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

To: Mike Van Winkle who wrote (147425)	11/14/1999 1:26:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Mike, you said Chuzzlewit uses a stock's beta for risk, but I think that management's ability to make predictable financial performance in the face of large troubles to be more meaningful. Actually, beta is only a measure of non-diversifiable risk (market risk). The other component is business risk. An example of the former might be the October 1997 crash which brought the market down as a whole. An example of the latter is the earthquake in Taiwan which contributed to increasing DRAM prices. The reason I want to diversify a portfolio is to minimize business risk -- that's why this risk is also called diversifiable risk. As I recall, studies indicate that with around 15 different equities different business segments eliminates around 95% of the diversifiable risk. TTFN, CTC