Professor Elam

Monday Oct 12 2015

Dell is buying EMC for $67 billion. No doubt negotiations started  months ago when the Dow was at an all time high. Mergers are inclusionary and reflect optimism on the part of both parties. That is why mergers  and acquisitions happen at market highs.  Mergers at market lows are more like shotgun weddings, a marriage of necessity. That would describe Halliburton swallowing Baker Huges as the energy service business plunged. HAL was simply buying Baker's customers with the idea of laying off the Baker employees. 

But back to Dell and EMC. It is fitting the announcement comes today as we have opined a high is due right here from the rally off the August 24 low. In addition, in a ringing retro echo of the 1960s, Dell wants to be the IBM for the corporate world. In the 1960s bull market IBM was the one blue chip to have. 

So we have a socionomic moment both from the inclusionary mood and historic retro-embrace of a past success of another fallen icon.