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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Frank Ellis Morris who wrote (133133)	6/17/1999 7:29:00 AM
From: Frank E W	Read Replies (2) \| Respond to of 176387

EMail from a DELLhead friend I heard the Fool Radio show last week, and Tom Gardner says that if he had to invest in a box maker it would be Gateway. But if we opened up the choices to the entire market he would invest elsewhere. That was not too comforting to guy like myself who has invested in Dell and GTW. Tom cited falling Sales and Margins as a concern. But from where I'm sitting Sales are increasing at GTW and DELL. Ok margins have slipped a bit, but hey there is a war going on, a price war, and to the victor goes the spoils....Market share. Look at Revenue for DELL at 18 billion. CPQ has 30 billion in revenue and I estimate 10 billion of that is in boxes. IBM has 84 billion, Another 10 billion in boxes, and HWP has 48 billion, with probably around 7 billion worth of boxes. Since DELL is a direct marketer it can keep prices down and still win the war on margins and profits. Just by stealing market share from these channel sales dinosaurs they can increase their sales by 25 or maybe even 50% just off of market share, not to mention growing demand. So a little price decrease now helps DELL down the road by earning market share and the chance to gain a loyal customer later. Its war for the customers, and every customer that DELL wins today is another potential win tomorrow. While Dell is scoring a good profit per dollar of sales, even with reduced prices, The channel sales margins are already squeezed and eventually they can't compete with out loosing money. Thats when the direct sales people will begin to take a dominating position in the market. With that dominating position they can begin to wreap even greater rewards from the BTO model, compounding the power of quantity with Just in time buying. At some point there will be no channel sales, or very little. I have not bought a channel sold computer for 15 years or more. The last three were direct, and the last 10 that my family bought were direct! Remember that part of the falling prices are absorbed by the OEM's that supply Dell. They are simply passing on the savings to the consumer. So as long as they can increase sales faster or close to the same rates that they are lowering margins, the Direct sellers of PC's will continue to prosper. They will prosper by capturing new entrants into the PC market, and by capturing market share from the Channel sales folks. Conclusion: Party is just getting started with DELL and GTW.

To: Frank Ellis Morris who wrote (133133)	6/17/1999 8:03:00 AM
From: jttmab	Read Replies (1) \| Respond to of 176387

Frank, Help me out here Frank. The post you refer to is about 75% about Oracle. Oracle beat their earnings by about 31%, as I recall, and there were multiple upgrades. Then he listed the names of the houses that did the upgrade. This is insight? One observation that is worth considering might be that the analysts who are paid quite well can't predict earnings in the current quarter of a company. What does that say about the likelihood of their accuracy...one, two or three years out? Goldburg asks the rhetorical question of how many downgrades will there be if DELL misses the numbers....Doesn't Wall street have a rather predictable history here, when a company beats the numbers they upgrade, when they miss the numbers they downgrade...and they say being an analyst is a tough job. <g> On your statement of "been patient long enough". In investing,what exactly is your period of "long enough"; seems like it has to be less than 6 months since DELL hit a high in January. Goldburg said "DELL $27.50 = 50% off its high"....What do we learn from this…Goldburg can look up the high of a particular stock and divide by 2 correctly. Good for him! DELL didn't get to $27.50 but Golburg can divide by 2. CPQ had a high of 51 1/4 and the last trade was at 22 1/4, or about 57% of it's high, a little harder division problem, but I'm confident that Golburg can do that one as well. But what does that do Goldburg also says "The future doesn't look too bright." I would say that if you believe that, i.e., it makes a lot of sense than you ought to sell your DELL shares and/or go short. Now I'm not exactly sure what Golburg suggests when he says the future is not bright. But I'll guess it's the standard declining ASPs extending to $0. Now that I think about it, all of the stated concerns center around declining ASPs. There has been the occasional reference to the economies of Asia and Europe as negative, but if you look at the IDC numbers they are higher than those projected at the beginning of the year. Which reminds me of another annual event...at the beginning of the year, the analysts predict declining growth for the PC sector, growth exceeds the expectations and the PC sector flourishes till the end of the year and then the analysts again predict that the sector is going to have declining growth rates. But this year will be different. I've seen a tad of discussion around Gateways "integrated PC" and it being the way of the "future" perhaps, but it reminds me a lot of the original integrated MAC...remember the one with the 10 inch screen. I won't argue on the success or not of the current integrated PC looking forward, but I will suggest that if it is successful PCs will have a shorter life span. I get an extra year of life out of a PC by upgrading the video card and maybe two years if I upgrade the video card again and one or two peripherals. What is likely? IMO, it is likely that DELL margins will increase due to peripheral selling and the economies gained through selling over the net as well as reduced operating costs in support. There seems to be unanimous consent that DELL will continue to take market share. There seems every reason to believe that Asia and China in particular represents a major area of growth. The track record at DELL is that they will change/adjust their business model to improve margins/revenue. Most changes will likely be successful and some will be an "oops", such as the venture DELL had in making laptops. But it is important to note that DELL quickly kills the "oops" when they occur. It is also likely that there will be some quarters where DELL will meet expectations, some they will exceed expectations and some in which they will [gasp] disappoint. (Duh). Best Regards, JIm

To: Frank Ellis Morris who wrote (133133)	6/17/1999 9:12:00 AM
From: Meathead	Read Replies (1) \| Respond to of 176387

Frank, read my response to that post. Dell has better earnings, more consistency and YOY growth than ORCL... twice the growth numbers, 40% vs 20%. If you want Dell to be like ORCL, then you should be rooting for some very weak quarters so that they can all of a sudden surprise to the upside and receive a slew of upgrades. Are you not happy with consistent and predictable earnings growth? Would you rather it swing wildly? I deal strictly in reality. Your posts indicate that you live in a fantasy world where words speak louder than actions. Answer the thread this question. Can you outline the top 3 reasons why you bought Dell as an investment? 1. 2. 3. As incentive, I bet you cant... MEATHEAD