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

To: Geoff Nunn who wrote (82707)	11/29/1998 8:56:00 AM
From: Elwood P. Dowd	Respond to of 176387

Geoff.... another good parallel to the current internet stock craze would be the casino/gaming stock craze back in '92 or '93. Run up was totally momentum driven with no consideration to fundamentals or value. They eventually all tanked and only the premier company's stocks recovered, but even those never were quite the same again. A lot of late arrivals to the party got badly hurt. Some who got in early barely got out break even as it all fell apart so rapidly. El

To: Geoff Nunn who wrote (82707)	11/29/1998 9:56:00 AM
From: Jock Hutchinson	Read Replies (1) \| Respond to of 176387

Geoff: Interestingly enough, many investors who held onto their investment while the tulip industry "shares" cratered eventually made back their money, although in certain instances it took centuries. The better analogy to the Internet craze that began four years ago is the California Gold Rush. Any basket of Internet related stocks (such as MSFT, INTC NSCP, IOM, YHOO AOL BRCM etc) will over a ten year period yield enormous profits. All one needed to do was "Go West". Nevertheless, it is doubtful that there is any new institutional money going into Dell at these valuations, and while there are a number of institutions that have publicly avowed to hold onto the vast majority of their Dell Shares, many have also mentioned taking a little bit of money off of the table. I am well aware that Dell has a better product (including great service)in its field, but it is not so easily distinguishable from other similar products, since the core ingredients are made by companies other than Dell. This relegates Dell to three areas of expertise--assemblage, service, and marketing. And being the leader in PC sales over the Internet is a lot like being the leader in selling hamburgers to a growing suburban America in the '50s. But, no matter how you look at it, Dell does not have proprietary intellectual capital for its product as currently does Microsoft. I am not suggesting that Dell is terribly overvalued like YHOO or its brethren. I am simply stating that Dell is overvalued going forward--that it's days of tripling every year are over, and that a more reasonable valuation would now put this truly wonderful company at 45.The time to look elsewhere for the nimble investor has come.

To: Geoff Nunn who wrote (82707)	11/29/1998 8:40:00 PM
From: PAL	Read Replies (2) \| Respond to of 176387

Hi Geoff: As I have posted before, a dialog with you is intelectually stimulating and challenging, yet, mentally exhausting. You made many excellent points in your argument such that I never beat my brain this heard since my day defending my dissertation. You are bringing the notion that e-commerce has the earmarks of "pure competition". In that you agree that there is no perfect market and no pure competition. I have left the academic field many moons ago to enter the business world. Those economic theories about pure competition surely need constant revisions. I wonder if that textbook by Nobel Prize winner Paul Samuelson is still No. 1, and has he revised the book to include the internet revolution, the Laffer curve/ supply side economics (Democrats call it VooDoo economics). The landscape of the economy has changed dramatically. The days that resemble "pure competition" where wheat is just wheat, potato is just potato, pork belies are just pork belies are distant past. Even in organically grown items, there is genetic engineering, people are more choosy in their taste, health etc. The rate of obsolescence (technical as well as economical) is shortened at an amazing rate. I just got Dell 450, an excellent computer, yet it will be outdated a year from now. I agree with your against Jock's view of computer being a commodity. Look at how many patents Dell has. Bachman faithfully posted the new patents obtained. Now, how come Dell is beating CPQ? The answer is that Dell has better QPC: Quality, Price and Customer Service. Dell has innovation for reducing inventory to 7 - 8 days. Etc. Etc. Then let us extend this to e-commerce where you project the prospect of profit is so bleak since e-commerce engage in commodity. I happen to think that the future of e-commerce is bright for companies such as Dell (yes also for Amazon, Onsale, Ubid, etc) for many reasons, among others: a. The main business they are taking away is those traditional stores/ malls. Granted that not all business can be taken away by e-commerce such as specialty stores where women like to try before buying. b. In the competitive world, the strongest prevails. An early entry has many advantages: you learn from experience, you establish name recognition, etc. Ten years ago Amazon was associated with a jungle where the river is full with piranhas. Companies entering the market at later stages might not be as successful as the early ones. (there are exceptions of course: one can cite Apple computer, Sony Betamax, etc). Just look at Dell: innovation of direct sales. CPQ now tries to emulate Dell. This is such a joke in the theme of Wily Coyote chasing Bugs Bunny. c. Razor thin margin: When e-commerce blossoms, you are right, but for companies like Wallmart with high overhead/fix cost. Competition among e-commerce will come to the level where economist call normal profit. The best in reducing cost will get higher margin. Companies with financial strenth can buy in quantities. Therefore consolidation among internet companies will continue. (AOL/NETSCAPE, YAHOO with ONSL maybe? Even MSFT has teamed up with AMZN). I have more, but I think you get my drift. Regards, Paul