Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
When will Intel hit $75 price again?
by
COMMON SENSE
IMHO - a bit touchy on what you read?
not my ideas - it's his ideas
I don't necesarily agree with them
and if you don't want balance in your thoughts - go to a safer place
CS
Now's the tough part
Intel blew past estimates, but its real challenge is about to start.
October 15, 2003: 1:39 PM EDT
By Justin Lahart, CNN/Money Senior Writer
NEW YORK (CNN/Money) - You get the feeling that even Intel executives were surprised by the strength of their company's third quarter earnings report.
Earnings topped expectations easily, sales were at the top end of guidance and the company's profit margin exploded. For Intel bears -- and there are still plenty of them out there -- Tuesday was a sleepless night.
Wall Street analysts, of course, are falling all over themselves extolling what a great quarter Intel had and busily upping their estimates for subsequent periods. But they should be careful, and investors should be too. The real challenge for Intel starts now.
In the third quarter, Intel benefited from an incredible set of positives that is unlikely to repeat itself. First off, the economy grew at a stunning rate -- probably better than 6 percent, maybe as quick as 7 percent. It's the fastest growth we've seen since the fourth quarter of 1999, and it simply isn't sustainable. As the effects of this year's tax cuts and refinancing activity ease up, the economy is likely to decelerate. That's not a bad thing -- the slower clip will still be plenty healthy -- but it's not going to be the sort of environment where sales in general ramp up like they did in the third quarter.
While all this heightened economic activity was going on, U.S. companies were in the midst of a big, long-delayed PC replacement cycle. With a little extra cash sloshing around, the computers that were sitting on desks since before Y2K -- you know, the ones with the sticky keys and the flickering screens -- finally got replaced. Buying a raft of new computers was a good way to up production, and far less expensive than hiring back all the workers you let go.
But now the replacement cycle has likely come to an end, and, with hope, companies are going to start hiring again. That isn't bad for Intel. The new workers are going to need new computers, after all. But the coming months don't seem as absolutely terrific as the quarter Intel just saw. In short, we may be about to see how fast Intel can grow in a much more mature tech environment than what prevailed in the 1990s. Tech bulls hope that its secular growth rate is still quite fast, because if it isn't, Intel's still-steep valuation will be hard to justify.
Samsung sees 2004 memory chip sales up a fifth
By Kim Miyoung, Reuters
SEOUL — Samsung Electronics said on Friday it aimed to lift memory chip sales by a fifth to $10 billion next year by focusing on output of flash memory used in cell phones and digital cameras.
The world's top memory chip maker is investing $2.87 billion this year to boost semiconductor output as it bets the battered technology sector will recover from its worst-ever slump in 2001.
"We see flash memory chips as a new growth driver and will further boost flash output to compensate for declining profitability of other memory chips such as DRAM," the South Korean company said in a statement.
Prices of flash chips have remained relatively stable compared with DRAM (dynamic random access memory) chips, as they are used in a wider range of electronics products. DRAM, the most common type of memory chip, tends to be confined to use in computers.
"It's a positive move given flash memory only takes up some 30% of Samsung's total memory chip sales," said Song Myong-sup, an analyst at Meritz Securities.
"But Samsung may not be able to reach that target should prices of flash memory chips go under pressure due to heavy increase in supply in the absence of strong demand for digital products."
Samsung said it would aim for a share of more than 21% of the world memory chip market, which it estimated would be worth $47 billion in 2004.
The firm declined to give an estimate of this year's memory chip sales, which accounted for 20% of its second-quarter sales revenue, but said it expected 2003 memory chip sales and profits to increase more than 20% from a year ago. Memory chip sales were 8.074 trillion won ($7.039 billion) in 2002.
Driven by the upbeat outlook and hopes for solid third-quarter earnings, Samsung shares jumped 3.85% to 445,000 won as investors scooped up more of what is already Asia's most valuable technology stock, with a market value of $61 billion.
Flash war
Flash chips are popular in digital cameras because they store and erase information quickly and do not require power to retain their data.
Samsung, the world's top maker of NAND-type flash memory chips with a 65% market share, expects the global flash chip market to also grow 20% to $12.6 billion next year.
