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An irreputable mechanic failed refill my transmission with transmission fluid following a service on my old 325i. I ran it dry for some period of time before I got a warning light when I put the transmission into manual mode. After taking the car into the dealer he found that the plug was never put back in after the initial service, there were a small amount of metal shavings at the bottom of the crankcase but all-in-all, we refilled the transmission and my son still drives that car (with orginal engine and drive train) to this day. Needless to say BMW makes one of the finest engineered transmissions in a stock coupe today.
agreed...this is a business that has proven not to be in our bailiwick
re: Eric Kim (marketing genius from Samsung etc)...Intel originally hired Mr. Kim from Samsung to head up SMG. Not long after, he left sales and marketing to take the head post for Digital Home. I have never understood all the hoopla surrounding Eric Kim. I thought he was supposed to turnaround the Intel advertising and marketing machine (away from the blue man group et. al.), but never really saw any inflection point there. And then he leaves SMG for DH which seems to be another area in need of a facelift. Just don't see that his aquisition has resulted in that much.
doc...<I see nothing wrong with Intel branded high margin notebooks or MID's.>
The only 'wrong' thing about them is that Intel already decided to get out of the system developement business some years ago. I remember walking thru HF in Oregon years ago and seeing dozens and dozens of large carts stacked with desktop systems that were being manufactured by Intel and sold directly to value added resellers. Eventually they decided that issues with customer service, returns and support etc. were not worth the trouble that this business entails. I'm just wondering if they are re-thinking this or not.
re: Intel Notebook...it's not clear to me if this represents a new notebook that Intel will manufacture and market or whether this is just a 'look what can be done' kind of project to inspire the OEMs. Years ago Intel decided to get out of the systems business and this would represent a departure from that decision if they were to re-enter the manufacture and sales of these notebooks. But maybe they have decided that the OEMs (sans Apple) are not designing and producing the next generation notebooks fast enough. Thoughts?
This rally will indeed fizzle IMO, but that would be different from a 'bloodbath'. I consider the first two weeks of Jan a 'bloodbath' and I don't see that happening until some significant tangible inflation data rears its ugly head (not just energy and gold).
So I read your edit and while I appreciate your optimism (I really do), I have spent too many years waiting for the world to see the value in INTC (like many on this board). During the last two months I have finally changed my long term outlook on Intel. For a number of reasons I no longer think that the stock will ever really break out of a fairly narrow trading range. My reasons for this are:
0) the company owns such a large market share that it will always be a proxy for the economy
1) the stock is just too widely held and the nuiances of its earnings are scrutinized too closely by the street
2) there is more money to be made by the 'big money' in manipulating and spinning the information to trade the stock than there is in buying and holding the stock for a long term stock price move
3) the new market initiatives (MIDs, WiMAX, DH) even if modestly successful don't seem like they will change the way INTC is evaluated by the analysts. That is, as a microprocessor company struggling to hold on to its huge market share and unable to raise margins much without losing some.
The last point is really the only area where my long term view could be changed. If a significant new market (that no one anticpates) emerges from MIDs or WiMax then that would be the wild card (for me anyway). If Intel succeeds in just continuing to make 10 billion a year on microprocessor sales (an incredible feat I might add) then I am still on my way out of this stock.
But if your low range is $2 higher that would be $22 at the low end which is ignoring the realities of the market that currently sees the value of the stock at around $20 and change.
With full year EPS estimated at 1.29...my model indicates that INTC should trade between $20 and $26 for Y08 with a fair market value of approx $23/share (18 times $1.29). I will begin to liquidate my position in INTC at prices above $23/share this year. If the stock price approaches $27 this year or next I hope to own 0 shares of INTC.
SaturnV...a great book on this subject is 'Extraordinary Popular Delusions and the Madness of Crowds' by Charles Mackay. A must read for those seeking to understand market pyschologies. Although I have read it and it didn't stop me from saying 'bahhhhhh' and following the rest of the sheep. I guess understanding market pyschology and resisting it are two different things.
Sarmad I think you're relying too much on the company fundamentals versus pure technical trading. Once the stock broke down so severely after the initial downgrades the stock become 'broken' (the stock not the company). Perhaps a 'home run' earnings report could have saved it but not getting that allowed the report to spun negatively which just empowered the big money technical traders to say 'take it down!'. I don't think there is anyone (institutions) out there that really feel too much differently about the fundamentals of the company (i.e. thinking that Intel will underperform the economy or AMD etc). Instead I think we are currently at the mercy of the technicians who want to take the stock back to multi year lows ($16-17) before biding their time before using some new piece of information to leverage a reversal of the process. Only time will tell how long that takes but I am estimating 6 months minimum (but would love to be proven wrong).
