Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Meathead who wrote (22888)	11/24/1997 5:23:00 PM
From: Rio Jangada	Read Replies (1) \| Respond to of 176387

MEATHEAD, First off, I have no doubt that sales will continue to increase. But the trend in earnings over the last year or so is one of marked decline in growth rate. Where does this lead? Negative earnings growth! It could happen real soon, if margin pressures accelerate, overseas markets slow, or US costs accelerate. There are indications for all of these. RJ

To: Meathead who wrote (22888)	11/24/1997 5:44:00 PM
From: James Choi	Read Replies (4) \| Respond to of 176387

All this talk and facts reminded me of Disk Drive business a few months back. All the reasoning, all the projections, and all the responses of the people also remind me of those days. No doubt Dell will grow. But what's going to be the profit? Sub $1000 computers are already there. However bad they may be, if those units take away sale from Dell, the damage is done. On a far fetched note, I don't think Saddam is that dumb. I believe he is just playing to gain some time. All his tactics and flip-flops point to that direction: he is trying to buy time. I would not be surprised if people starts dying in mass mysetriously somewhere in a big US city in next few weeks. That would hit the stock market hard since the extent of the damage is virtually unlimited. In a way, it is worse than an atomic bomb. A silent and invisible mass killer. Of course, we could bomb them pre-emptively but either way, it won't help the stock market. And as for Korea, Japan and Brazil, I have lived in all those places, and I know the culture and people. And I am not optimistic about their quick turn around for different reasons. I have a hard time seeing Brazil population in general being efficient and effective, although they are very peace-loving and artistic. Brazil is the country I want to live in, exactly because it is not driven by machine-like people as is the case in the US. Brazil is passing a new law to trim the fat out of the system and it already passed one house. It remains to be seen if it will pass the other, and whether its implementation will be sufficent to turn around the economy. The Brazilian economy has been ailing for a long time and I have a hard time imagining such a deeply rooted problem being cleaned up so quickly. I myself suffered it first hand when the inflation was going over 100% per year. And I have a hard time seeing Korea getting out of those bribes and under the table dealings based economy. All those who are in the money and power are there via such schemes and people grew up in that kind of system that lasted over three decades. Cleaning up their act will effectively cut out their lifeline. I suspect much resistance will come to the IMF imposition in spite of the smooth front they put on now. Of course, they will put up a smooth front, what else can they put up? Anything less will cause panic. But I am fundamentally skeptical about what the Korean government says. Only recently they said they had enough dollar to fend off any currency speculation. Only a few weeks ago they said "We will never never never go to the IMF." Notice that the Korean market tanked 5% on Saturday and 7% yesterday in spite of the fact that the IMF officials are already there and the official negotiation is progressing. This Korean people's justfied fear of cleaning up was the biggest reason for their denying and delaying IMF involvement in the first place. As for Japan, their lastest failure of Amaichi had debt in excess of 23 billion. The current IMF package to rescue Korea is 20 billion. This one brokerage (fourth largest) firm had a debt that could save a country! And the extent of the debt is not all known due to their shady dealings. Which brings another point. There are a lot of underground finance going on in Japan (and Korea) also. All those dark dealings have been off the book and out of the light for decades. For now, Yamaichi is saying that their asset can cover the liability. But, what else can they say? "I am sorry, but we don't have enough" and cause a melt down of Japanese economy? I am skeptical about their decades old dealing with Yakuza and political contributions and all other dark financial practices. Compared to the scale of the financial scandals in Japan or Korea, the Whitewater deal is nothing. Such trifle sum would not even have been an issue at all in Korea or Japan either in financial scale or in ethical scale. The fact is that someone has to pay sometime. This Yamaichi is not good news no matter how you cut it because it dries up the liquidity of the market. A series of other institutions are lined up in the domino line. How much can already-streched Japanese government support without resorting to selling? I do not know. But the informed opinion seems to be "not much more." Even the IMF is getting close to the bottom of the barrel of their resource. Besides, how much are you people willing to pour American tax dollars to save these far off countries? Some of you said shorts do not do their research. That may be true. I cannot quantify all these feelings and hunches and I would not call this a research. But this was the background against which I saw Dell's 40+ P/E (now 30+ P/E, still too high) too high to sustain. Panicking the market is the last thing anyone wants. So, all the fund managers and government officials are all upbeat and "cautiously optimistic" about the future. In fact is, you won't see many people who recommended you to sell in mid October, and you won't see many people who admits they sold on the day after Hong Kong crash. They all tell you to "buy and hold" so that they can sell at a high price. That's only my opinion. And I admit that I am skeptical perhaps because I am by nature, or because I grew up in countries that don't talk straight to their people. But it is a fact that someone sold en mass on that crash day and no one is admitting it. The same guys are telling you "economy is ok, hold on to your stocks." You decide. James Choi