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The original version can be found at http://www.techstocks.com/~wsapi/investor/newsletter-64 To get The Internet Financial Connection newsletter e mailed to you for FREE, send an e mail to <"mailto:ifc-request@mLists.net"> and write "subscribe" in the body of the letter. J. Michael Pinson, creator of The Financial Center tfc.com provides the following interview. His latest commentary can be read at his web site by clicking here. The last time I interviewed J. Michael Pinson was on Jan 12, 1998. What is truly phenomenal is that all the stocks he was bullish on went up. Those stocks were; Western Digital, Dell Computer, Compaq, Adobe Systems, Pfizer and Merck. His two favorite sectors continue to be technology and pharmaceuticals stocks. He is very bullish on the long term outlook for both sectors but is cautious for near term because both groups have done extremely well since the beginning of the year. His favorite pharmaceutical stock is Merck. "It is the best, most conservative long term stock to have in a growth portfolio... They spend over $1.2 billion in research & development... Merck is the Dell of the pharmaceutical industry," he says. As for Western Digital, he believes that they will have a turnaround on earnings sometime during the September quarter of this year and recommends that their shares be accumulated on weakness under $19 per share. Click here to read the previous interview with him. J. Michael is a world renowned and influential Dell bull. He has been following it since 1988. Below is the interview. Q: What is going on in the technology arena? A: Dell, Microsoft and Intel are forming a huge alliance going into the next few years to deliver low end and medium range corporate servers, which will include web servers. Sun Microsystems is at risk of loosing market share to the Intel style platform. We ran into several problems when trying to purchase a web server from Sun Microsystems. Such as; 1) They do not sell computers direct and have sales agents. I spent a vast amount of time getting quotes from multiple agents. 2) It took 3 days to get a quote from a Sun representative and that quote was incorrect because it was not the hardware structure which I requested for the server. 3) Sun's operating system is not user friendly. I will admit that their workstations offer tremendous power, it is one heck of an operating system and fast but for most smaller to mid range corporations it is an overkill on technology. It would be like buying a Space Shuttle to fly from Tampa to Atlanta, you don't really need it. The price of a comparable Dell server system is anywhere from 25% to 40% below Sun's. Dell offers outstanding service! I had multiple detailed questions answered. I received a full quote in writing that was sent to my e mail box within 5 minutes after I hung up the phone with them. S: Thats service! A: There is no doubt that they are outservicing Corporate America when compared to Sun. I spoke to regional and local Sun representatives trying to get answers to my questions and no-one had the answers. Another problem that Sun will have over the next 24 months is that a UNIX platform running Solaris 2.6 is so un-user friendly. The new Intel 400 MMX with a 100 MHz buss is a wonderful high speed platform. Dell has managed to take this technology and develop a dual processor. In the very near term Dell has a 6100 Server Enterprise line that will use up to 4 chips. Dell is currently working on a 6300 system that will incorporate the new 400 MMX chips scaleable up to dual, tri or quad MMX chips. The actual platform should be out within the next 60 days or less. The NASDAQ web site is using several of the 6100 Pentium Pro Quads for their web site. Q: So, Corporate America will be moving towards the Windows NT operating system? Corporate America is going through a dramatic shift towards the Windows NT server both on Intranets as well Internets. UNIX is a difficult platform to use. There is not a lot of people in Corporate America to hire that know this type of operating system really well. That is why those salaries are commanded higher. However, Corporate America is shifting very dramatically towards Windows NT. There are more people that use NT and that makes it easier to operate and manage. NT is also more user friendly. We raised our price target from to $110 per share in the near term For Dell. Q: When did you start following Dell? A: I have been following them since 1988 when they went public. Q: You have been aggressively recommending Dell since it was $10 per share, right? A:Yes, and for the record, we have only purchased Dell computers for our office. We have said that Dell is our favorite most conservative growth stock for 1998. We issued Dell as our favorite stock pick every December since 1993. Q: What about the people that do not own Dell, should they buy in right now? A: Right now market conditions are very iffy for the broad market. There is no question that it will be volatile. With that in mind, Dell could correct 20% off of its highs, short term it will go higher. Dell benefits dramatically from the Asian Crisis as compared to their competitors. Over 70% of their components come from Asia. Asia is going through a deflationary scenario where prices are declining, so, those lower prices for manufactured parts are very high in quality. Dell is having their component costs decline for its operations. They are benefiting from lower costs and less than 8% of their sales are derived from Asia. Do not be surprised to see Dell expand their operations into Asia in order to sell their computers in China more effectively. Q: It sounds like they have the best of both worlds. A: Yes they do. Microsoft is going to come in like a raging bull into Corporate America over the next 24 months with the Windows NT and they will gain market share over Sun's Solaris 2.6. We recently downgraded Sun to a short term sell. Q: Was there anything else you wanted to add on Dell? A: No, other than that, I can't wait to see the 6300 quad processors running with the MMX chips. The writing is on the wall what Intel, Microsoft and Dell have planned here for Corporate America. I don't know what Sun will do to compete with these 3 successful companies teaming up like this. Thanx Michael! | ||||||||||||
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