It is indeed if the collusion is written anywhere, but it's all collusion by 'following the action of the one making the play', as long as he is big enough to start the momentum. Obviously very few fall in that category. If a tree falls in the woods and nobody hears it did it really make a noise (or something like that).
Stock price manipulation based on information spinning by the big money firms on wall street is just 'business as usual' for those guys. Just like the unspoken agreement that there will be no major market sell off over the Christmas holiday season (last two weeks of the year). The wall street folks all want to be in the Hamptons or Bermuda and they have all agreed to never sell off the market during those weeks. Hmmm do I sound cynical? I better stop now.
I think the drop in INTC price means a large holder is convinced Intel will fall on hard times....
I disagree on this one. It would actually renew my confidence in the market if this were truly the case. In other words it is perfectly 'fair' that some large holder of the stock makes a move based on what they believe about the fundamentals of the company (just like we all do). And if that belief moves the stock lower then they are right and I am wrong at least in the short run. After all the 'perception' of the future earnings of a company are a huge part of what makes up the stock price.
But what I think happens (and this deflates my confidence in the market) is that ALL of the big money wall street firms (and the institutions which must follow their lead, so kind of a collusion of sorts) are capitalizing on their ability to manipulate the information to cast a negative sentiment across the market and INTC in particular knowing full well that the fundamentals for INTC are in place such that they can easily turn the information around to create a growth story some time in the future (at their descretion). Of course as they manipulate the information they are also selling the stock to drive down the price as much as possible only to wait for some moment in the future when they deem that 'things appear to be turning around'.
So our task becomes less about trying to predict where the company is going and more about trying to predict how and when the information will be manipulated by the big money firms. And I have no idea how to do that. I'm beginning to think the best thing to do is to sell shares at random time points through the years and just take what you get at that time (kind of like how the Intel executives do it).
yep, I get that now thanks...now what about mas' argument that Intel would do stockholders a better turn by retaining the cash rather than using it for share buybacks?
Share buybacks and paying dividends both reduce stockholder equity since they both reduce the cash on hand on the balance sheet correct? Yet both actions also make the stock more valuable in the marketplace (by both reducing supply and by paying a higher yield). Since I seldom hear about analysts or traders referring to the value of shareholder equity for a company, it would seem that actions taken to make the stock more valuable in the marketplace are more important (i.e. buybacks and dividends). Why does mas think otherwise, or is this just another 'masism' with no basis in fact like the pricing policy?
Sarmad...can you explain further this concept of stockholder equity increasing? It seems to me that if 30% of market capitalization (i.e. stock price tanking) is wiped off the books that total stockholder equity must be decreasing.
It is clear that macro economic issues are at work here as INTC approaches its multi year low of $16. That low was set when the company was in perhaps its worst competitive situation. Now that the company is in its BEST competitive situation it again looks like it will test that multi year low. Its just a shame that we waited quarter after quarter for our competive advantage to show up in the earnings call always just one quarter away from starting to see the fruits of the companies labors only to be slammed by the macro econonmic fears. I saw it coming but just hoped that the good Intel news could get out before the macro issues took us down. But alas that was a mistake. I will have to disagree with Steven King in Shawshank Redemtion that 'hope is NOT a wonderful thing and certainly not the BEST of things' at least when dealing with stocks.
re: there are ~37 morons out there somewhere
I believe the org charts show hector's staff at 37.
This idea that the analysts got it right or wrong is not really accurate. The analysts take the quarterly report and listen to the conference call then go back and plug the information (and any nuisances that they read from the call) into their own models and eventually arrive at some conclusion usually some weeks after the report. It is in this time frame that the upgrades and downgrades (if there are any) may come out. The idea that the second the report hits INTC.com, the analysts tell their management to sell or buy is just not accurate. Now of course we always see buying and selling (in this case selling) when the report is made public but this is due to the conclusions that the institutional and retail traders come to without the benefit of the stock analyst's number crunching. Does this mean that the conclusions the traders came to after seeing the report for 5 seconds was right or wrong? Not sure only time will tell. Once we start seeing upgrades and/or downgrades in the coming weeks, then we can start talking about how the analysts are seeing things.
yep, we were all wrong on this board. The quarter must have really tanked in the last half of december. I sold a large part of my position at 22.50 and then kicked myself for not believing the competitive story and at least waiting for the earnings, so I bought it all back at 22.26. Feeling like a fool now.
