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

To: Craig Lieberman who wrote (150759)	1/7/2000 6:54:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Craig, I think you are making several potentially disastrous errors in your investing approach. For 10 years growth at 35-40%, my portfolio will provide my needs forever. What would $1000 invested in GE stock when it listed was part of the DOW, be worth today? I have no idea, but it is certainly millions. GE grows at 13% per year and rarely surprised to the upside. Yet its stock grows around 40% per year. Take your current position in DELL and multiply by 1.4 about 10 times. (multiply it's value by 28.92) That is its value in 10 years if the stock only tracks its current growth rate. Eventually, the earnings overpower the share price and force it higher even without an expansion of the PE. Given Dell's current business model Dell cannot possibly grow indefinitely at historic rates because the segment that it is in is growing at only around 15% per annum. The excess growth came from capturing market share. As Dell's market share expands, growth must slow asymptotically to the 15% rate. This is sometimes called the law of large numbers. I have also lightened up on DELL to make it only 75 percent of my holdings rather than the full 100%. No company is immune from business risk. Unforeseen events happen that are business specific. Look at what happened to BMCS, LU and VISX over the last month or so. By putting all of your eggs in one basket you are assuming a huge, and unnecessary risk. I would suggest you diversify so that no single holding exceeds 6.7% of your portfolio. That means holding around 15 stocks minimum. Diversification will eliminate much of the risk you have assumed. When is the best time to buy a stock? When it's cheap. But from a practical point of view, few stocks (except some small caps) are cheap now. But you can make a lot of money by buying growth stocks that are fully valued and riding their earnings up over the years. Perhaps comparing the relative PEG of the stock you are considering to the PEG of the S&P500 might point you in the right direction. TTFN, CTC

To: Craig Lieberman who wrote (150759)	1/7/2000 7:50:00 PM
From: JRI	Respond to of 176387

Craig...I have the agree with Chuzzlewit...although the 6.7% is a bit arbitrary..it is certainly much closer to the mark than 75% ....Personally, 15 stocks is too many for me to adaquately keep up with, so I prefer 10-12.....while recognizing I AM taking excessive business risk with some issues....I am willing to do so (given, what I think, the return will be over the next couple years)..however, I can't, at all, recommend 75% or 100% of your total port. in one issue.... that is asking for trouble...ask Elwood (Compaq, last 2-3 yrs.) about that..good luck...there are many, many other great growth "stories" out there..whose prospects are as good as Dell's...try to diversify into different industries (technologies).....not just PC's..

To: Craig Lieberman who wrote (150759)	1/8/2000 2:23:00 PM
From: Ex-INTCfan	Respond to of 176387

Craig, Dell is 75% of your holdings? I feel this is far too much risk, not so much because Dell will tank (although it is not immune to going down), but more because of the opportunity cost of not diversifying into faster growing areas. I feel you would make far more money in other areas, and that a fund such as Janus Olympus will make you more money with less risk. Look at their top holdings -- a virtual who's who of companies who are well positioned for where things are going. Amazon.com, Inc. America Online, Inc. Cisco Systems, Inc. JDS Uniphase Corp. Nokia Oyj (ADR) Sun Microsystems, Inc. Tiffany & Co. Time Warner, Inc. VERITAS Software Corp. Vodafone Group PLC (ADR) If you take at least half your Dell money and put it into a fund like this, you'll significantly diversify your portfolio while positioning yourself for big gains if the NAZ is strong. I've made the mistake before of holding too large a position in one company. It is a fine strategy if you get really, really lucky, but if you want to play the game that way, why not go to Vegas and pump all your IRA money into the slots? Some pay back 97%, and you always have a small chance to hit it big. (BTW, I'm going again at the end of the month, but for fun, not to make money.) Don't get me wrong -- Dell is a fine company, and I will continue to hold a position in it. But this is not the place to be with most of your cash with companies like JDSU and VIGN out there. JMHO, INTCfan