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Tuesday, September 16, 2008

IT falls into a black hole of demand


For the second time in a month, Dell is on the tape pre-announcing. Ingram Micro, the largest worldwide distributor of IT products, sang a similar tune. Dell says worldwide demand is still bad. Ingram Micro says Europe did not rebound after the summer as it typically does. Tomayto, tomahto.


Tech seems to be getting relatively inexpensive. But then again, it seems like everything else is getting cheaper too. I've bought a couple of stocks because they're cheap. They seem like mistakes now.


A couple of weeks ago I had suggested Dell belonged in the mid-teens. We're almost there. I have a feeling this collateral damage from the credit markets is likely to make you wrong even if you're right on fundamentals here. It's not like you see a lot of stocks jamming on good earnings.


Material weakness at Dell and Ingram Micro likely means ripples through the supply chain. Expect Q4 outlooks to come down pretty hard. HPQ looks pretty vulnerable as they're a big Ingram Micro supplier.



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