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

To: mepci who wrote (160558)	9/10/2000 11:01:10 PM
From: Meathead	Read Replies (3) \| Respond to of 176388

Re: What is your strategy with Dell? Luck. Actually, I'm not a trader. With Dell, it was buy and hold starting around 1990. By mid 96, it became apparent that this stock was on a tear and had the potential to make a lot of folks wealthy... myself and many friends included. By late 98 it had exceeded all of our wildest expectations. Rightly or wrongly, I heavily factor in market capitalization for determining how much upside potential a stock may have remaining. In Dell's case, I used 100B as the magic number to start unwinding my position. My analytical approach to mkt cap is somewhat convoluted so I won't get into the specifics here. Thru 98 and 99 I sold off about 80% of my Dell position and moved the bonanza into govt guaranteed Tbills and CD's and Austin real estate where the bulk of my egg will remain forever. Thank you Michael. Although, I still have enough Dell to keep things interesting. I'm not bearish on the company however. It's a great co. with great prospects and great management but battling the law of large numbers and a now semi-impossible expectation game. If they stay mostly in the decidedly unsexy hardware and hardware related services business, and can grow to the gargantuan size of IBM, they can double their mkt cap to ~200B within the next 5 years or so. However, if the co. successfully re-invents itself in the eyes of wall street and/or some of their many new initiatives suddenly become the new hot thing in investors minds, much larger mkt caps are possible. At the current valuation level, perceptions play an increasingly important role in appreciation potential. Right now, management seems more focused on running the business than managing perceptions or setting expectations. Gee, how is it a bad thing when mgmt is focused on the business? It's not. It's just that they need to do a good job at both but never at the expense of running the business. Right now, looking at the numbers, 30% yoy revenue growth looks nearly impossible unless they can grow revs by 800M in Q3 and 800M again in Q4, a feat which Dell has never accomplished and almost a BILLION per quarter! Best back to back Q's were in 99 of ~600M. Since then it's been relatively weak. There is an outside chance they hit the target IMO but with Gov and Europe weak and IDC numbers strong but not gangbusters, my guess is that Dell will come in with 28-29% yoy. I don't think the street will be very happy with that. I'm hoping for the best however. But that's all short term. Sometime very soon (like right now!) mgmt needs to draw the street's attention away from the top line which will clearly continue to slow dramatically from here in terms of percentages and focus the street's attention on the bottom line where it's clear they are positioning themselves to really excel. I'm not sure why they haven't done this yet. MEATHEAD