About BofA's Planned Restructuring

The business press and cable channels early this week were all abuzz with articles and segments about Brian Moynihan's plans to cut $5B of expenses and 30,000 net employees from the sluggish financial utility that BofA has become.

My take on Moynihan is aptly captured in these prior posts (here and here), with the second link containing a link to my piece written upon Moynihan's selection as BofA's CEO.

Interestingly, I noted in that last linked post, the one written in December of 2009, when Moynihan was named CEO of BofA, that he said he planned no significant strategic changes at the bank.

Well, it's nearly two years later, BofA is under legal attack for its Countrywide liabilities. Rather than hike the dividend or buy back shares, Moynihan did a generous deal with Warren Buffett to get $5B of additional preferred equity on terms no average investor would ever hope to receive.

And now he's planning on paring back the bank's massive consumer business, largely in response to Dodd-Frank's making those businesses- credit cards, debit cards, consumer lending, mortgages- structurally less profitable. Fair enough. The regulatory environment changed, so Moynihan is reacting, as Dick Bove contended, by retrenching in those areas hardest hit by the new laws.

But from an investment viewpoint, I see BofA as a toxic mess to be shunned for at least three years. Which is not to say that if you buy the bank's equity now, you might not see a big pop in 3-4 years. It's just that between the wait, and the risk of concentrating assets on a single troubled company, the return/risk may not be as rich as you think it will be.

My proprietary equity performance research found turnarounds of the type being attempted at BofA to be highly risky and usually a failure. Between the average total return gain and the chances of such a turnaround succeeding, the expected total return is far lower than investing in more stable, consistently-performing companies.

Then there's the nature of the sector and the bank. BofA has 288,000 employees and $27B in annual expenses, according to a Wall Street Journal article in Tuesday's edition. Thus, expenses are to be cut by 18%, and the net number of employees by almost 10%. But there's an unspecified churn in that employee number, as bank officials have said they'll fire more than 30,000, then hire some new people. That's going to be great for morale, huh?

You can imagine the amount of carnage that will begin to occur in focused businesses and locations. Chances are that expenses won't fall by the entire $5B, 30,000 employees will go, net, and revenues will fall further than Moynihan's optimistic planners expect.

These types of drastic downsizings tend to underestimate how the damage to morale throughout a large company will sap efforts to continue to just do business. Revenues in consumer businesses will likely decline by more than expected, and institutional revenues won't necessarily be immune, either.

Generally, firms which are cutting personnel and spending don't grow. Their total returns aren't typically attractive, either.

If BofA's cost- and personnel-cutting program was to spark a turnaround of some a sort that resulted in the company repositioning itself, exiting bad businesses, or entering promising new ones, there might be a chance that, a few years from now, the company would be an attractive investment.

But that's not the kind of restructuring that BofA is doing. Rather, it's trying to cut levels of spending on existing businesses, while shifting resources around among businesses it will largely still operate.

Worse, the same CEO who said two years ago he wasn't going to do anything substantially different, then said he'd push cross-selling, is putatively leading this effort. The first linked post I included above notes that Moynihan has no prior experience that would lead you to believe he has the slightest value to add to this project.

If BofA's board wanted to increase the chances of this effort making a difference for the company's shareholders, they should probably name Moynihan as a special counsel for mortgage-related legal matters, and replace him with a proven turnaround artist of the caliber of Robert Miller. But that's not going to happen.

Do you think that someone of Moynihan's limited banking experience, uneven corporate performance background, and generally legal-oriented skill set is the guy to oversee, let alone restructure, a company so complex as BofA, a modern global money-center bank?

I don't. It's Chuck Prince all over again.

And if Moynihan, by some miracle, succeeds in cutting expenses and headcount? What then? If you bought the stock now, took a lot of risk, you get a pop. Then it's back to your regularly-scheduled sleepy financial utility with little hope for breakout total return performances.

The truth is, banks of BofA's ilk- Chase, Citi, WellsFargo- are all pretty much similarly-organized and operated financial utilities. Aside from occasional timing plays, none are likely, for the foreseeable future, absent regulatory changes or serious breakups, to offer investors much hope of consistently superior total returns.

CNBC's Ford Turnaround Special

I remain unconvinced that Ford has effected a true, long-lasting "turnaround." As I discussed in this recent post concerning CNBC's special program on the topic, it's much too early to declare victory on that dimension.

