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: Fangorn who wrote (44129)	5/21/1998 3:05:00 PM
From: Paul Merriwether	Read Replies (1) \| Respond to of 176387

Stephen I think Jim is trying to say that the stock had gone up in expectation of a "blowout earning". That expectation was unfounded, the earning was merely "fairly good"(w.r.t to the expectation). Therefore the stock is retracing. Since you are a long term owner of dell it should not affect you. It will however cause some consternation amongst the mo-mo's. If I can make some money betting against them. Good!

To: Fangorn who wrote (44129)	5/21/1998 3:39:00 PM
From: Jim Patterson	Read Replies (1) \| Respond to of 176387

RE: Are you saying that because the estimates were closer to the actual this time the company did something wrong? If so you are full of hooey. I don't understand why this is so difficult to grasp; I must not be explaining myself very well. The company did nothing wrong. If the company comes in below expectations, that does not mean it did anything wrong. I need to make a distinction between the STOCK and the COMPANY. The Stock is expecting something to happen. In this case blow out EPS. Dell has a history of beating the numbers by a certain amount. If DELL fails to live up to this expectation, as it did, then the stock is vulnerable to selling as disappointed investors sell their shares on the company not living up to their, in this case lofty, expectations. This is why stock that consistently beat numbers get such high multiples. Everyone expects the analysts to raise the bar after every report. Over time, the bar is eventually raised to high and when the stock fails to live up to expectations, it falls. DELL has managed to jump this bar for a much longer period than on average. Because of this, the stock is getting a richer and higher valuation and multiple. However, IF and WHEN they do miss, the failure may be that much more devastating. With 45 cents being the actual whisper number, and consensus @ 42 cents, that would about equal DELL's historic norm. @ 44 cents, the stock failed too truly meat the whisper numbers and is reacting accordingly. If this decline develops into a larger decline, one could argue a case that big money is selling because they are loosing confidence in the stock ability to beat numbers in the next report. If the pullback is muted, then this loss of confidence has not occurred. We won't know for a while. Be patient, the answer will be plain as day in due time. In a nut shell, Have you ever seen a company with great numbers and balance sheet in it report only to it's stock pummeled? HWP comes to mind, their quarter was not bad by any measure, but it was expected to be much better. The stock is reacting accordingly. Jim

To: Fangorn who wrote (44129)	5/21/1998 5:49:00 PM
From: Chuzzlewit	Respond to of 176387

Steve, here's an analogy I like. I go into a store and they have a big bowl full of gum balls. There is a prize for guessing the right number of gum balls. I carefully calculate the volume of the bowl and the volume of the candy, taking cognizance of the irregularities in the bowl that I discovered the previous year and so I guess 11,327, but the fishbowl actually has 12,046. Some kids off the street figured that the bowl 12,411 But last year, in a similar contest, I guessed 8,141 based on much less information and the fish bowl actually disgorged 9,814. The kids looking at the bowl along with me were guessing 8,305. Jim Patterson says the fishbowl missed its number because some kids giving advice overshot the number. I say I screwed up, but I'm learning from my mistakes. Jim Patterson thinks the fishbowl screwed up because it's getting harder to fool me big time. And besides which, those kids giving me advice overestimated. TTFN, CTC