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

To: Todd E Godwin who wrote (116873)	4/12/1999 11:34:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 176387

Well you are going to get your ass 'whupped' again,remember you heard it here first. In case you haven't heard the PC war is over,only two playesr are standing now ie DELL and Dogway,the former towering head and shoulders above the other. I hate to rain on you parade but get ready for more pain with your 'short' and that is no joke.

To: Todd E Godwin who wrote (116873)	4/12/1999 11:39:00 PM
From: Ian@SI	Respond to of 176387

I shorted Dell today at 41 3/8. Eureka! He's short! Yep, I sold 1000 shares of Dell to someone today. I'm already losing money on that trade. Dell will probably gap up a little in the AM. If Intel reports good numbers, it will go up more. It may get caught up in the overall warm fuzzy of the current market. No matter. In the long run, I think I'm right. Todd, You appear to have a good story supported by both facts and logic. As such, I would normally expect you to do well. However, you're 1. shorting the emerging leader. what is the catalyst that has you convinced that Dell is about to be permanently off stride? 2. not giving Dell's management sufficient credit. They didn't get the best strategies, organization, processes and people / job structure by failing over and over again. Dell has a track record for learning rapidly from its missteps; It has consistently treated the overall company as a system and done a better job than any in its sector of generating innovations, which, in turn have resulted in excess profits. Surely there must be much less effective companies with higher multiples that you would stand a better probability of winning should you short them. What leads you to select a company where the odds of winning on the short side are so low? Ian.

To: Todd E Godwin who wrote (116873)	4/12/1999 11:48:00 PM
From: Michael Kucera	Respond to of 176387

CPQ can't keep slashing prices forever, it's realllllllly hurting their bottom line as well as IBM's. We hear and see this garbage every year and every year the opposite happens and dell comes out on top. I suspect the same will happen this year all over again. Remember DELL just had an analyst meeting which was very positive so why would they turn around and NOT deliver on earnings day? Does'nt make sense to me to burn the Street like that, CPQ is learning that lesson right now.

To: Todd E Godwin who wrote (116873)	4/12/1999 11:49:00 PM
From: Rich Young	Read Replies (1) \| Respond to of 176387

Just two things: 1. re: "I think you're a little off base here. PC prices are coming down faster than their unit growth rate. The biggest PC maker in the world just came out and said demand is waning and that earnings are in the crapper." I think you mean FORMERLY the biggest PC maker. Dell said last week that things are fine. 2. I bought your 1000 shares at 41 7/16 (MM's got their nick). I bet you cover before I sell! Shorting DELL today is insane. Even the pontificous PIGMAN covered his short. Have you ever made money shorting DELL? Good luck, Rich

To: Todd E Godwin who wrote (116873)	4/13/1999 12:08:00 AM
From: Alohal	Respond to of 176387

Good luck to you Todd, you seem either very brave or...? to short Dell, especially at 41 3/8. Personally it seems a recipe for disaster. But who knows! Myself, I never bet against Dell. Your arguments have been voiced repeatedly on this thread and answered fully by a fair number of people extremely knowledgeable about the PC sector in general and Dell specifically. Like I said, good luck! Aloha.

To: Todd E Godwin who wrote (116873)	4/13/1999 2:22:00 AM
From: Craig Lieberman	Read Replies (1) \| Respond to of 176387

Todd, Bless you and your strategy. If you believe that DELL has topped and will not see the light of $55 or better, then go ahead and short. That takes guts and I respect that. Please let us know when you close out your short.. I like to keep track of these things... I am long a few shares of DELL and will continue to remain long. I also hold Dell calls of various expiration dates and at a wide variety of prices. You should NEVER be lambasted for posting a justified or rational post like yours. We just don't like unsubstantiated stuff. I happen to disagree with your premise primarily because of the worldwide expansion in China, India, Europe, etc; plus, the push into servers where the margins are significantly better and the competition has been really overcharging for years. Finally, the expansion of product lines represented by gigabuys and others to be announced (not yet a substantial contributor to the bottom line). Why would Dell put plans on the books to double their server production by building another larger plant if they didn't expect the business to need it? Finally, their competition can stay in business how long if they don't figure out how to get the inventory down to Dell's levels? How many more years of billion dollar losses in the PC business will the IBM board of directors stand? The direct model is winning the war and there is plenty of room to grow that model. I agree that DELL will grow more slowly on a percentage basis. How this will play out in the stock price is still to be determined. I believe that there will be a ratchet effect on the stock over the next year with expectations running high before the earnings and then adjusting down after earnings. However, investors adjust to the new environment rather quickly. Already, the expectations for DELL are NOT to grow by 50% and the stock price reflects that being down from its high at 55 (110 pre split) to the 30s. If DELL surprises the crowd, its back up past the high to new highs. If they meet exepectations, or disappoint on revenue or such, its back down into the 30s. You have a very good chance of closing out your short at a profit. Volatility will increase. For long term holders like myself, that makes the ride a little rougher. I pay for consistent high percentage earnings growth. I believe that other investors do the same thing. Even GE which grows its earnings at 13% per year or so gets a PE of around 40. Why? because of consistency. GE manages its growth very well. As Dell continues to turn in high to mid 30% growth, it will continue to earn its high multiple as a premium paid for that consistency. Craig

To: Todd E Godwin who wrote (116873)	4/13/1999 9:07:00 AM
From: edamo	Respond to of 176387

todd...re: shorting dell... never again to see new highs?...oh well...if you did believe this, a more logical and risk averse position would have been to buy deep put leaps, get a whole lot more leverage, limit any upside risk, establish any potential loss, and maximize your gain as dell wallows in never, never land....it seems you've gone against your "when the momentum breaks hard" statement of 4/7....no momentum break yet...and if you thought it would bounce on intc news...why not short the bounce????.... amateur night returneth... ed a..