Accidentally still awake early this morning, I saw some of the aforementioned special. I was unimpressed.

To be clear, Mulally deserves credit for doing some things which were necessary to stop Ford's death spiral. These included no-brainers like selling or shutting marginal brands, some of which had been foolishly purchased within the prior decade or so. And, yes, Mulally accelerated development of various new models.

But what struck me as I listened to all of these actions was how, well, obvious they were.

I have a high regard for Mulally's managerial skill. I believe I expressed this for his performance at Boeing, which foolishly failed to adequately reward him. So he was ripe for recruitment to Ford.

However, there probably are 5-10 good US senior executives who could have done most, if not all of what Mulally did at Ford. I suspect much of what Mulally was able to do was a function of Bill Ford and his family's realization at how badly they had run Ford into near-bankruptcy. They had, to use a phrase from Saul Alinsky's playbook, become unfrozen.

What were once-unthinkable measures had become acceptable, given that the alternative was corporate death.

Mulally was fortunate to be given so much latitude. I really doubt that, had he arrived five years earlier, he would have been so successful in halting Ford's slide.

This doesn't detract from what Mulally accomplished, but it does suggest others could have done the same, given his opportunity.

And it still doesn't mean Ford, and Mulally, have accomplished what would be a first- a long term, lasting ability to earn consistently superior total returns for shareholders. Which, to me, would constitute a true, enduring turnaround of Ford.

CNBC Stumps For Ford

CNBC is pushing its special program on what it calls Ford's "turnaround," which apparently airs on the network this evening. In support of the documentary, the morning program orchestrated an on-air debate/discussion involving the network's auto reporter, Phil LeBeau, ex-every US auto company senior exec, Bob Lutz, former Wall Street Journal senior exec and Pulitzer Prize winning author Paul Ingrassia, and one or two other pundits.

As I've contended in many prior posts, as well as Alan Mulally has run Ford since his arrival, it hardly constitutes an enduring turnaround.

Bob Lutz, amidst his usual gushing, pointed out that GM, Chrysler and Ford all nose-dived, in terms of share price, during the financial crisis of two years ago. Echoing Holman Jenkins' recent WSJ editorials, on which I wrote here and here, Lutz contended that Ford's survival and subsequent greater prosperity was a matter of luck.

As he said this, Paul Ingrassia grew increasingly agitated, shaking his head. Given the "last word" in the debate, Paul quickly cited some capital management facts regarding GMAC and Ford's borrowing pre-crash that he felt demonstrated Ford to be the better-managed of the two companies.

I would have loved to have seen an on-air debate between just Ingrassia and Jenkins on the subject of GM vs. Ford for the past five years.

My last Ford-centric post was in March of this year, on the occasion of Mulally's interview in the Journal. I won't quote extensively from it, but merely observe that Ford has, for decades, experienced a sort of boom-and-bust pattern.

It's not hard to see why CNBC wants to do a big Ford special, is it? They showcase an advertiser, ensure continuing, and better access to Mulally and various Ford debuts, and, in my opinion, prematurely anoint the company as a turnaround wonder.

The problem is, as I've written before, one of timeframes and measurements. Holman Jenkins, in his second editorial defending Rick Wagoner, lamented the focus of so many observers, and probably investors, too, on share price performance. However, like it or not, that's what investors get. Whether a company is hiring more people, doing good works, etc., is, to public shareholders, really beside the point, unless those activities result in better-than-average total returns over time.

In that regard, I hardly think Ford's post-crisis share price snap-back constitutes a long term return to solid, consistently superior total return performance. What I wrote in that March post I believe still holds true,

"Thanks to global government support of various auto producers, industry over-capacity remains. Ford has to grapple with a government-owned and -subsidized competitor, GM, and a Congress and administration willing to and capable of attacking that failing auto maker's competitors, e.g., Toyota

Political expediency drives Ford to hybrids and alternative fuel sources for its cars, while end-user demand isn't necessarily there for the longer term. Nor is the economy healed, portending a potential slump in demand in the next few years.



Unless Mulally continues to pull more very sizable rabbits out of his hat at Ford, the pace of revenue growth, cost reductions, and, thus, total return performance, is likely to slow. Ford still competes in a business with too much capacity, a government-owned competitor, capital intensity and fairly volatile demand over time.


