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

To: Chuzzlewit who wrote (63851)	9/5/1998 9:06:00 PM
From: Gary Metzer	Read Replies (2) \| Respond to of 176387

Chuzz et al, A comment on value..... The Barrons article interviewing the two bears (Flickenstein & ???) mentioned the concern about Dell's excessive valuation partly based on the fact that Dell had insignificant book value. Seems like a myopic paradigm (oooo, I like that) when we look at a company as Dell from a traditional book value basis. Dell has gotten their system running so smoothly that they can produce more PCs using less equipment. On the other hand, a highly inefficient company that requires massive plants and fabs has a better $/Book Value, but does that make their stock a better buy? Also, shouldn't we place a value on the "intangible" benefit of all the progression that Dell made to be able to become so efficient? ....and those "million dollar secretaries" who continue to work because they believe in their company, or just want to increase the value of their stock further, says a lot too. I'd take that kind of drive from an employee anytime and in my view it should add something to the BV. Another thought....I think we're leaving the realm of what had been thought of as the traditional way of valuing a company. First, with so much money going into 401k's, which we have never seen before, much more of the money is being directed towards the stock market(they're not accepting a 5% CD). As companies pull away from pensions and shift even more towards 401k's, this will have a tendency to push the market up even more. This should continue for another 20 years or so, until the "baby boom" becomes the "baby bust". At that point, who knows what will happen, but I plan to be in cash or gold when it does. Dell might be highly valued in the traditional sense, but so what! If a slowdown happens, they won't be stuck with lots of plants they have to mothball, they'll just run their plants 23 hours a day instead of 24. It sure is one fine company, isn't it? Any comments to the thread concerning valuation in this new generation that we are in would be appreciated. Gary M