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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: jim kelley who wrote (70782)	11/19/1999 5:56:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Jim, Don't be too aggressive on GTW. They will find a way to get those component prices on the balance sheet and off the income statement. And I totally agree that Dell management needs scaling, though they also need gutting and a battering before they are fried. <g>

To: jim kelley who wrote (70782)	11/19/1999 8:29:00 PM
From: Earlie	Respond to of 132070

Jim: I follow Dell a bit. I don't share your enthusiasm. Here are a few of the reasons why I think well timed puts will be as profitable in the future as they have been this year. Dell has increased its revenues through the sale of peripherals, etc. This area is closing in on "no margin" status. Bigger revenues, but reduced percentage profits. Dell's direct model appears to me to be (finally) losing ground to the "local cloners" who offer the same "custom build for you" baloney, but can also offer local service. As folks gain more experience with PCs, they are recognizing the need for this service, and they are also recognizing that Dell's prices are not competitive with those of the local cloners. Dell is actually very expensive now in comparison. Dell has bet big on the server market,....and IMHO at an inappropriate time, as every other box builder has also done the same thing and the margins have eroded even more quickly than did the PC margins as the price wars took hold. The server market is simply not big enough to soak up the current production, so the price cutting will remain brutal. The insiders have been selling at the legal allowable limit each and every quarter for some time now. As Dell's growth subsides, the shrivelling of the PE is inevitable. This will be the source of the most severe pain. Dell's credibility is starting to show cracks. Too many bullish prognostications that did not quite make it have eroded the religious fanaticism. Once this sets in, punishment for small problems is an inevitable consequence. This quarter will provide lacklustre results at best, while the follow-on quarter is the one that has this particular Vaderian salivating, particularly if the herd doesn't do serious damage in the interim. Best, Earlie