For all of the adulation given to someone like Warren Buffett
 
Perhaps demand for cars and trucks won't soften in the year ahead. But this sector is still one in which pricing power is very hard to achieve. Regardless of Mulally's great job in preparing Ford for the 2008 crisis, and managing to bring it out of that crisis in good shape, it's far from home free. It remains a firm with many competitors, a challenge to differentiate its products when much of the value-added of cars comes from vendor subsystems, and a unionized workforce.
 
I'd hardly say Ford's recent survival without resorting to Chapter 11 equates with it having turned around for good. Right now, it appears to be simply another upward move in a cycle the company has repeated for decades.

Ann Mulcahy "Turnaround Queen?"

Xerox's former CEO, Ann Mulcahy, has been a guest-host on today's CNBC morning program. As she arrived on the set, the talker at the bottom of the screen proclaimed her the "turnaround queen."

Really? I don't see it.

I didn't see it when I wrote this post last week concerning her reportedly being in the running to replace Larry Summers. In that post, I wrote,

"Mulcahy became CEO of Xerox on 1 August, 2001.

After a smartly-rising performance from 1990-1999, Xerox's share price deflated, along with that of many other technology firms, when the tech bubble burst in 2000. By 2001, the company's stock price had begun to recover, but has basically flat-lined over the period of Mulcahy's management. The S&P did roughly the same.

How does this make Mulcahy some sort of management maven? And why does anyone even bother with Xerox anymore? It's been a technology also-ran for at least a decade."

Turnaround? I'm not seeing it.

And, as I mentioned, Xerox has not been a 'high tech' firm for decades.

C'mon, in a world of iPads and such, copiers are high tech?

The co-anchors have been nearly genuflecting to Mulcahy all morning, and for what? Yes, she comes across as intelligent, poised and reserved. Probably competent at running a has-been technology firm which had fallen on very hard times. Not a rocket scientist, but not an idiot, either.

Want to see a real eye-opening graphic? How about the nearby chart comparing Xerox's and GE's stock prices since about 1975?

GE went up like a rocket until 2001, when Welch left, while Xerox was flat for a decade before rising during the 1990s, along with the US economy. But, since 2001, when both Immelt and Mulcahy became CEOs of their respective companies (within about a month of each other), Xerox has actually marginally outperformed GE. Mulcahy managed to keep Xerox flat, while Immelt destroyed value at GE.

Now, if Mulcahy is the "turnaround queen" for this performance at Xerox, what does that make Immelt's comparatively poorer performance at GE? And since NBC was sold to Comcast, will CNBC finally tell the truth about Immelt's disastrous reign at their former parent?



Dell's Non-Existent Turnaround Becomes Visible At Last

My last two posts concerning Dell, here and here, detailed my belief that, despite the founder's return in January of 2007 as CEO, the company is still doomed.

The nearby 5-year price chart of Dell, Hewlett Packard and the S&P500 Index confirms this. Dell's recent equity price rise is about the same as the index's, after having fallen much further since Michael Dell returned.

Even since early January, HP's equity price has risen, while Dell's has fallen.

Dell's recent quarterly earnings report provides more bad news. Its profit dropped 54%, while the rest of the technology sector has been on fire.

Its sales also fell, by 15%. That should be the real worrisome trend. My proprietary research has shown that growth firms are so-noted chiefly by consistent revenue growth, relative to the market. Dell is now going south.

Rival HP reported higher profits in this quarter than the year-ago period, amidst revived demand.

According to an analyst cited in the Wall Street Journal article about Dell last Friday, Dell's gross margin has dropped by half a percentage point, as prices fall while component costs rise.

Schumpeterian dynamics continue to bedevil the aging direct-purchase computer maker. Michael Dell has returned, executives have been shuffled, and Perot Systems has been bought, all to no avail.

Dell's golden age continues to recede further into the past, while the current management team burns through more money and continues to provide no compelling reason for shareholders to remain and see their equity investment underperform an inexpensive S&P index fund.

Dell's Failed "Turnaround" Confirms My Prediction

Over a year ago, I wrote this post concerning a Wall Street Journal article about CEOs returning to rehabilitate the companies they founded or led to prominence.

"In Dell's and Starbuck's cases, I question if they ever will. I believe, for reasons I've discussed in labeled posts on both CEOs and their companies, that competition, growth and simple Schumpeterian dynamics have worked to end their time of consistent outperformance."

This past Friday's Journal reported on Dell's most recent quarterly results. They bear out my prediction. Profits slid 48%, so the firm is planning even more cuts.

