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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (3479)	3/8/1998 11:42:00 PM
From: jeffbas	Read Replies (1) \| Respond to of 78567

I also claim no special expertise. However, I believe for the reasons previously stated that this industry will show lower growth rates in the future, so long as no snazzy new application comes along requiring more computer power. That combined with the enormous advances these stocks have made in the last several years suggests to me that these are not "Value Investing" stocks. Of course, I am sure someone also said that about MSFT years ago. As far as duplicating DELL goes, didn't Intel attribute some of their problem to Just-In-Time ordering by computer OEMs? Maybe others are now figuring out how to do it. Therefore, I would now regard CPQ as a possible trading buy on a selloff, not a cheap long term investment.

To: James Clarke who wrote (3479)	3/8/1998 11:44:00 PM
From: M CAHILL	Respond to of 78567

I sold both DELL, CPQ, and several other high tech stocks last week and put it back in TD - Toronto Dominion Bank. TD is a bank, that is aggressively expanding its discount brokerage business worldwide. PE is about 7, Annual EPS growth +30, last quarter earnings was 95 cents, dividend paid since 1857, book value $18.58. They currently own Waterhouse, and the largest in U.K., Australia, and Canada, etc. If this stock ever gets some attention it will take off.

To: James Clarke who wrote (3479)	3/9/1998 12:46:00 AM
From: Michael Burry	Read Replies (2) \| Respond to of 78567

You're not missing anything big. Dell's whole edge is its inventory management, which has allowed it to avoid the inventory problems of every single other PC manufacturer. It rarely gets the highest marks for quality, and just as rarely gets the marks for customer service. Micron, Gateway and the other direct sellers have to replicate the inventory system in place at Dell. No simple task, but doable over the next year or two. And then Dell loses its comparative glow. It will still dominate corporate sales, but it becomes a widely recognized pure commodity business that is cyclical nonetheless and hence not worth 54 times earnings at the top of its cycle. It seems like an obvious short to me. The last 20-30 points were all speculators blowing off the top of the stock, IMO. Mike