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

To: BGR who wrote (99050)	2/14/1999 3:08:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

BGR, I am talking about long term (30 year) rates. In any event, 75 basis points is not nearly enough to account for the kinds of price run up we are seeing now. But let's take a hypothetical to show what the effect of a 75 basis point drop would have on a 30 year fixed income security (this is hypothetical). Suppose we have a drop from 6.5% to 5.75% the value of the security would have increased by about 10.7%. This is much less than the observed increase in Dell shares. I don't follow th fixed income market that closely, so pleas adjust these numbers to reflect what the actual changes in 30 year fixed rates are of the period of time in question. But for the sake of argument, let's assume that the price of Dell shares increased by that amount due to dropping interest rates (11%). This is still much too small an to account for the rapid increase in Dell's shares. If Dell had been trading at roughly $65 shortly after earnings were announced, an 11% increase due to falling interest rates would price the shares at $72.15. But the run from there to $110 wash still 52.4%, or 132% annualized. TTFN, CTC