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

To: Chuzzlewit who wrote (50376)	7/10/1998 10:40:00 AM
From: jbn3	Read Replies (1) \| Respond to of 176387

Chuz, Thank you for an excellent post indeed, and one which merits the attention and thought of every investor. ... The lesson from this analogy is that the generation of future cash flows is the only material parameter; thus I believe a business is worth only the value of its future cash flows. The corollary is that the method of deriving those cash flows is totally immaterial.... The essence of investing: try to estimate future cash flows. What individual would put investment money into a company he knew would never make money? ... I view these companies as electronic magazines whose incomes are derived from advertizers. Thus, the question is which magazine has the format most likely to appeal to readers. The more readers, the higher the advertisers' rates.... I see a hidden danger here, too, in that the internet is new enough that more readers does not necessarily equate to more sales. Fortunately for the Internet stocks, participation is growing so rapidly that it is very difficult to determine a cost/return relationship for internet advertising. Personally, although I may be on the net many hours a day, I virtually never read any of the advertising. However, I am well aware that other surfers probably have different habits. ... This triggers real synergies (and here I use the term in a more exact sense than is generally bandied about). For example, BKS would be hard pressed to sell to the electronic retail customer were it not for the fact that retail store outlets exist. A retail customer needs to have a hands on feeling for what he is buying and from whom. So the existence of retail outlets provides a feeling of substance to the customer. In the case of Dell, this necessity has been obviated by the wide use of Dell machines world-wide. Here, the "synergy" is really the critical mass. ... Here, Cat, you have touched on a usually over-looked, but quite powerful, facet of the DELL model. I believe that there is a VERY strong synergy between DELLs corporate sales and consumer sales. As we know, DELL targets business, government, and schools. Those employees and students who use DELL daily become familiar with the quality and reliability of DELL products and with using the internet. IMO, that is one reason for the phenomenal growth. Another synergy is the word-of-mouth advertising by those same employees among their neighbors and friends. I know that the DELL I bought my mother-in-law was directly the cause of two more sales to her neighbors. Regards, and thanks for the post. DELLish, bachman