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

To: Lee who wrote (24396)	12/6/1997 2:53:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Lee, the issue of stock splits affecting the price of a stock has been studied to death. Some people have found an effect, but it turns out that the increase occurs before the split occurs (i.e., the stock is still trading at the higher value) -- so in effect the price does not act as a determinant for demand. Most people who have studied the issue of splits feel that the split is triggered by increasing stock prices -- not the other way around. Splits used to make sense when people paid more for buying stocks in odd lots, but since this differential has been eliminated, the rationale is gone. An interesting way of viewing this is to suppose that the country goes metric. We would not expect the price per lb. or per oz. to change based on the way we measure weight. Regards, Paul

To: Lee who wrote (24396)	12/6/1997 4:24:00 PM
From: Gabriel008	Read Replies (2) \| Respond to of 176387

Lee, zipping through Barron's today I stumbled upon an article entitled "Day Labor - a surprising factor in hourly earnings". Since I was somewhat surprised by yesterday's upward move by the Dow & Nasdaq despite the 404,000 non-farm payroll increase & the 4.6% unemployment rate I decided to see if this writer - Gene Epstein -had anything to say on the matter. Lo and behold this guy said something very interesting concerning the way in which the Bureau of Labor Statistics calculates hourly earnings increases. Distortions in the system generate a 7.2% increase on an annualized basis for the November period. December's will, in most likelihood, work oiut to be 0% on the same annualized basis. The reason - very simple - 20 weekdays in November vs 23 in December. Can it be so simple? It appears so & the BLS is in the process of fixing this minor glitch. Another salient point; we no longer operate in a closed economy - we compete in a global economy. Rising wage rates, therefor, don't necessarily translate into inflation since we are competing with lower wage rates from abroad. This is particularly important since Asia is actually experiencing disinflation. Companies must absorb wage rate increases & find ways of maintaining profitability without raising prices in order to remain competitive & keep shareholders happy. So, net net, the BLS data is questionably accurate particularly since they continue to adjust it in later periods anyway. And, lower unemployment although a direct catalyst for wage increases doesn't necessarilly translate into a higher overall inflation rate. The only sobering thing is that companies have to offset these wage increases through better management - and this includes improved productivity, exploitation of higher margin new markets, and superior marketing know-how. And, there in a nutshell is why DELL is my favorite & most productive stock in my portfolio.