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

To: Michael Bakunin who wrote (109256)	3/12/1999 2:30:00 PM
From: lebo	Read Replies (1) \| Respond to of 176387

news just out Rumors Dell migh buy IBIS-Based IBM products That's a huge opportunity for DELL

To: Michael Bakunin who wrote (109256)	3/12/1999 4:49:00 PM
From: BGR	Read Replies (1) \| Respond to of 176387

Michael, Any model is just as good as the data that goes into it. You write: Assume five years of 40% growth (questionable), and perpetual "stable" GDP-like growth of 2.5%. Unless you expect the growth of the high-tech industry to slow to low single figures as well, this is not very plausible. The high tech industry is presently growing in the mid teens. If it's growth slows down to match your expectations, the US economy will probably be in a recession. If that's what you are expecting, then you are making the appropriate decision to buy puts. I am not, so I am buying calls. but using less-aggressive, 5-year growth of 20% cuts it to a sell (PV $40) This counters every single published estimate of DELL's growth that I have seen and the rationale presented! But it is true that you may be right while everyone else is wrong. ;-) -BGR. PS: BTW, 20% is still pretty aggressive.

To: Michael Bakunin who wrote (109256)	3/12/1999 8:58:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Well there you go, Michael! I gave you a hypothetical on why investors invest. Now since you agree with the general model (not the growth rates or the discount rates -- those were purely fictional to get the dialog off dead center) the focus ought to move to the perceived growth of the company's cash flows. It is my conviction that Dell's recent moves have repositioned the firm from a consensus 35% per annum growth trajectory to a more more dynamic situation. The evidence is clear that Dell has launched a multipronged marketing offensive aimed at the high end: (servers and mass storage), and the lower end (inexpensive PCs), and finally at the retail market (through gigabuys). There is considerable speculation at this point that Dell may take over IBM PC assembly and distribution, plus Garielle Dubois has indicated that the gross margins are like to expand by about 1% due to the elimination of royalties to IBM. Considering the fact that Dell is positioning itself for a very nice future and that your put options are wasting assets I would think your sleep might be a bit troubled. TTFN, CTC