To: Todd E Godwin who wrote (116873)	4/13/1999 9:16:00 AM
From: John Hauser	Read Replies (1) \| Respond to of 176387

Todd, are you trying to makes a name for yourself? Also, why short the best run company in the world when the stock is already discounted 30%? Foolish indeed, JH

To: Todd E Godwin who wrote (116873)	4/13/1999 10:32:00 AM
From: gnuman	Read Replies (4) \| Respond to of 176387

Todd, An intelligent post. I've been lurking around here for a couple of months and am amazed at the devotion to Dell in the face of a rapidly commoditizing industry. I get a kick out of the expectations that third world country's like China and India will drive PC growth. Here's a post I made some time ago which relates to that subject. MB, Internet Growth/Demographics and PC's Many people view the low penetration of World Wide internet access as an indicator of tremendous growth opportunity for PC's. I think this fails to take into account the barriers of language, infrastructure and opportunity. If one looks at the demographics of global internet statistics by language, a number of conclusions can be reached. (I've used the data provided by this site). euromktg.com The internet is dominated by the English language. English speaking users represent less than 6% of W/W population, yet 32% of this population have access to the net. When viewed in terms of households, (or family units), a case could be made we are approaching saturation in English speaking users. While fewer than 2% of non-English W/W population is on-line, the barriers of language and affordibility appear to be major impediments to rapid growth. The GDP per capita of English speakers is $27,236. For non-English it's only $4516. To me this indicates a major barrier to opportunity. A good case in point is China. While over 15% of W/W population is Chinese, the national average income is only $785.00. Clearly the PC is not a choice for the majority. While hundreds of millions of Chinese own TV's, only a few million have PC's. In recognition of this a number of companies, (most notably Microsoft news.com ), are in the process of developing set-top internet devices, (ala WebTV), for this market. These devices are expected to sell for <$200.00. (One could also speculate this might be a major force in driving PC's further into the low priced commodity arena). The vast majority of web sites are of no value to non-English users. By creating an infrastructure of Chinese dedicated content on set-top devices, I would expect this to be the future of the Chinese internet. Intel talks of 1 billion connected PC's in the future. Look at it this way, that's the equivalent of 1/6th of every man, woman and child on earth having a "connected PC". (Or about 2/3 of world wide households/family units being "connected"). This world wide shift to lower prices will eventually catch up to Dell.

To: Todd E Godwin who wrote (116873)	4/14/1999 5:24:00 AM
From: HeyRainier	Read Replies (1) \| Respond to of 176387

Todd, Good luck with your short position in Dell. At least you back your words with your money and logic, a rare combination for the average negative poster on these boards. I monitor closely Dell's technical strength in light of fundamental developments and perceptions surrounding the company, and for the most part in the short term, it appears that Dell's technical window of weakness is upon us. I say window because historically (yes, I am aware of the caveats) they don't stay open very long; it appears to open about 3-4 months at a time out of the year. Late '97 (October to January '98) was one such window, then December of '96 to late March '97 was another. Funny how the first quarter of the year is met with a seasonal weakness in price. On a longer term technical basis, Dell has few equals. Look at the persistence of the price relative to its various longer term moving averages. In every case Dell has executed and made the short seller reconsider his position because of its sustained market-outperformer status. (Ask a certain attorney on this thread who has held a short position during multiple splits.) The numbers speak the truth. One measure of management efficiency I use, ROIC, shows that Dell's ability to earn money for every dollar invested, exploded since their adoption of the ROIC-based compensation system. From annual report information taken from Quicken.com: Year ended, January 95 report ROIC: 24.8% Year ended, January 96 report ROIC: 26.4% Year ended, February 97 report ROIC: 65.3% Year ended, February 98 report ROIC: 72.3% ...and a recent calculation by Chuzzlewit showed a calculation of 132%. (By the way, wasn't the trend for PC prices during this time frame also down?) The last time I looked, these numbers blew Microsoft and Cisco out of the water in terms of relative efficiency. Not many companies can claim that. (FWIW, I calculated ROIC by taking a simplified calculation of NOPAT from the site, 'Income Continuing' and adding back 'Interest Expense' and dividing it by the Invested Capital portion of the equation: 'Common' and 'Other Stockholder's Equity' as well as outstanding debt under 'Bonds.' Chuzz, I'd appreciate your help if I stray). In 1995, Dell adopted a compensation system based on a matrix of ROIC and growth; higher performance directly correlated to higher ROIC, and therefore, higher compensation. You can see directly the effects of such a plan, for both the company and its shareholders. Will your short position prove wrong a company that has actively sought improvement on an ongoing basis, on a company-wide level, or will it be the other way around? Time has overwhelmingly chosen one answer to this question. Also, I believe Dell's move into the higher-margin server business bodes well for this nimble company, and if lower priced computers do aid in the future demand of these machines, then Dell will have turned around a potential weakness into a strength. Add to the above factors Compaq's recent strategic errors and the negative perception momentum surrounding it, and what we have here is a potential transition point where Dell can overtake the lead spot in the industry. These are powerful forces you have bet against, fundamental as well as technical. Again, good luck. Regards, Rainier