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Strategies & Market Trends : Bear! -- Ignore unavailable to you. Want to Upgrade?

To: Walt Corey who wrote (102)	5/25/1998 7:20:00 PM
From: Lucretius	Respond to of 271

I suggest you read my post to you that contained my opinion on DELL again. I based it on 3 premices about a month ago: 1. they sell a commidity 2. PC business is slowing 3. DELL's business is slowing and they are pushing back orders from suppliers in the current qtr. #2 was cited several times by analysts over the last 2 weeks as PC stocks have gotten killed. #3 is a rumor I am hearing and have seen DELL's suppliers report that DELL has postponed some orders. SmartMoney reported the same rumor on Fri, and I believe the article was posted on the DELL kiddie thread. #1 has yet to be confirmed by the mainstream investment community. Perhaps this week? Glad you liked my bearish scenario. :) Everybody pays taxes. Pay yours and move on. Never let taxes determine an investment decision. Don't get sucked into the hysterics on that other thread. Like I've said: they'll buy all the way down and have been. (ggg) Good luck! -Lucretius

To: Walt Corey who wrote (102)	5/25/1998 10:56:00 PM
From: James Clarke	Respond to of 271

Since I don't stocks, although I am getting tempted, all I can tell you is that I'd give you $25 a piece for your Dell shares if I was required to hold them for 10 years. (Of course, I'd give you 75 if I could turn around and sell them for 80. This is called the greater fool theory of investing. And sometimes it really really works!) Seems the market is giving you a better offer. I have never understood why this business can sustain returns much above their cost of capital. Many have asked that question, and I have never seen anybody offer an explanation beyond i) look, they do it, don't ask questions, or ii) they have a neat business model. Neat business models are eventually copied if there are no barriers to entry. I see approximately none. Look back at the history of makers of radios, televisions, VCRs and CD players. You would not have wanted to hold those long term, if at all. Computer hardware is the same economics. Dell is indeed something special - I can't deny the track record - but its not sustainable forever. Don't bother arguing. Bears are never wrong, just early. :)