Samsung produces the chips under a licensing agreement with Toshiba Corp, which invented NAND technology in 1987 as a possible replacement for hard disk drives.
The two companies control 95% of the $2.28 billion global NAND flash market, which has been an engine of growth in an industry still recovering from its slump in 2001.
Europe's top chip maker, STMicroelectronics, is trying to crash the party by teaming up with South Korea's Hynix Semiconductor Inc to develop and market NAND before the end of 2003.
Samsung said it expected the NAND flash market to grow 88% annually until 2007 and to boost its portion of the overall flash market to 66% in 2005 from 28% this year.
NAND competes with a different flash technology called NOR, which is dominated by Intel Corp and Advanced Micro Devices Inc, and is widely used in mobile phones and handheld computers.
Analysts expect NAND to overtake NOR in a few years because it is cheaper to produce per byte and can store more data. The two technologies take their names from the type of logic circuits they use to store data.
(Exchange rates for amounts in this story: $1=1,148.6 won)
AMD Unveils Athlon 64, Seen as Head Start Vs Intel
2 hours, 22 minutes ago Add Technology - Reuters to My Yahoo!
By Elinor Mills Abreu
SAN FRANCISCO (Reuters) - Advanced Micro Devices Inc. said it will launch its new Athlon 64 processor on Tuesday, a move analyst say will give the chipmaker a head start against its larger rival, Intel Corp., in the race to bring cutting-edge data processing to personal computers.
The new chip, which will be marketed first to hard-core gamers and scientists and engineers, is seen over the longer term as vital to the future of AMD, which has posted losses for eight straight quarters and has built its reputation as a lower-cost alternative to Intel.
"They're relying on it to generate additional revenue and eventually drive them to profitability," said Kevin Krewell, a senior analyst at the Microprocessor Report.
Currently, most desktop computers have processors and applications written to crunch 32 bits of data at a time, while servers -- including those based on Intel's Itanium and AMD's Opteron processors -- handle 64 bits at once.
That faster data handling is particularly helpful when doing more computing-intensive tasks, like using databases, rendering digital animation or performing scientific simulations.
The Athlon 64 not only runs existing 32-bit applications extremely well, according to analysts, but it will be able to run 64-bit PC applications when those become available.
"The pervasive adoption of 64-bit computers is not a question of if, but when," AMD Chief Executive Hector Ruiz said at the TECHXNY conference in New York last week.
Intel, meanwhile, has not stated its plans for offering a 64-bit PC processor and is downplaying the need for the technology.
"The production operating systems are not there yet" for 64-bit PCs, Intel President Paul Otellini said last week in an interview at the Intel Developer Forum. "The mainstream applications won't exist until next year."
Standard consumer PCs will not be configured with enough memory for 64-bit computing for a few more years, said Nathan Brookwood, principal analyst at research firm and consultancy Insight 64. However, engineers and scientists who are pushing the limits of the technology now will be early adopters, he said.
CINEMATIC REALISM
AMD said another market needs the power boost now -- gamers. Chips offering 64-bit capability will greatly increase the realism for PC games, AMD said.
"When you go into a movie theater, the experience is radically different from a PC," said Rich Heye, general manager and vice president of AMD's microprocessor business unit. "If you want to get that experience on your PC you are just going to have to go to a 64-bit architecture."
With the launch, "AMD is on top of the mountain and we're dropping a snowball down the hill," he added.
In a pre-emptive strike, Intel said last week it has developed a new processor with extra memory, called Pentium 4 Extreme Edition, that is targeted at gamers and will be available in a month or two.
But AMD still has the upper-hand since Microsoft has said it will deliver a version of Windows to run on AMD's 64-bit processor. Intel will either have to adopt AMD's architecture or develop their own and convince Microsoft to enable Windows to work on its 64-bit PC chip as well, analysts said.
"The key thing here is AMD has staked a claim for architecture for 64-bit desktops ahead of Intel and it will put pressure on Intel when the company plans to move to 64-bit" on PCs, Krewell said.
"AMD will have a wide open playing field to sell into, won't have to even think of competing on price in lieu of its benchmark superiority and should handily turn profitable -- and then some," Rick Whittington, an analyst at research firm AmTech Research, wrote in a note. (Additional reporting by Franklin Paul in New York)
AMD Unveils Athlon 64, Seen as Head Start Vs Intel
2 hours, 22 minutes ago Add Technology - Reuters to My Yahoo!