This is what is known as a death spiral.

Sure, Michael Dell returned. He's reshuffled executives and pushed some new products. It's not working.

As I expected over a year ago, many trends are against him and his company. Frankly, it remains somewhat surprising to me that so many observers- pundits, analysts, journalists- continue to expect some sort of resurrection of Dell.

But, as my business partner reminds me, most people are sentimental. They like a good human-interest story. They enjoy the emotions accompanying a would-be come back story. Or the failure of one.

But people continue to expect businesses to live forever.

They just don't. Some die. Others should die sooner than they are allowed.

Would not Dell's shareholders have been better off with an orderly dismantling of the firm a year ago, when more value might have been realized for them? Rather than feeding the founder's ego?

Carol Bartz Begins To Deliver At Yahoo

It has indeed been just about six weeks since veteran AutoDesk CEO & Chairman Carol Bartz took the helm at Yahoo. I wrote, in closing that post,

"In any case, Bartz is already taking charge and making it clear she'll be the one running Yahoo and doing the talking. And more than likely, her counterparts elsewhere realize the days of pushing the hapless internet company around are over."

Looking at the nearby Yahoo-sourced price chart for the company, compared with Microsoft and the S&P500 Index, you can see that Yahoo is the only one of the three that is higher now than it was in late January.

In fact, this morning on CNBC, technology reporter Jim Goldman reported that Microsoft CEO Steve Ballmer's comments on his firm's market share loss to Apple, and his desire to do some deal with Yahoo, drove his company's equity price even lower, while Yahoo rose again.

According to Goldman, the more Ballmer talks about wanting a deal with Yahoo, the lower his company's stock falls, while he gives Bartz' firm's equity price a boost.

Yesterday's Wall Street Journal had a fairly in-depth piece on Bartz' rapid moves at her new firm. She's making significant organizational changes, searching for selected new senior executives, such as a chief marketing officer.

It's very clear from the article that Yahoo's board is getting exactly what Bartz promised, and was expected to deliver. An adult with common sense and experience is now quickly moving to make the firm's moves more coherent and sensible. She's not making a knee-jerk decision on the firm's search engine and business, but she is, evidently, making fast progress on determining what she will do with it, soliciting information from both lower- and senior-managers to assist her in that effort.

This focused energy, alone, has apparently been sufficient to give Yahoo's shares a boost for the first time in recent memory, excepting when it was due to rumors of a sale of the firm.

Too bad the board was asleep for so long, first letting Terry Semel dawdle while the firm's fortunes waned, then stupidly replacing him with differently-, but equally-inept co-founder Jerry Yang.

It took a few years.....yes, years.....but at least Yahoo's board finally delivered for its battered remaining shareholders. It's probably a good bet that, whatever the longer term outcome for Yahoo, Carol Bartz will make it better for her shareholders than it was going to be before she arrived.

Dell's Failing Turnaround

Today's Wall Street Journal featured an article about the Dell 'turnaround' in the Marketplace section.

Almost a year ago, in January, I commented on a Journal piece about returning CEOs reviving their companies. I wrote about Dell,

"Why do you suppose that these CEOs, as a group, mostly failed to move their firms to consistently superior total return performance?

In Dell's and Starbuck's cases, I question if they ever will. I believe, for reasons I've discussed in labeled posts on both CEOs and their companies, that competition, growth and simple Schumpeterian dynamics have worked to end their time of consistent outperformance."

It won't matter what sort of shuffling of deck chairs on his personal Titanic that Michael Dell does now. He can change executives, shuffle one to another post, but it won't change the business. Or customer behavior.

As this nearby, one-year price chart for Dell and the S&P500 Index clearly demonstrates, the company still struggles relative to the market.

Dell is down for the count. Nothing Michael Dell does is going to change this Schumpeterian fact.

Michael Dell Seals His Company's Fate

Yesterday's Wall Street Journal contained an article discussing Michael Dell's efforts to cut $3B from his company's expenses.

From my proprietary research on company performance, Dell has now entered a pattern that will leave it very little chance of outperforming the S&P in the foreseeable future.

The nearby, Yahoo-sourced chart displays Dell's last five years' performance, along with that of the S&P500 Index. The company hasn't outperformed the index for several years, and has underperformed significantly over the period.

My research indicates that companies which attempt to turn around from a formerly-successful, high-growth strategy have little chance of success.

