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

To: rudedog who wrote (42643)	5/16/1998 10:52:00 PM
From: James L. Fleckenstein	Read Replies (4) \| Respond to of 176387

For those interested, my dear brother Bill Fleckenstein, the Dell antichrist, will be on Squawk Box CNBC Monday am to tell you to sell till your hands bleed. It should also be amusing to watch him be assaulted by the ever-cordial Joe Kernon.

To: rudedog who wrote (42643)	5/17/1998 11:07:00 AM
From: Lucretius	Respond to of 176387

<<<No sense in being greedy.>>> Intelligent life does exist on the DELL thread!! I think you made a VERY smart move. Good luck! -Lucretius

To: rudedog who wrote (42643)	5/17/1998 1:50:00 PM
From: Geoff Nunn	Read Replies (1) \| Respond to of 176387

rudedog, Let me be devil's advocate concerning your selling decision. If your objective was better diversification that would be one thing. That apparently was not your motive since you implied you may buy back more shares in the future. Need for cash apparently was also not part of your decision. If the 40% chunk you sold was equal in value to your original stake, it means the shares appreciated 150%. That in turn suggests you held them less than one year. (If you bought them 1 yr. ago, your return to date is 314%). If you held them less than one yr. your capital gain is S-T, and will be taxed at the same rate as your ordinary income. Without being presumptuous, let's assume for the sake of discussion your tax bracket is .396. That would mean that for every dollar's worth of stock you sold, you net $.7624 after taxes. Now the tough part. What do you do with the cash proceeds from the sale? Let's say you reinvest the funds into other stocks. If you do, you're in effect giving up Dell for something else on very unfavorable terms of trade. Although you will pay market price for these other shares, selling Dell in order to buy them is, in effect, paying a premium for them. The premium is 31.1% over market. To acquire $1 worth of another stock, you are giving up $1.31 worth of Dell in exchange. Of course, these figures are only hypothetical because I've made assumptions about your holding period and tax bracket. My point is this. Selling Dell in the circumstances you describe seems to be hard to justify. Unless perhaps you believe the stock is substantially overpriced in comparison to alternative investments. -Geoff