By Elinor Mills Abreu
SAN FRANCISCO (Reuters) - Advanced Micro Devices Inc. said it will launch its new Athlon 64 processor on Tuesday, a move analyst say will give the chipmaker a head start against its larger rival, Intel Corp., in the race to bring cutting-edge data processing to personal computers.
The new chip, which will be marketed first to hard-core gamers and scientists and engineers, is seen over the longer term as vital to the future of AMD, which has posted losses for eight straight quarters and has built its reputation as a lower-cost alternative to Intel.
"They're relying on it to generate additional revenue and eventually drive them to profitability," said Kevin Krewell, a senior analyst at the Microprocessor Report.
Currently, most desktop computers have processors and applications written to crunch 32 bits of data at a time, while servers -- including those based on Intel's Itanium and AMD's Opteron processors -- handle 64 bits at once.
That faster data handling is particularly helpful when doing more computing-intensive tasks, like using databases, rendering digital animation or performing scientific simulations.
The Athlon 64 not only runs existing 32-bit applications extremely well, according to analysts, but it will be able to run 64-bit PC applications when those become available.
"The pervasive adoption of 64-bit computers is not a question of if, but when," AMD Chief Executive Hector Ruiz said at the TECHXNY conference in New York last week.
Intel, meanwhile, has not stated its plans for offering a 64-bit PC processor and is downplaying the need for the technology.
"The production operating systems are not there yet" for 64-bit PCs, Intel President Paul Otellini said last week in an interview at the Intel Developer Forum. "The mainstream applications won't exist until next year."
Standard consumer PCs will not be configured with enough memory for 64-bit computing for a few more years, said Nathan Brookwood, principal analyst at research firm and consultancy Insight 64. However, engineers and scientists who are pushing the limits of the technology now will be early adopters, he said.
CINEMATIC REALISM
AMD said another market needs the power boost now -- gamers. Chips offering 64-bit capability will greatly increase the realism for PC games, AMD said.
"When you go into a movie theater, the experience is radically different from a PC," said Rich Heye, general manager and vice president of AMD's microprocessor business unit. "If you want to get that experience on your PC you are just going to have to go to a 64-bit architecture."
With the launch, "AMD is on top of the mountain and we're dropping a snowball down the hill," he added.
In a pre-emptive strike, Intel said last week it has developed a new processor with extra memory, called Pentium 4 Extreme Edition, that is targeted at gamers and will be available in a month or two.
But AMD still has the upper-hand since Microsoft has said it will deliver a version of Windows to run on AMD's 64-bit processor. Intel will either have to adopt AMD's architecture or develop their own and convince Microsoft to enable Windows to work on its 64-bit PC chip as well, analysts said.
"The key thing here is AMD has staked a claim for architecture for 64-bit desktops ahead of Intel and it will put pressure on Intel when the company plans to move to 64-bit" on PCs, Krewell said.
"AMD will have a wide open playing field to sell into, won't have to even think of competing on price in lieu of its benchmark superiority and should handily turn profitable -- and then some," Rick Whittington, an analyst at research firm AmTech Research, wrote in a note. (Additional reporting by Franklin Paul in New York)
On July 13, 2000 INTC hit $146.18
and this was the tops at $73.09 (adjusted for split).
It never got that high again.
That was also the gist of what I was saying.
I was in New Orleans that summer when this happened so I was using that event/time as the recall date.
Mine was by recall
I don't take the time to deeply study every figure but the gist of what I said is accurate.
If you have so much dead time on your hands, Tenchu, that you want to go to historical sites and get exact figures - have at it.
So speaking of scandals
which I did today in an earlier post
and knowing who will be next and how much does it take for ordinary investors to think things are really stacked against them and rigged?????
read below:
Scandal shakes fund shareholders
By Jonathan Burton, CBS.MarketWatch.com
Last Update: 2:14 PM ET Sept. 3, 2003
SAN FRANCISCO (CBS.MW) -- Shareholders who thought their fund companies were above reproach had that trust broken Wednesday as several were charged with trading abuses.
The illegal practices enriched fund managers at shareholders' expense, according to New York Attorney General Eliot Spitzer.
