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

To: Gary Metzer who wrote (64030)	9/7/1998 9:26:00 PM
From: JPR	Read Replies (1) \| Respond to of 176387

Based on the hammering that Dell and the whole market took last week, I wouldn't rule out a sharp rise tomorrow followed by a slow but for the most part continuous rise with only minor pullbacks for a breather. Gary: I tend to agree with you. This time it is different. Investors, in anticipation of an impending fall might sell tomorrow and regret later. The present and the next quarters are going to be very strong for DELL. Selling now may not be a good idea. Post split blues may not materialize. Did you hear or read about DELL According To BILL and FRED RightLine Split Report: Dell Computer Corporation (DELL) - Saturday, Barrons had an interview with two known "tech bears," Fred Hickey and William Fleckenstein who said that DELL, and other "Nifty Techies" such as INTC and CSCO among others, are in effect just waiting to get slaughtered. They said that these "Nifty Techies" have enormous market valuations because the market has seen them as safe havens and consequently there is a "disconnect between fundamentals and market valuation." Yes, it was another of their "the sky is falling" commentaries. These few tech stocks are driving the market. The bulls, say these bears, argue that PC sales are about to get better again. The bulls, say these bears, totally miss the possibility that we have way too much capacity since the general market is going to suffer and not be able to afford to buy these PCs. It's the same basic argument that was presented back in March in Barrons, the last time DELL was bashed in Barrons. Meanwhile, the stocks have continued to move higher. Why? Because there are few other companies that have as clear a mission as does DELL. And certainly you would be hard pressed to find any companythat executes as efficiently as does DELL. We do not agree with theargument that Fleckenstein presents. We didn't in March and still don't. Fleckenstein says that when the bubble pops, consumer demand could drop off dramatically and this isn't factored into Dell's price. Yes, DELL like all companies are hostage to consumer demand. But that will always be the case. So what else is new. He and Hickey made sure they hammered on their bearish views. They said that people are operating under the assumption that DELL's earnings will grow at a 50% or higher rate forever. 'Taint so, says Hickey. DELL's recent market cap of $80 billion is half of the entire PC's industry's annual sales. "When it goes, it'll be just like Amazon, bing-bing," says Fleckenstein. What tends to get my goat is that a big publication like Barrons will permit fear mongering in an effort to instill fear among investors. Fear mongering is a primary tactic of people who are short and want to push down the price of a stock. These tactics are what lead people to dislike short sellers. Most short sellers don't need or want to resort to such tactics. They are simply traders and opportunists who wish to capitalize on the downward movement of a stock. They don't feel it necessary to give it a push. DELL gapped up to as high as 111.25 Friday morning then fell to as low as 104.75 before finishing up on the day up by 1.44 points to close at 109.50. DELL split 2-1 after the close Friday and was trading flat in after hours trading. DELL plunged 9.25 on the week leading in to its 2-1 split after the close on Friday. DELL is sitting just above its 50-DMA which is serving as support at 107.50. Tuesday, the effect of Barrons article may be felt to some extent. However, the "Barrons Effect" hasn't been as strong recently as it has in the past. Keep in mind that some stocks have been subject to selling pressure on their split dates and DELL may well take a dip. If the markets show some strength, don't be surprised to see buyers swoop in and use any weakness as a buying opportunity. Optionable.