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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: BGR who wrote (60729)	5/26/1999 10:52:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

BGR, I use a regular CAPM model that I've modified slightly. The key is the inputs. I see growth rates sliding and you have obviously missed those announcements. Interest rates are also up a lot, so the valuation of the stock has to be reduced for that. And, of course, Y2K and the fact that they no longer have positive surprises has to increase the beta. I disagree on who pays what to whom when. Dell has run too many receivables dumps to believe that one, and my guess is that the notebook screen people take their money up front now that they have a shortage. And, I don't think we have even scratched the surface of their "contra-revenue" situation, which is different from Compaq's, but, IMHO, still in existence. You need gangbusters growth every quarter to bail that out, and that is a phenomenon of the past. And who really cares about models. The market has agreed with me since January, which is what really counts.

To: BGR who wrote (60729)	5/26/1999 11:43:00 AM
From: Freedom Fighter	Read Replies (2) \| Respond to of 132070

BGR, >>PB, which is inappropriate IMO for most high-tech companies and in particular for DELL<< IMHO price to book is irrelevant for all companies. What is relevant is the company's sustainable average return on invested capital. The higher that return compared to alternative investments the more valuable those assets are and vice versa. As always, and as we all agree the key is the inputs and estimates of those returns. Wayne

To: BGR who wrote (60729)	5/26/1999 10:18:00 PM
From: Earlie	Read Replies (1) \| Respond to of 132070

BGR: With respect to Price-to-book: It isn't a "model" thing with me. It's just that, as I pointed out, less than a handful of stocks ever get to 50 times book, and when they do, they inevitably make superb shorts. Personally, I think Dell was, is and remains a great short because it is in a lousy business at a lousy time to be in that business,....supply massively submerging demand. Dell does a good job of BTO, but so what. The company is a superb marketing organization, but again, so what. The problem for Dell is the same for ALL the players in the PC game. Too much supply, and a saturated market. Dell's other problem, again as I have pointed out, is that they are not competitive at the bottom of the PC market sales spectrum, and that is where all the action is. If you're still long this puppy, I would suggest some reconsideration. Michael hasn't been selling his stock at the legal limit because he thinks it is going to go up. It's still in never-never land based on normal valuation parameters. Best, Earlie