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

To: yard_man who wrote (103166)	2/19/1999 7:21:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Tippet, Dell did not lose market share. There is no way you could convince me of that on the basis of the data we currently have. That is the point I have been making over and over again. Let me try this simple analogy. Suppose you have two merchants, one of whom chooses to close his doors on Sunday, and the other who stays open 7 days per week. Let's assume that there is no growth involved, and year over year each merchant sells exactly the same amount of merchandise. If you were to look at Sunday's sales you would see something like Merchant A sells 10,000 widgets and Merchant B sells 0 widgets. Would you now claim that merchant B has lost market share? Of course not. But that is exactly what MB and his minions are claiming. The only ways that the data make any sense is to either seasonally adjust them, or do what Gabriel Dubois did -- view them on a rolling 12 month basis. Otherwise you end up jumping to unwarranted and unsupportable conclusions. You also said: Bottom line DELL has to follow growth -- even if it is into lower margin business. I disagree. You enter into businesses only if they are likely to increase shareholder value. If a business does what you suggest they could become another AMZN -- generating lots of sales and no profits. That's not the kind of company I'm interested in. You pointed out that Michael Dell said In fact he admitted that DELL had sacrificed sales for margins. and that is true. But do not mistake profit margins for profits. There is a vast difference. Notice for example that 8.2% net profit margins generated 170% ROIC this quarter. So when you point out they could have sold more boxes, if they had targeted consumers, but margins would have suffered. you miss the point. It isn't the margins that count, it is the total profit (or cash flow if you prefer). TTFN, CTC