Fund industry observers were taken aback by the magnitude of Spitzer's allegations.
"I find it absolutely stunning and almost inconceivable that anything like that could possibly go on with any fund firm that has even a hint of value to its reputation," said Jack Bogle, founder of fund giant Vanguard Group and an outspoken fund industry critic.
Four fund families including Bank of America's (BAC: news, chart, profile) Nations Funds, Banc One (ONE: news, chart, profile), Janus Capital Group (JNS: news, chart, profile) and Strong allowed a hedge fund called Canary Capital Partners to trade their funds after the market close, in violation of federal law, Spitzer said. He likened the late trading to "betting today on yesterday's horse races."
Additionally, Spitzer said the fund companies permitted market timing of their funds -- trades based on expectations of very-short-term gains -- when their prospectuses specifically assured investors that such practices were discouraged.
In exchange for these special arrangements, the fund companies allegedly received substantial investments into some of their funds, enriching the assets under management -- and themselves, Spitzer charged.
"This is a 'go to jail' accusation; this is not a slap on the wrist," added Louis Harvey, president of Dalbar, a financial-services market research firm in Boston that advises fund companies. "I've never seen any infraction of this scale in the fund industry."
Mutual funds are priced once daily at the market's 4 p.m. EST close. Spitzer says the funds illegally allowed Canary to buy shares at the day's closing price after the close, taking advantage of any market-moving events occurring after the close.
"The late-trader's gain is the long-term investor's loss," Spitzer said in the complaint filed against the fund companies.
"Buying late in the day dilutes the current shareholders," said Geoff Bobroff, a fund industry consultant. "This is raising the inherent conflicts that exist in the industry, with the manager making sure that he benefits even though there might be some diminishment of value to their investors
I've never owned AMD stock
and Dan3 is a person I see posting as an AMD zealot on this and the SI Board. I have never been pro AMD.
In fact for years I was accused of being too pro Intel and blindsided. to their shortcomings.
But over the last few years I have watched them announce out of both sides of their mouths and no investor can rely on what they tell us as accurate and investment grade advice.
And I am aware of the "exhubrance you show for guessing Intel right since the Q1 earnings came in and all heck has broken loose. I owned the $15 stock and I have seen it rise for 4 months since the second week of April.
Sometimes in history markets move for no reason upward or downward.
The last six months are waiting on history to judge them.
I own Intel so I hope it is the start of something great.
But my wisdom says this is still debatable and not a hard fact yet. PE ratios always count just like currency rates count and balance of trade issues count and federal debt counts and war counts and long term interest rates vs treasuries count and employment figures count and a lot of other things count.
But some people luck out and go blind and still win big.
So goes life....
Well - I remember May 2000
I think that was the day that Intel traded at $35 (adjusted for split) and their earnings were over $2.20 a share (around $1.10 adjusted) and they had a $36 billion year or about $9 billion a quarter and they were working on 56% gross profit. I think th pe was around 35 times or lower...
Now if all that is happening today -this year the stock should go to about $35 a share.
Do you want me to blindly say that the company is hitting on all 12 cylinders and I am simply the black clound over the bright sunny day?
Or is there anything you could see that might just a smidgen suggest that there is a weaker company today compared to 2000?
I think the world is very optimistic right now
and no matter what the Intel report says it will either be discounted or cause market euphoria.
I remeber just a couple of months ago when Intel said great things were happening and Barrett said the market was over optimistic.
The stock is still climbing.
Of course it is the 80% market share and the investment in a leader in their industry that is the reason for investing in Intel.
But it is just as confusing to see AMD almost double during the past year when it has been in deep red for all that time.
Go figure.....
Until we get through 2003 and into January and February 2004 the market will keep optimistic and discounting of any bad news.
And how does the fact that September and especially October are the traditional market worst months stack up with this?
I think this is not the year when the market will tank but there is room for some modest correction.
As long as we have tons of money and tons of money managers willing to risk buying stocks and as long as there is almost zero return in investing in savings accounts forcing people to scramble for money returns over 1%- expect stocks to rise and people to flee into the stock market.
But the real risk is when this bubble bursts and the realities hit home.
