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

To: freeus who wrote (53691)	7/23/1998 9:21:00 PM
From: D. Swiss	Read Replies (1) \| Respond to of 176387

Dogway report is not so terrible from a balance sheet perspective: Cash up $260 mil., Inventory down $95 mil. (or 8.7 days),improved current ratio from 1.54 to 1.62. Positive forward looking statement regarding demand for your:)ware. We might not get hit so bad tomorrow. However, the condition of the overall market environment might pull us down further. Looks like Dell is going on sale!! :o) Drew

To: freeus who wrote (53691)	7/23/1998 11:31:00 PM
From: JBird77777	Read Replies (2) \| Respond to of 176387

OT OT OT and somewhat verbose (Re: Margin debt) Hi Stephen and Freeus, I think the only way that you can lose on margin is if the stocks that you buy with the borrowed money return less than the margin interest rate (currently about 7%), during your holding period. It is doubtful that Dell will return less than 7% per annum over any reasonable period, say one year or more. As a general and somewhat simplified rule, you will get the dreaded "margin call" from your broker if the margin debt ever exceeds 70% of the value of your portfolio. For example, assume that you invest $100 cash and borrow the maximum $100 on margin and buy $200 worth of stock. Normally, your portfolio would have to decline to the margin debt of $100 / 70% = $143 in order for the margin call to be triggered. This would be a decline of $57 / $200 = 28.5%. If this decline were to occur and assuming that you could not or would not deposit enough additional cash to reduce the margin debt to less than 70% of the portfolio value, either you or your broker would have to liquidate enough of your portfolio to achieve this 70% ratio. To the extent that your portfolio is diversified, it is of course less likely to suffer this 28.5% decline. If you were to borrow less than the maximum margin debt, say $50 in the example above, you could sustain a larger portfolio decline. In this case, your $50 margin debt could not exceed 70% of your portfolio value, so your portfolio value could not fall below $50 / 70% = $71. Since your starting portfolio value would be $150 ($100 investment plus $50 margin debt), your portfolio could decline by $79 / $150 = 53%, which is extremely unlikely. I think that this level of margin is safe and prudent for all but the most conservative and risk-adverse investors, as long as margin interest rates stay below 10%. Obviously, each investor must make her/his own decision regarding this. All of the above assumes that your brokerage firm does not deem your portfolio to be overly "concentrated" (say, 25% or more)in a given stock (e.g., DELL). If so, your broker has the right to impose a "maintenance requirement" higher than the standard 30% used above, and the allowable portfolio decline would be correspondingly less than calculated above. I don't have any professional investment credentials so I can not guarantee this, but I have been fully margined (happily and profitably, but with a few anxious times) for more than two years so I believe that this is accurate. JBird77777 Kemble-certified SI Dellhead 7/17/98 (Not to be confused with JBird "J from CT")