MacWorld - near 'realtime' info
http://live.gizmodo.com/
on TV the operating room doctors are always listening to their favorite music while operating...you could be the first to have the Intel conference call piped in! I'm sure the gal would love to hear Andy Bryant explain Q4 gross margins as she's making the final push.
nice post chipguy, could PSO be right? Read my lips: 'No global recession!'
The trouble with Penryn and its siblings is that they need a new platform. Thats the trouble when each new Intel CPU requires a new chipset to work
Intel maintains a close relationship with it's customers to assure that they are well informed on the cadence for new platforms in the pipeline. And while customers must still do their own validation on new platforms, Intel has already performed extensive hardware validation on all platforms in their own labs as well as driver validation on all platforms as part of the WHQL process. This is why customers like working with Intel platforms, when the chipsets ship to customers they have already been rigoursly validated are virtually ready to go. Now is the process full proof? Is it possible for any bugs to appear during customer validaton? Of course, but no QA activity is perfect but customers appreciate the level of validation that goes on before they receive products and the proof is in the attach rate for Intel chipsets.
oh SHUT UP ;) ;)
LOL
Believe me, it's a hollow victory after losing so much value in long position in INTC!
Sold my AMD puts for a 207% return
PUT (LEAP 2009) (VVVADVANCED MICRO JAN 7 1/2
bought for 1.01 sold for 3.10
My only regret: I wish I'd bought more.
so where does AMD stock price go from here?
At 5.50/share is there much more downside that will be realized even when the expected losses are announced?
And what is the significance of the 7.50 book value that is listed in Yahoo finance key statistics for AMD? Does the book value create any kind of floor for the stock (apparently not)?
saw a few trades going by on INTC the ticker that looked like someone buying INTC after hours, but alas it was only one of those after hours trading anomalies that you see sometimes. I saw it a few times which made me think something was happening but now I think not.
nevermind
Koog...tax accountant would only say:
Yes this is true. Your data has already been carried forward from previous years. You have $87,112 of AMT Credit that has been carried forward. Your benefit will be calculated with your return.
Guess I will have to wait for my return to find out if I qualify.
The problem with a sell off like this one today, is that this sets up tomorrow for the big money to look for more capitulation from the current holders of INTC. They will initiate another 'search and destroy' mission to take out all the stop losses they can reach to drive as many as possible out of the stock.
I agree that various sound bites like that will cause trading blips to occur. But I also think that there remains a selling bias toward INTC that will not will not allow the stock to move up anytime soon. The best I am hoping for is a 'home run' in the CC that could bring the price back to FMV. But even that is in doubt. I think it is more likele to see $20 before $25 IMO. I hope I am wrong.
LOL...well I did the first part, took a redeployment package in Dec'07. Now about that real estate job...hmmmm...think I'll wait a bit.
Nope...the big money will continue to dump shares as they follow their technical trading models. I expect INTC to finish at it's low for the day and I expect it to take out my stop losses by EOD Friday.
Guys...I too have about $95,000 in AMT tax credits that I have had on the books for years probably since 98 and 99 when I excercised NQ options, paid the taxes on the paper gain and got stock with the stock after the bottom fell out.
Uncle Sam has held these taxes paid on an paper (invisible) profit years, and I would love to get this back. I have emailed my tax accountant to find out more. Just my luck though, I will probably be over some income limit that is allowed to take back the credit (as I have in previous years). The ability to take back the AMT tax credit has always been there, it's just that it was virtually impossible to qualify for (for any two high tech working married couple). I am hoping something has changed in the tax code (as jacmierz suggests) that will change this.
That guidance would definately be the 'home run' I was referring to (and hoping for). Although I would add that we also need to hear an EPS of .41 in Q4'07.
A good price to add shares IMO. I also agree with your time horizon, the stock is currently broken (not the company) and I don't expect much upside movement until 2H'08. At best I am hoping the price moves toward $24-25 (FMV by my computation) and that will only happen if the Q1 CC is a 'home run'.
1 share AMD = 1 hamburger?
Will you be availabe to buy a share of AMD for $5 and change tomorrow?
Citi and Wachovia See Solid Growth for Intel in 2008 Despite Weak Economy
http://biz.yahoo.com/ap/080107/intel_analyst.html?.v=1
wbmw, are you there at CES? If so what is the pulse like wrt to Intel? While this is a consumer electronics show is there any buzz surrounding the recent dropoff in the Intel stock price?
My trading range estimate for Q1'08 is $22 to $28 with a FMV of $25/share (based on 2 trailing quarters and 2 future quarters earnings times 20 PE).