RatcliffeBlog - Mitch Thinking Out Loud

I've been saying it for...

I've been saying it for two years: Dell is the winner

But the winner may be taking steps to prepare for worse. Michael Dell has sold about $300 million in stock in the past week, about five times what he sold in 2002. The stock is near a 52-week high and the company reported its best quarter ever on May 15.

Now, everyone I talk to in tech is saying their projections for the coming year are heading lower and, despite the upward revision in economic growth during the first quarter business spending is still way off a recovery trajectory:

Current-production cash flow (net cash flow with inventory valuation and capital consumption adjustments) -- the internal funds available to corporations for investment -- decreased $11.4 billion in the first quarter, in contrast to an increase of $14.0 billion in the fourth.

The only reason for the adjustment upward is that consumers keep spending and consumers keeping spending using debt, which can backfire. Forbes says the economy has legs. CBS has a more balanced view. Yes, legs, but wobbly ones. Maybe that's why Michael Dell is selling.