Furthermore, the total return performance premium over the index shrinks dramatically from what it was in the company's better days. The result is a very minimal expected return premium from a shrinkage of the firm, followed by an attempt at a return to growth from its 'right-sized' base.

The second chart illustrates Dell's price performance since the late 1980s. It obviously roared past the S&P in its prime, but has flattened since the dot com crash of 2000. In effect, this decade has been a 'lost' one for the company.

At this late date, Michael Dell's attempts to cut his way back to superior performance is basically wrong-headed.

Sometimes, companies are just outdated, with business models which no longer merit investment.

Michael Dell would do himself and his shareholders a favor by declaring the end of the era in which his model excelled. Next, he should merge Dell with another retail tech product provider, or close it, and spare his shareholders further needless loss of their remaining capital.

On Pandit's New Plan at Citigroup

This past weekend's Wall Street Journal edition was full of information regarding Citigroup's CEO, Vikram Pandit, insistence that it will take years to fix the bank.


Sadly affirming the financial supermarket strategy first pioneered by James Robinson at American Express, then lifted by his capital markets hire, Sandy Weill, and ported to Travelers/Citibank, Pandit plans to take several years to get the overly-diverse financial conglomerate on the move in terms of shareholder returns.


Maybe Pandit's drinking whatever his chairman, Bob Rubin's been having, because it takes a lot of chutzpah for a CEO to tell shareholders,


"This will take time."

Apparently, rather than split the sprawling, hapless banking giant into reasonable pieces, such as institutional, consumer, and asset management, in its simplest description, Pandit intends to

"finally merge it all,"

to allegedly finish what Sandy Weill started back in 1998.

Do you know of any other sector in which the rationale for such a major merger is even still valid ten years later, without any changes?

It seems to me that Pandit is demanding, even challenging, his shareholders to stay put and wait a few years to see whether, untested as he is, the former finance professor can actually bring about profitable growth and consistently superior shareholder value at the financial utility.

If it were true that the bank were capable of being fixed to run, as is, intact, yielding consistently superior returns, but it would take some years, then I guess that's one alternative. But in the interim, shouldn't Pandit forgo any significant compensation, since he isn't planning on enriching his shareholders during the time period?

I'm thinking that he would be stripped of all deferred compensation, paid about $350K/year in cash, and, beginning in the year he forecasts improved, superior total returns, deferred stock grants could be paid to him.

If I were a shareholder, though, and heard Pandit's promise of years before a recovery of the bank, I'd just sell my shares and wait for some consistently superior total returns before plunging back in.

Heck, that's what my selection approach does anyway. I don't invest in 'turnarounds.' I only bet on superior operating businesses.

As I noted in this post, regarding GE, if shareholders dumped Citigroup stock now in droves, the price would plunge, actually making it easier for Pandit to earn superior returns in the near future. Provided he actually delivered the promised operating improvements.

Still, it's a pretty galling thing for Citigroup's shareholders to be told to just sit tight, as they have for, what, seven years? And maybe...maybe...this untried CEO will suddenly deliver some better returns than these poor souls could have been getting for the past seven years simply by selling Citi and buying the S&P500 Index.

Ford's 18 Months Under Mulally: Is This a Turnaround?

I first wrote about Alan Mulally's involvement with Ford, the company of which he became CEO in September, 2006, in posts here and here, in December of 2006 and July of last year.

Now, this morning's Wall Street Journal heralds Ford as its "..Recovery Advances; Earnings Improve."

But, turnaround?

According to the nearby Yahoo-sourced two-year price chart of Ford and the S&P500 Index, they were at about the same place when Mulally took over, on a percentage basis, from May of 2006. Now, the index is positive, with maybe a +5% return, while Ford is still negative, with what looks to be a return between -5% and -10%.

Granted, Ford has rebounded smartly from a -30% return only weeks ago, ending a precipitous slide begun last fall.

But, as I have asked in prior posts about 'turnarounds' at other firms, what will constitute a successful turnaround?

To me, net income performance, impressive as it has improved under Mulally, is not alone sufficient.

The pattern and magnitude of a firm's fundamental operating results create investor perceptions that underpin a firm's attainment of consistently superior returns for its shareholders.

Unless Ford is planning on really strong, consistent double-digit revenue growth in the years ahead, it's going to have to achieve any consistent total return performance mostly by productivity improvements.

