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

To: Jim Patterson who wrote (37084)	4/8/1998 11:17:00 AM
From: SecularBull	Respond to of 176387

Jim P., I understand why you feel the way you do. I don't agree. You really should cover before the train runs you down...

To: Jim Patterson who wrote (37084)	4/8/1998 11:18:00 AM
From: Boplicity	Respond to of 176387

JIm, Thanks for laying it out. Keep in mind NT 5.0 and upgrade cycle (hardware and software) that we be created when it comes out. The shorts could very well make money this year, it will be hard for DELL to overcome the quilt by association of peers, but in the long run DELL will come out the winner due to its biz. model. Greg

To: Jim Patterson who wrote (37084)	4/8/1998 11:35:00 AM
From: SecularBull	Read Replies (1) \| Respond to of 176387

Jim P. I'm going to tell you why I feel you're wrong: >>1) The growth rate of the PC industry slowing. This is not a long-term trend, and DELL's gobbling of market share will off-set the decline in overall market growth in the short term. >>2) I don't think DELL has the support capacity NOW to sell at the next higher level. (Support agreements indicate they are doing something about this) What is the next higher level?? >>3) I think DELL's competition will cut their margins on hardware and try to make up those dollars on the service side of the contract, and other peripherals DELL's competitors cannot afford to wage a long-term price war due to the inefficiencies of the indirect models under which they still operate (no matter how hard they try to convince everyone they're moving away from, the numbers speak for themselves). Service is the only area that they can afford to make any progress on, since the peripherals are commodity products. >>4) I think sub $1500 machines are taking market share from above $1500 machines the market DELL is targeting. (This relates primarily it INTC's falling ASP problems and competition from AMD) INTC's problems are relative to the other box makers. The truth be known, DELL's INTC orders are higher and higher each quarter. INTC's orders from the others are slowed because of the channel problems. There will continue to be a strong market for upper-end PCs. >>5) I think the PC markets overall ASP decline will eventually have an impact DELL and in turn effect Dells bottom line. I don't think that you can look at the DELL financials for the last two years, during the course of which ASPs have been falling, and show any point in which DELL's margins have suffered. Component prices are going to bottom very soon, because pricing has become too competitive. When this does, there will be a reversal of the trend for ASPs. I would also say that the reversal probably will not improve DELL's margins, since I believe DELL's margins are fairly static. >>6) I don't think Dell can continue to meet or exceed ever rising expectations for more than 1-2 quarters to come in a very hostile PC market. The PC market cannot afford to continue to be hostile. And "hostile" is not the word I would be using here. "Defensive" may be better. I think that if anything good has come out of the recent trials for the industry, it has been a dampening of expectations. You don't hear nearly as much about "whisper numbers" as we were hearing. >>7) TA, I think the stock experienced a Climax Run of 25% in 7 weeks after a 270% one-year move. A top frequently occurs after this type of action. This is irrelevant. Show me where stock chart technicals have applied anywhere to DELL in the past few years. It's all about earnings and the ability to grow them. >>8) The climax was caused by the announcement of a stock split. Dispite todays facination with slpits, this is still a toping indicator. Then how do you explain the same action for the splits prior to last. This is where you guys go wrong. YOU ASSUME first that DELL is overpriced based on where it has come from. You don't spend anytime looking at the company. Your focused on the competitive environment and where the stock has been. LOOK AT THE FUNDAMENTALS! >>9) When Expectations are not met, there will be a rapid change in the markets opinion of where Dells stock should trade. I agree. I just do not see this event (or the precursors for it) on the horizon. I don't see how you can. Quit looking at charts (rear view mirror) and look ahead at fundamentals of this company.