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

To: John Koligman who wrote (69194)	10/5/1998 11:22:00 AM
From: rudedog	Read Replies (1) \| Respond to of 176387

John - I had an extensive dialog with Drew on the CPQ thread, here's a sample... Drew - You have a way of twisting everything around. You were the one who commented on CPQ's share of the consumer market with the statement that Dell and GTW were pounding CPQ, not me. I was just trying to understand what you were talking about. Why do you own 48,000 shares of Dell???????????????????????????? This to me is one of life's biggest mysteries. Because I like making money? Because I think Dell is a great company? Because I don't want to take the cap gains hit on this investment? Because I think Dell is one of the safest investments right at the moment, especially in a potentially deflationary environment? I have NO plans to sell either Dell or CPQ any time soon (as in the next 12 to 18 months) and may not sell either ever. I have some CPQ stock that I have held since 1992. You obviously think CPQ is the greatest thing since sliced bread. Drew, I don't confuse my investment strategy with cheerleading. My portfolio will not go up a nickle if I pretend that Dell has market share that they do not have. Likewise it will not go down a nickle if I dig up the real information on what's happening in the market among the various companies I have invested in. I believe that CPQ and Dell are the two best companies in the volume computer segment. They are very different companies and will be affected by different market conditions, as we have seen clearly over the last 5 years. This is not the Bulls vs. the Rockets. I can actually be a strong supporter of both companies, for different reasons. Let me put it this way. If you believed that Dell would never be #1 in any segment, would never be bigger than #4 overall, and really believed that in your heart, but you also thought that their overall business would remain strong and revenue growth would continue along current trends, would you sell Dell? If so, why Then, in a response to Eddie Kim Drew sure loves Dell. He believes this is a sports event with one possible outcome, someone will win and someone will lose. Therefore anyone who has a diversified techs portfolio (i.e. did not sell everything and BUY DELL with the proceeds) is not of the true faith. I think the critical question for Drew is the one I asked him in my last response to him. But I can make that statement stronger. Let's say we found out that MSD was not the paragon of integrity we have heard about on the Dell thread, but in fact had engaged in a number of questionable business practices and was under investigation by the SEC, DOJ, and a consortium of state attorneys general. Let's also assume that CPQ successfully clones Dell's direct model and outsells Dell 2:1 in the commercial desktop space. Finally, lets assume that Dell begins losing share to a new, aggressive IBM 'company within a company' when IBM buys GTW. Now assume that Dell, despite these setbacks, shifts gears, gets heavily into internet services, builds a fast growing e-commerce business, and Dell's stock price continues to go up. Under those circumstances, I would still hold Dell, in fact I would be a buyer. A company which can successfully confront adversity, and remains nimble in the face of changing market conditions, is a much safer long term investment than a one-trick pony. But someone who invested in Dell only because they believe MSD is a great guy, Dell's magic sales model can not be addressed in the market by any competitor, ever, and that Dell will therefore conquer the PC world might sell. Oh well... As I have said many times, I invest in companies because I think they will give me a good return. If I like the management, so much the better, but it has little to do with the potential value of the stock. And Finally, From Lwolf's excellent posting on this thread From: (Q is money mag, A is MSD) How Dell stays on top - CEO speaks October 1998 MONEY magazine Michael Dell sounds off on Compaq, the iMac and the joys of market share. Q. A lot of people on Wall Street had been saying that your stock had gotten too expensive, especially before the market's late-August melt-down. Does Dell's valuation ever make you nervous? A. I get uncomfortable when I don't understand why investors are buying the stock. When people don't understand our business and they invest anyway, that's scary. Message 5910464