Saturday, February 18, 2006

The value of this truth telling Journal

I hate to see poor individual investors screwed by the rich. Enron is a good example. WorldCom is another. Many less informed, less intelligent and gullible people got financially ruined by high-IQ crooks.

DELL reported after Feb 16, 2006 market close, it claimed that Dell Delivers Strong Performance with Record Revenue and Earnings for Fourth Quarter, laiden with hyping messages such as "strong growth" and "strong profitability" "across all regions" and "across all segments". The media echoded. USAToday: Dell sets revenue record for 4Q; Reuters: Dell Q4 earnings rise, Dell sees industry-beating growth in Asia for '06; AP: Dell 4Q Profit Soars 52 Percent to $1.01B; CNN Money: Dell beats the Street....

DELL's stock jumped momentarily after hours, some DELL investors got really excited, INTEL investors were even more excited.

I knew it was impossible for DELL to beat, outdated INTEL 32 bit technology doesn't sell. No matter how much lipstick you apply to a pig, it's still a pig. So I took a look at DELL's report, and wrote "DELL: the real story". It analysed the core businesses of DELL, and showed that DELL's revenue was in sequential decline in the holiday season. I also pointed out that DELL and INTEL are in perfect sync, and DELL's weak January is a bad omen for INTEL's 1Q06.

Wall Street is no fool. DELL's stock plunged big time the next day, as people started to see the real picture.

3 Comments:

Blogger Sharikou, Ph. D said...

I had revealed my trades here before DELL reports.

5:14 PM, February 18, 2006  
Blogger Sharikou, Ph. D said...

For my record, DELL dropped $1.60 (5%) and INTEL dropped $0.69(3%) on Feb 17, 2006.

5:26 PM, February 18, 2006  
Blogger Sharikou, Ph. D said...

My DELL and INTC puts are doing nicely, as INTC is trying to sink below $20 after being downgraded to sell with target in the teens and DELL showing all signs of trouble. I really expect my DELL puts to reach its theoretical max value at Enron time.

7:47 AM, February 22, 2006  

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