Rising interest rates, federal debt at record levels, two unstoppable guerrila wars in Iraq and Afghanistan, the early spring 2004 primaries, and more corporate frad that hasn't really ever stopped.
That is what will do our economy in if it ever gets legs....
Intel cautions on 3Q sales rebound
CEO of No. 1 chipmaker says firm is unsure if jump is due to delayed demand following SARS.
August 26, 2003: 7:37 AM EDT
PENANG, Malaysia (Reuters) - Chipmaker Intel Corp. cautioned Tuesday that its third-quarter sales rebound that has excited investors might be temporary and was not a sure sign that the sector had emerged from its three-year slump.
Intel (INTC: Research, Estimates) shares fell 24 cents to $27.00 in before-hours trading Tuesday.
"We don't know how much of this Q3 is a kickback of a SARS-related spending that didn't happen in Q2," Intel Chief Executive Craig Barrett told Reuters in an interview, referring to the outbreak of Severe Acute Respiratory Syndrome virus in East Asia this year.
Asia Pacific accounted for two-fifths of Intel's $6.8 billion revenue in the April-June quarter.
"The question whether the fourth quarter will continue off of that, based on what we said for the third quarter, we don't know yet," said Barrett, who was on Malaysia's northern Penang island to launch a new $40 million design center for Intel's local plant.
He did expect a rise in fourth-quarter PC sales due to seasonal demand, he said, but was unsure whether the traditional year-end boom would be sharper this year than in 2002.
Industry outlooks and earnings guidance from Intel, whose processors are found inside 80 percent of personal computers worldwide, are closely watched by a semiconductor market with an estimated $150 billion in annual sales.
The Santa Clara, Calif.-based firm surprised investors Friday when it raised revenue and profit margin forecasts, but declined to call a definitive recovery for the still struggling industry.
Despite the contradictory stance and analysts' cool response to its optimistic forecasts, Intel shares shot to a 14-month high Friday and lifted other technology stocks. But it lost 0.55 percent Monday versus a 0.06 drop in the Nasdaq Composite Index.
Intel expects revenue in the July-September period to rise to between $7.3 billion and $7.8 billion, up 11 percent from the second quarter. Only last month it had forecast sales of $6.9 billion to $7.5 billion.
No -64-bit rush
Barrett also said Intel was unworried by a new line of super powerful microchips due to be released by nearest rival Advanced Micro Devices Inc (AMD: Research, Estimates)., and did not plan to offer desktop equivalents to protect its market share.
There has been speculation the new AMD chips, the Opteron and Athlon 64, could pose the biggest-ever threat to Intel's popular Itanium and Pentium chips.
There were still no applications software for the Athlon 64 and an operating system promised by Microsoft would not come to market until next year, he said.
"We have no plans at this stage for a 64-bit address extension like the AMD device for the desktop," said Barrett. "AMD has embarked on a late-year company strategy. That's fine but I wouldn't trade places with them."
AMD has Q2 loss 40c, revenue $640 mln
AMD Q2 loss 40c, revenue $640 mln
Is it negative to say what is true
and does that make me a bear?
or are yo ua blamy blind optimist?
If you think Intel is flying today
remember what was in the Wall Street Journal today that said on page one of an inside section"
The paper story said: 35% to 45% of all trading in this rally each day is by "hedge funds" who need to show "short term profits" to keep the fund churning and profitable.
In case this message is missed, you are not trading a stock with "investors". You are trading a stock with "day traders" and "speculators" and "quick buck artists".
I think Intel will post a better quarter but I hardly expect it to show the proportionate growth of earnings that the stock price has shown over the last reporting day in April, 2003.
The stock has climbed from $17 to $24+ and this is about another half of the earlier price. Perhaps there is thinking that the $0.09 cents earnings will go to $0.14 earnings per share. That is quite a jump
It would be a quantum leap to show that much growth for a traditionally very slow second quarter.
Intel: Out of options?
Microsoft's decision to grant shares to employees could put pressure on the chipmaker.
July 9, 2003: 11:40 AM EDT
By Justin Lahart, CNN/Money Senior Writer
NEW YORK (CNN/Money) - Microsoft and Intel's businesses are so joined at the hip that the software and hardware bundle that runs most personal computers has come to be called "Wintel".
