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

To: hdl who wrote (149744)	12/23/1999 8:17:00 AM
From: Robert Scott Diver	Respond to of 176387

Re. basing your argument on When Dell was $43 according to Stephen Leeb's "Personal Finance" it was a sell because its PE was 70.5, its 5 year annual EPS growth rate was 36.2, its market cap was $110 billion, its 5 year annual price gain was 125%. Does it bother you that Leeb was wrong when the advice was given?

To: hdl who wrote (149744)	12/23/1999 8:31:00 AM
From: edamo	Respond to of 176387

hdl...re: stephen leeb...shorting stocks....socialism... if you are shorting any stock, you do it as a trade. a trade is not a multi year position, you close when a)you have a profit b)when it goes against you(cut your loss short) a "sell" opinion, does not equate to a short signal. oh well....merry christmas p.s.....here is a "bubble burst" article....note where it is published! socialismtoday.org

To: hdl who wrote (149744)	12/23/1999 10:46:00 AM
From: Chuzzlewit	Read Replies (3) \| Respond to of 176387

hdl, Leeb's analysis (as you have presented it) is faulty for a many reasons. First, five years ago Dell was under-appreciated by the market. The market did not perceive the tremendous power of its BTO model and the infrastructure to efficiently execute that model. As more investors began to understand the model Dell's price appreciated accordingly. Second, as Dell has executed superbly over the last five years the perceived riskiness of the company has declined. That results in a lowered risk premium which in turn raises the price of the stock. Third, with Meredith coming on board, Dell has proven to be the rarest of rare companies: a growth company that is also a cash cow. The cash conversion cycle numbers tell the story. Fourth, stock prices vary inversely with interest rates. If interest rates decline stock prices rise. I don't recall what prevailing interest rates were five years ago, but if they were higher than today it is entirely probable that all other things being equal, the stock price rises faster on a percentage basis than do earnings. Only a fool would contend that the stellar rise in the stock price will persist indefinitely. The bulk of the rise in the past was due to the factors outlined above. The conditions leading to the spectacular five year rise are now pretty well discounted by the market. So, at this point I would expect Dell shares to increase in value roughly in accordance with the anticipated forward looking five year growth. This is a fancy way of saying that Dell is approaching its proper valuation. Ultimately, the decision to short this stock can only be based on valuation. My valuation of Dell is around $65 by the end of next year (roughly a 30% increase consistent with its growth). TTFN, CTC