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Dear Mr. Berko:

Dear G.R.:

I’ve been to a two-hour Investools workshop, too, but I was impressed that it took two hours to explain what could have been discussed in 10 minutes.

In my opinion, that workshop is basically a hoopla of persiflage and palaver. If you fall for that slick sales pitch and squander $3,500 for the course material, you probably have an unfortunate ratio of brain matter to skull cavity. Every once in a while some fool will make a few bucks using this or a similar program, but even a blind hog can find an acorn once in a while.

I get hundreds of letters each year from readers who got suckered into similar stock market programs, many of whom used borrowed money and were told they could repay their loans with significant trading profits. The full-page newspaper advertisements promoting an automatic, foolproof and simple system to make money in the stock market are pure drivel and tommyrot and are grossly misleading. It’s aimed at simpleminded, gullible investors; suckers with room-temperature IQs who don’t know the difference between a blue chip and a buffalo chip.

Common sense should compel you to ask: “if this Investools thing is all they say it’s cracked up to be, why doesn’t my broker use it?” And why don’t Bill Danoff, who manages Fidelity’s Contra Fund, or Donald Kilbride of Vanguard’s Dividend Growth Fund or Raymond Mills, who runs T. Rowe Price’s International Growth & Income Fund, use Investools? Frankly, I don’t know a single fund manager at Seligman, Franklin, Dodge & Cox or Merrill who uses Investools.

I hope I’m getting through to you, and I pray you haven’t taken the $3,500 plunge because you’re going to be a darn disappointed dude if you do! However, as the saying goes: “A sucker is born every minute, and a stock market program guru is born every hour to make sure no sucker is spared.”

Last year Dell Inc. (DELL-$20.80) sold $60 billion worth of laptops, PCs, peripherals, servers, mobility products, software, networking products plus other similar stuff and employed 83,000 people to do so. Its revenue growth has been phenomenal, increasing sixfold in the last dozen years. But its stock has been a lead weight in every growth portfolio since 2000. Net profit margins are declining, return on equity and return on capital have collapsed, competition has dulled Dell’s competitiveness and lousy customer support (long, long, long wait times to talk to a help desk in India or North Korea) has encouraged the purchase of competitive brands.

Dell is so huge that it has more moving parts than a herd of centipedes. Dell has become so bureaucratically moribund that it is unable to respond in timely fashion to changes in the marketplace, product design, price flexibility, marketing and customer service needs.

Dell made an excellent computer, and management took pride in being a consumer-conscious and responsive company. Dell still makes an excellent product, but the company has grown so cumbersome and creatively stagnant that management has lost touch with the consumer. Dell needs a Steve Jobs kind of guy who can create product excitement and esprit de corps and paint the company with charisma.

Oh, Dell has made some changes, but it’s basically old wine in a new bottle. Consumers fume when forced to wait 20 to 70 minutes to reach a help desk — but management chose to reduce its work force and improve profit margins.

Dell’s revenue growth will probably scooch forward in the low single-digit range, and Dell’s profit growth will be singularly unimpressive. Though Dell’s machines and products have excellent features, they are no better than the laptops, PCs, etc. made by Lenovo, Hewlett-Packard and Acer or the many ancillary products of these other manufacturers. Dell has lost its panache, its flair, its razzle-dazzle and now just makes boxes with funny little things inside that gurgle, glow and go “zip-zip” or “ding-dong” when in use.

Hewlett-Packard Co. (HPQ-$48.26), on the other hand, was $20 a share in late 2004 when its laptop sales began to gather momentum, and its shares moved to the low $50s before the market began to sell off. That’s got to tell you something … sell Dell! Management is tired and “sphinx!”

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.© Copley News Service