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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: NicholasC who wrote (5812)	4/24/1998 4:52:00 PM
From: D. Swiss	Read Replies (2) \| Respond to of 8002

N, I respectfully disagree with you. PC prices have been dropping for as long as I can remember. They will continue to fall as long as component costs decrease. These companies, particularly Dell and GTW are in the best position to take advantage of falling component prices since they relative no inventory. They are the end of the pricing food chain and benefit from lower component prices by not passing it all to the consumer (evidenced by 1 1/2 percentage point increase in gross margin in the face of lower average selling prices). I also disagree with your other point about the your other point about the S&P 500. Most stocks that get listed on the S&P 500 enjoy the benefit of a multi-point run-up. This is just the law of supply and demand. If every index 500 fund MUST buy GTW or any other stock, demand for the stock will far exceed the supply and force the price higher. Most conservative institution investors or pension funds like to buy the index funds because they feel over the long haul nobody can beat the index. There is also the matter of a short position of about 7 million shares which may create a squeeze while the S&P 500 momentum is happening. Best of luck to you. :o) Drew