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

To: Meathead who wrote (25696)	12/19/1997 9:23:00 AM
From: Jim Patterson	Read Replies (1) \| Respond to of 176387

re: "Jim, Why do you believe that Dell should discontinue it's currency hedging practices (they've modified them since they got in trouble)? Why also should they stop selling puts and buying calls to facilitate cheaper and more predictable (budgetable) stock buybacks. " It is the Naked put writing that got them in the most trouble last time. if the stock dropes, you do the math. As for the currency hedging, That is a two way street. 70% of their labor costs are in foreign currency. If they were perfectly hedged for this, the huge cost advantage you think they are going to have was hedged. that means that they will not realize it until the hedge is removed. The hedge can work for you and against you. Normal hedging works to even things out in a fluctuating market, but when there is a 50% drop in the market, it can really screw your hedge up. Jim