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

To: JRI who wrote (95766)	2/7/1999 3:49:00 PM
From: Chuzzlewit	Respond to of 176387

John, I think what you are doing is compounding suppositions. You are supposing that the overall market will continue to throw money at stocks simply because the price of the stock has risen in the past. I think that this phenomenon exists, particularly in a "flight to quality" mentality. And much of this mentality exists now. With economic troubles plaguing much of the world, foreign investors seem to be more comfortable putting their money into large cap familiar names like the nifty fifty. Then too, we have the continuing investment in various large-caps coming from various retirement accounts. So your investment decision becomes a legged-stool, two of which are momentum driven. But suppose that one day a bunch of fund managers look around and say to themselves that it doesn't make sense to throw money at stocks with a prospective earnings yields of only 2% simply because everybody else is doing it. Maybe we should take our money and put it into companies growing just as fast, or faster, with prospective earning yields of 5%. Or suppose that an economic turnaround hits Asia and there is a strong likelihood of significant repatriation of cash from the US markets. Or suppose that there is a recession and the 401k money dries up in a hurry. Any one of these scenarios could seriously damage your portfolio (especially if you are committing new money at currently high prices). So are you a momentum player if these are your considerations? Maybe momentum is too strong a word. Maybe a trend player is a better description. But as one who often screams that the emperor has no clothes, this is a game I choose not to play, and that's why I am nervous about Dell's price. A prospective earnings yield of only around 2.5% and the likelihood of decreasing growth makes me twitchy. TTFN, CTC