Hi Jock,
With all due respect for your viewpoint, I will like you and perhaps others to understand your accurate statement that IBD recently rated Dell a "D" in its Accumulation/Distribution ratings and perhaps to view that from a slightly different vantage point, as to determine whether or not, it, in fact, contributes to a correct conclusion.
Let us not forget that since that "D" rating, Dell moved up in its rating to a "C". The period of time that Dell was under a "D" rating was relatively short. Dell bounced into a "C" rating and since than, and up to the very present, remains a "C".
For those of us that follow this sort of thing, let us understand that it is an "E" rating that represents heavy selling. That was never to my knowledge given to Dell.
Dell, according to IBD, was never under heavy selling.
The "D" rating indicates moderate selling. The "C" rating indicates a neutral position that is, the buying and selling of the stock remains somewhat in balance. That is where we are now.
Some may conclude that the Dell stock is in a trading range. I think that Greg M. indicated for different reasons that this could very well be the case.
Based on the information I, had at that time, in order to provide a bullish spin at the request of a thread poster (full well knowing that it was insufficient and imperfect) used, an accurate mathematical application of my own imperfect understanding, to infer a yet unrealized projection, that the "C" rating was history. I meant by that, the "C" would soon become an "A" not that it would slide back to a "D" or worse yet an "E"!
Thus far, Dell remains a "C". That is the only correct statement we can make. We know Dell is now a "C". Now from that "C" you may of course make a case for the fact that it was a "D" before that and therefore .....( your post and your viewpoint)
However, from my viewpoint, I think I would prefer an understanding that in the recent past for a very short period of time Dell was a "D". Dell then moved up to a "C" and then review your further statements in that light.
We want the reader to know that since the "D" rating there was a positive upgrading to the "C" where we continue to be at present.
So I submit that the later and present "C" rating is the one in which we should be viewing as valid for now, and then proceed with your observations.
Having said that, I will say you make points that should be given consideration and I certainly will reflect on your statements.
Much as been posted on why Dell is not going to, and or will not appreciate to the degree that it did in the past. The arguments can be viewed as reasonable based on what we agree on and have some merit to us. The question in my mind to what degree do we agree?
There are some who contend that Dell will become a second class company worthy of selling ones shares (the sooner the better).To say that those arguments (those I have reviewed) have been less compelling is to make understatement take on new heights!
I believe it was LOD who (first came to my attention) drew a correlation between those who were using their Dell money to speculate on "Internet" stocks. LOD in effect said that when the rush to the Internet stocks begins to wane ( my words not his ) Dell will be back ( at least that was my recollection.)
In fact, a cursory look at those Internet stocks that have taken off, moving from "C" to "B" to an "A" at about the time I had thought Dell would moved similarly, might well have been the competitive dollar drain that I did not take into consideration at that time and that perhaps was foreseen by LOD and others.
It is not as difficult to predict that the Internet stocks would do well, as it was to predict that they would do well and at the indirect expense of Dell and just around the time when we would expect Dell to move forward again!
Moreover, while there is some evidence to support this idea that appreciable momentum money that normally would have been invested in Dell is being used elsewhere and to an appreciable degree in Internet Stocks, it doesn't completely wash away the fact that a company like IBM whose virtues I and others have posted on in the past, performed the way some of us would have hoped Dell would be performing now.
One may argue that there is a Dell momentum following, that simply shifted to the new big time money maker (.com )and that IBM attracted a different kind of investor. I find that to be a very compelling and plausible point of view. Perhaps there is more to it than that. Thus far all I can say with any certainty is that IBM performed to my expectations.
The Internet Stocks were an other story for me.
For those of us that, do not wish to speculate in that fashion (.com) for reasons of valuation risk etc., may find Dell is in a trading range right now. Buying and selling at points between the high and lows of the day can very well be accomplished successfully by some, perhaps not so for others, but for those that are engaged in that kind of activity, it generally perpetuates the trading range for a longer period of time (every buyer there is a seller vice versa etc.). So a "C" or better for this kind of successful player is a good thing.
It is less so for those who are long in the stock. They find that to a large measure they are either up or down a little from their last add on purchase of the stock. It has to be a source of concern and frustration to see your money doing nothing while others playing stocks that from our viewpoint are less attractive on the fundamentals and therefore they are making money in stocks that do not deserve the appreciation in stock price. Some of us may feel a little at a loss to justify these kind of returns from Internet ‘speculation' and more importantly the lack thereof from our investment in Dell.
To see that happen and to think that the money invested elsewhere that should be invested in Dell and thereby drive up our stock price, not happening, is not a comforting feeling. It can cause some to jump to the wrong conclusions and or chase a rainbow about to disappear into the sun. (No short term Internet predictions intended).
Perhaps some will be shaken from their stand and sell and thereby cause the stock to continue to disappoint some of us. We are going through a different and difficult period. It is not easy for me to sort out and correctly conclude with a high degree of probability that you are wrong in your observations. No doubt there are challenges ahead. IBM did not become what it is today without having some difficult and painful adjustments to make.
Dell it would seem has been doing rather well. One can look back and see very few mistakes made by Dell in the past. I just would like to point out that we really need to be a little careful about concluding that negative sentiment will build about Dell. Remember Dell stands on very strong past performances, strong leadership and great opportunities are ahead.
Some simply say, look whatever the problems are out there, I believe that Dell will continue to get more of whatever is 'getable'. If so, than I'll make money with the stock. So unless I can find another stock that is better for me, I'll stay where I am and perhaps continue to add to my position.
Many points of view, thanks for sharing yours.
Regards,
Qt
PS Accumulation/Distribution is only one of five different ratings supplied by IBD. The other four IBD ratings as of today show Dell as 99-97-A-A. That is, as you and others should know, a pretty good report card!
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