Kevin Stecyk

Acquisition Of CDW Highlights Challenges Of Shorting On Valuation Alone

I appreciate your comment Alan. Nobody bats a 1000 in this business, and Fleckenstein and I are no exception.

While I can't speak for Fleck's complete thoughts, I had compared CDWC to other companies such as Insight Enterprises, Inc., (NSIT) which is very similar to CDWC. As a person who shops for computer peripherals, would often compare prices on both sites. I usually found that CDWC had a better organized website, but slightly higher prices. Recently, however, I found CDWC had better prices too. I suspect that the pricing situation changes from time to time.

Given that these two companies are in the same industry, I expected that both would trade in the same general neighborhood, using the usual parameters. But CDWC traded significantly higher. As a customer, I found the biggest difference between the two companies was the website. Could that be fixed? Is CDWC's moat that impenetrable?

Obviously I bet the wrong way. It'll happen again.

<i>The company proved to have a better business model than DELL. You don't have to be vertically integrated to serve customers.</i>

No question Dell has struggled. I am not so sure that their direct to consumer business model is at fault. Rather, I suspect it has more to do with customer satisfaction, cost structure, and bulky and ugly designs. Apple Inc. (AAPL) is a study in contrast.

I agree with you that you don't have to be vertically integrated.

Again, thank you for your comment.