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To: patron_anejo_por_favor who wrote (105854)	6/1/2001 12:24:36 AM
From: craig crawford	Read Replies (1) \| Respond to of 436258

>> Dell has a PE over 30, << So. Many other companies have PE's higher than 30 right now. Too many for me to list. >> with flat to negative growth projected for this year. << The market obviously isn't worried about this year. How do you know DELL's earnings will be flat next year? >> This year's earnings growth prospects are largely contingent on accelerating sales overseas << You just said no growth this year and now you are talking growth prospects. >> This will not happen courtesy of softness in Europe and Japan << Japan has been soft for a while. Dell has made up for weakness by taking share. There is no evidence to show that can't continue. >> Their base product that is rapidly being commoditized, << That argument is several years old. >> in an industry with few barriers to entry. << Yeah, like who is rushing out to start a PC company these days! The odds favor exits from the PC business (i.e. Micron), not new entrants. >> Margins will evaporate << Another old argument, that is already in the marketplace. >> The server market, that they are relying on for future growth, is stagnant at best (look under Microsystems, Sun). << Sun is in a different market selling hi-end unix servers. If I'm not mistaken servers were a bright spot of Dell's last Q. >> In a typical bear market, for a no-growth company, that (cash) helps establish a floor value for the stock, << Why not just short BRCD then? They don't have practically any money to speak of and if the market turns south again they are going to have a hard time raising more (at least on favorable terms). BRCD could be a 5 dollar stock. >> (seems fair for Dell, since they have next to no proprietary tech to pull themselves out of the downward spiral).<< They have something proprietary. A successful business model that makes money year after year after year. If it was so simple to duplicate I'm sure some of their competitors would have done it by now. >> Dell's book is between 2 and 3 bucks a share. << Well if we are going into such a terrible bear market and everything is going to trade at book value than why not short AMZN? Take a look at their book value. They sell a commodity, books and gizmos. If you think the economy is going to slide off a cliff into the abyss you want to short companies with lots of debt or little cash. You will make out better. We will have to agree to disagree. Nothing personal.