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: Elwood P. Dowd who wrote (36716)	4/6/1998 9:50:00 AM
From: jbn3	Respond to of 176387

Thank you for a very interesting and thought-provoking link. DELLish, 3. (PS: why isn't one able to send you a 'private message' ?)

To: Elwood P. Dowd who wrote (36716)	4/6/1998 12:52:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Thank you for a most interesting post. The problem that I have with analysis is the same one I have for all valuation analyses. None of the valuation methods works, and this point is unwittingly acknowledged in a number of places in the article. For example, the forecasted growth is very difficult to generate beyond even a couple of years, let alone the minimum of 20 or so years required to generate meaningful cash-flow models. The second point is that I believe it is more appropriate to discount cash flow rather than rely on revenues and margins as this model apparently does. In any even, the bottom line from the article is that the author does not believe that Dell's forecasted growth rate justifies its price. Please note that the price target relies explicitly on two assumptions: first, that the discounting model is correct; and secondly, that the forecasts are correct. These are some mighty assumptions. Regards, Paul

To: Elwood P. Dowd who wrote (36716)	4/6/1998 3:34:00 PM
From: dougjn	Respond to of 176387

Although I often spend a fair amount of effort on valuing stocks I am interested in, I also have some seat of the pants approaches. It seems to me that stock valuations tend to keep going up from whatever the prior level was, so long as success continues. Valuations rarely decline all by themselves, other than very short term pullbacks after big runs. What causes declines are negative surprises. The higher the valuation, the greater the collapse. Dell in particular could fall very, very fall if it stumbles. But meanwhile at even stable valuation levels, not to mention ever growing ones, anything like its recent growth rates is way above a market return. Doug