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

To: Mao II who wrote (79621)	11/13/1998 7:04:00 AM
From: KM	Read Replies (1) \| Respond to of 176387

Wrong! Rear Echelon Revelations: Dell Whisperings By James J. Cramer 11/13/98 12:15 AM ET I can't believe that I am 43 years old and I spent the whole day chasing down Dell's (DELL:Nasdaq) whisper number. More important, I can't believe the whisper number is all that mattered. But if you want to understand Dell's trading, you have to be clued in to the whisper. If you are not, you are clueless, dumb as plywood, as I like to say around the office. So, there I am after the close, dutifully noting Dell's blow-away sales from the Net, the beautiful earnings model, the ga-ga east Asian sales at a time when Colgate (CL:NYSE) can't sell these folks toothpaste, and all the while, out of the corner of my eye, I am watching the stock sink from 69 to 65 in after-hours trading. Like Dell blew it or something. Worse, the stock slices through to 64 during the incredibly upbeat conference call, as the company outlined its so-far-successful bid to take over the world through a systematic increase of sales -- most of it through the Net -- off of an already stupifyingly large base. It is going down all because some clowns out there, notably the anonymous whisper-mongers, were looking for 29 to 30 cents instead of the duly reported 28 cents. So, what do I do? Brave and foolish soul that I am, I buy. I take $65 stock in Instinet, 25,000 shares to be exact, while I crank through thoroughly beaten models and make my calls to hard-working analysts hoping to catch a bit of off-line reassurance that things can stay hot for Dell. And now I have to wait. I have to hold out that the one negative -- the potential for the Net margins to be a smidgen below what some might have wanted -- coupled with the inability to hit that whisper are discounted in the seven points that this stock now sits from its intraday high. Of course, the high-stakes game I am playing is at the most rough and tumble margins of capitalistic valuation. Not only must I consider the true state of supply and demand of the industry, as well as the world's economy and the cost of the components that go into a Dell, I have to worry that this company can continue to execute in the style and panache it has done for so many years now. All the while in the background I have to be concerned that cruise missiles must brave potential meteor showers to hit intended targets, even though it may not do any good, anyway! On top of that, I have to overlay where the stock has come from, where the stock seemed to be headed and what will be the reaction of people who are so conditioned to seeing Dell blow away numbers and then guide people much higher in their next year's estimates. Will they be so disappointed as to hit $63 bids in the a.m.? Will they still jettison it down here? Will some analyst downgrade it because he fears that a $62 offering awaits us? Will another analyst downgrade it to make a name for himself or generate a self-fulfilling prophecy? In the end, what it comes down to is the whisper. If the stock were at $72 and it missed the whisper, you would have some tough sledding. I know I would be bobsledding out of there, if for no other reason than to beat out the next guy. Now, I am betting that, at $65, you can focus less on the whisper and more on the fundamentals, which are -- like it or not -- on fire. Guess it won't take long to see if I am wrong. Boy what a humbling business.