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<<I personally think the long-term risk/reward here is fairly nice. This is a growing market market niche that has never really been particularly exclusive. There are still many large players (Dell, Compaq, Gateway, IBM, HP). The only company threatening to put anybody else out of business is, in fact, Dell.>>

Dell is a wonderful company, and I own more of Dell than any other company in my personal portfolio. But I'm not sure I'll hold Dell another 10 months, let alone another 10 years. There is nothing proprietary about what Dell does. Dell has a great brand name, but so do IBM and Compaq. Gateway has also start their version of a build-to-order strategy, as had Micron Electronics.

In short, everybody is trying to be like Dell, and many of the companies trying have far more resources than Dell has. I am absolutely delighted to be a Dell owner (and very thankful to the management and employees). I might buy more Dell stock in the near future, although I have no immediate plans to do so.

On the other hand, I can't see buying Dell and committing to holding it for 10 years in the absence of something extreme. Dell's business model is first out of the block, but it hasn't really been tested against competition. As it is, the gross margins are low, although the net margins are sufficient (and actually rising a bit). Let's see what the net margins look like when Compaq, IBM, Gateway, and HP are all selling most of their computers direct. If Dell's net margins are still 10%, then I'll probably still be holding my shares and I'll be all for bringing Dell into the CK portfolio.

Al
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