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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (277)	2/21/1999 6:58:00 PM
From: Tony Viola	Respond to of 54805

Uncle Frank, I have a question and the answer will be BUY THE BOOK. OK, but before I do, is there any provision for minimum R&D expenditures, or efforts, in the company's consolidated earnings statement as a necessity for G or K inclusion? The reason I ask is that I just reviewed Dell's recent quarterly statement. Their R&D, expressed as a percentage of revenues, is 1.5%. That is incredibly low, like one fifth to one tenth that of "real" technology companies. Now, I know Dell does mostly box assembly, rather than any design. They rely on Intel and a bunch of other people for that. But still, 1.5%, and that was down from 1.6% in the quarter before that is nothing. They should, IMO, be doing something in the order of forward looking research into what may be coming down as new in technology in microprocessors, software, memory, internet connections, etc. My bottom line is that I don't see how a box maker can be considered a G or K. Any inclusion of Dell into those would be based on stock performance only. They may have a great made-to-order model, ordering on the web, and everything, but who couldn't copy that? As if Dell didn't have enough bashing lately, now from a neutral. Tony