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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Arik T.G. who wrote (6349)	2/15/1999 10:36:00 AM
From: Kerry Phineas	Respond to of 99985

Arik, you were good last week, and you did a great job calling the internets this time around. re Dell... Dell is in a commodity business but has had a few advantages for a surprisingly extended period. Nobody has advantages forever without significant barriers to entry, especially in PC manufacture, which is one of the perfect examples of commodity businesses. 1. They haven't had to pay resellers, as their competition has had to do. This gives them some extra room re their margin and limits their inventory risk. Can't last forever. 2. Salaries have been lower than competitive levels because of the good old stock options as salary scam. 3. Manic stock price = free advertising. 4. Dell has been shameless about touting, as compared to INTC and MSFT which are considerably more reticent and of course MSFt is much more Machiavellian. 5. Dell sells puts against their stock, which improves their bottom line assuming the stock goes up. 6. PC growth is arguably starting to slow. OTOH, I'm sure they can cook their books for a while by easing their credit standards like GTW.