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

To: James A. Shankland who wrote (129762)	6/2/1999 7:00:00 PM
From: D.J.Smyth	Read Replies (1) \| Respond to of 176387

James <<In the long run, markets do value businesses reasonably accurately>> conversely one can argue there never is enough time to value a business reasonably accurately as time continues as a moving target, therefore "mood swings" as you call them, is principally helping move the market. there's also the question of what is "reasonable". if Dell is reasonably valued with a 40% growth rate trading at 33 times next year's earnings in a market where at least 83% of the world STILL has no computer (and i suspect would like to have one), what is unreasonable? Dell captures mindshare, therefore captures sales (but in what order?). Someone had previously posted that Dell's share of the Chinese market is paltry therefore it will have little cumulative affect on Dell's earnings over the next few years. They were comparing Dell's market share to Legend's (a local Chinese brand) and stating that Dell's comparative PC prices are a stumbling block to growth there. However, Dell made a fortune in the U.K. off of a similar situation, competing against a local producer called Amstrad. Amstrad's approach was to sell cheap "disposable" computers - since technology was changing so rapidly they figured the inexpensive computer was the way to go. U.K. businesses and residents quickly learned that buying an unreliable, poorly supported system was not the way to go. Amstrad had nearly 70% of the marketshare at one time in the U.K. Dell helped change that. Dell sold a different idea to the U.K. public and they bought into it. The same is principally true of Legend in China. Legend currently has the largest market share in China and sells an inexpensive unit which has proven to be unreliable relative to U.S. manufacturers. Hong Kong can't run their businesses on unreliable systems; nor can Shanghai. there are more high rises going up in Shangai than any other city in the world, and if I recall, they're now the most populated city in the world. Hong Kong supports more population than New York City. Cheap computers won't cut bait for the necessary tasks in these two Chinese metropolis'. Chinese geography also plays a part in Dell's growth there. Transportation is a task in China. If a system breaks down, Dell's method is proving reliable for the fix. All these variables have been playing into Dell's growth there. And so Dell is experiencing 100% growth there. Dell must be capturing mindshare there too otherwise the growth wouldn't be there.