It's clear that the Journal likes Mr. Mulally very much. All three articles about him provide unfailingly upbeat, flattering profiles. And my guess is they are not wrong.

Even this piece's details about Mulally's pushing to sell Jaguar and Land Rover, redesign the Ford Focus, and attack inventory problems all ring with the sense of a really good manager at work.

Still, call me sceptical. It's not just that Mulally must haul Ford back from the brink of bankruptcy or sale. He must, in my opinion, then lead the company to several years of unexpectedly good performance, either with new revenue and volume growth, or incredible productivity gains, in order to provide the basis for consistently superior total returns for shareholders.

Can Mulally accomplish this? Who knows? I'm a 'show me' kind of investor, and Ford has years to go before it can possibly, in my view, be accorded the title of a 'successful turnaround,' or 'recovery.'

Michael Dell's Return as CEO

I would be remiss if I did not remark on this past week's news concerning Michael Dell.

Dell fired Kevin Rollins, Michael Dell's replacement as CEO, and announced the return of its namesake founder.

Of course, the business media was awash in stories concerning whether Michael Dell is the right CEO for Dell, whether he can turn the company around, etc.

Frequent readers of this blog will not be surprised by my own opinion on this matter. In the many prior posts I have written (search on the word "Dell" to see some of them) about this company, I have expressed my belief that the firm's business model's best days are behind it.

Today's Wall Street Journal carries a piece in the Marketplace section, on page B4, by Joann Lublin & Erin White. Under the "Theory&Practice" column, they discuss Dell's return from the perspective of other founders returning to rescue their floundering companies.

Frankly, I find the piece to be of no value. Whether a lot of founders are returning to their companies or not, the high-profile cases are very few in number, and, thus, statistically meaningless.

My own opinion is that it's better to look at the type of product or service involved, rather than the class of phenomenon, i.e., "returning founders and their successes."

Consider, for example, Ted Waitt, of Gateway, Mark Eppley, of LapLink, and Charles Schwab, of the company that bears his name.

Waitt's company shares the same product space with Michael Dell's, and has had a similar fate. Perhaps more cataclysmic, and earlier, due to the differing sales models, but, still, it's clear the era of expensive, custom-build PCs delivering consistently superior total returns is behind us. In their prime, I owned both Gateway and Dell in my portfolio, so successful was each. But that was more than seven years ago now.

Eppley's product has been eclipsed by technology. Period. Who would even bother with a dedicated PC-to-PC cabled product anymore? I'm no expert, and even I plumped for a wireless network in my home last year. So Laplink's bankruptcy filing, as of 2003, did not surprise me.

Schwab's case is different, due to its being in the discount brokerage space. It was firmly glued to the rise, and subsequent fall, of market-bubble day-trading volumes by retail "investors" in the late '90s. True, Schwab has apparently refocused his firm on discount trading. However, as a customer, I have been the target of unwanted 'wealth management' advice which, honestly, I do not find credible, coming from Schwab. Looking at a price chart for Schwab and the S&P500, I can't help noticing that, once again, Schwab's total return performance is tied to market volumes and bull markets. Maybe "Chuck" has turned the firm around, secularly, maybe not. I don't think one could tell in the midst of this rising market.

But, back to Michael Dell. As wonderful and focused as his points were, in the leaked memo which was described in today's Journal, I don't think he'll make much of a difference in terms of returning his firm to consistently superior total returns.

Consider this. If it only takes one person to fix Dell, then how stable is the whole firm? How attractive and reliable should investors consider a firm which rises or falls on just one person, the CEO. And only the founder as CEO?

If, on the other hand, the fault lies with the markets and the business model, and not just the CEO, then what magic does Michael Dell possess that Kevin Rollins did not? Is it just personal magnetism, and pride in the company name? I think Michael Dell is a gifted and effective business leader. He absolutely earned his sizable fortune through smart business management and hard work. He may restore profit margins for Dell, and maybe some revenue growth, as well. However, the salad days of the product/market are simply gone.

As I wrote in this September 4th post last year, after shopping for a new laptop for my daughters, Dell simply missed the changes in consumer behavior with respect to requiring customization, hand-holding, and resisting instant gratification in the form of leaving a store with a PC or laptop that day.

So, while I personally wish Michael Dell success in his attempt to fix what's wrong with his company, I doubt his chances, and I don't think that, even if he enjoys some success, it will do much for long term consistent superior total returns for his shareholders.