for the "undervalued" issue. When they employ such a stratagem they lose sight of the fundamental idea of investing. If a company is under-valued (assuming you knew what "fully valued" really implies), and if you insisted on investing solely in such stocks you would effectively end up with a trading strategy, moving in and out of stocks as they become "fully valued". In other words, you become a sort of temporal arbitrager. But looking at the market as a vehicle for economic investment, what is wrong with having your money in a fully-valued equity whose earnings are expected to grow at 35% per annum for the foreseeable future? Doesn't that imply that you expect your investment to grow at 35% per annum? Maybe I'm asking too much of sell-side analysts, but it seems to me that such an approach is far superior to the "value investing" approach.

And that's why I invest in Dell.

TTFN,
CTC

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