But in its decision to do away with the stock options it grants employees, Microsoft was hardly a friend to Intel.
Among the many tech companies that have made a habit of doling out stock options, but not treating them as an expense against earnings, Intel is king. Despite years of criticism of the practice (from the likes of Warren Buffett and former Fed Chairman Paul Volcker, among others), the company has steadfastly contended that the way it treats options is entirely appropriate.
Intel says that treating stock options as an expense, like other forms of compensation (such as wages and benefits), doesn't make sense because it penalizes the company twice. First, it counts against income, and second, because it increases the number of shares outstanding, it dilutes earnings per share. That doesn't make sense, the chipmaker says.
A load of bunkum, say the company's critics. They point out that as Intel has steadily doled out options, its diluted shares outstanding have remained more or less the same, going from 6.52 billion shares at the beginning of 1998 to 6.53 billion shares at the end of the first quarter.
How come? Because Intel has steadily bought back $20.1 billion in its shares during that period -- under accounting rules that stock buybacks don't count against income. If they did, according to Julius Baer head of U.S. equities Brett Gallagher, instead of generating $25.7 billion in cash since 1998, Intel would have made just $5.6 billion.
"They're running the greatest scam in America," he said. "They're a huge cash generation machine, but none of it finds its way to shareholders."
An extreme view? Perhaps. But there is little doubt that the earnings numbers at Microsoft, which had already made the decision to treat options as an expense and now has decided to grant shares to employees instead, are going to look a whole lot less fuzzy to investors. The pressure on Intel to change its ways will mount.
Another of Intel's contentions on the employee stock options front is that there is no reasonable way to put a value on them. Yet Microsoft has struck a deal with J.P. Morgan allowing employees to sell their existing options to the bank. Apparently the company believes that putting a price on options is in the realm of possibility.
"Intel says it can't put a number on the value of employee options," said Gallagher. "But any estimate is closer to the truth than zero."
Microsoft
No other large tech company is in such good financial shape. The true cost of Microsoft's options, using the popular Black-Scholes model to value them, was $1.3 billion in 2002 -- about 12.7 percent of earnings that year.
In comparison, the value of Intel's (INTC: news, chart, profile) options was $1.9 billion -- about 55 percent of that company's earnings, according to research from Sanford C. Bernstein & Co. in New York -- one of the few research firms that isn't influenced by investment banking business.
The value of Dell Computer's (DELL: news, chart, profile) options was $1.6 billon, or 78 percent of earnings. Applied Materials' (AMAT: news, chart, profile) cost was much smaller-- $96 million -- but that was still 28 percent of earnings.
What's worse is that many tech companies were heavy issuers of stock options, and they had no earnings at all last year. Examples include Sun Microsystems (SUNW: news, chart, profile), Micron Technology (MU: news, chart, profile), Agilent (A: news, chart, profile) and JDS Uniphase (JDSU: news, chart, profile).
oLD gUY AND "DROOL"
ARE SIMPLY DERIDING TERMS TO MAKE A PERSON FEEL LITTLE.
lISTEN TO YOU.
plain afraid to stick with rules and past experiences in valuing stocks and companies and busy telling the world the stock market has a new set of rules.
Reminds me of the "bubble crowd" 3 years ago. There was never a top and all was going to the moon!
Absurd!
Old fashioned - am I ? ? ?
you say: "INTC is trading at 47 times earnings. I say so what?"
So what? So everything.
The P/E ratio is an accurate barometer of the value of a company and the price of the ownership.
If you want to pay twice as much as something is worth on the supposition that it will become that value - so be it.
Most serious investors will set a price and pay whatever it is worth. Not much more.
For the most part a stock that is overpriced will go down until fairly priced.
Now why doesn't Microsoft trade at twice the price. After all it is 25 times earnings and definitely going to be around for many decades? Misrosoft certainly owns the market and will command a monopoly for decades until they screw up. and $47 billion in the bank and $8 billion more each year!
Microsift trades at 25 times earnings because whenever it gets higher there are traders that sell their position and resort to waiting for a lower price.
Four five years this patter of $60 (now $30) stock has been stuck in a RUT. iT MEANDERS FROM THE NEAR $20'S TO THE UPPER $20'S. nO MORE.
Are all these investors in Microsoft fools????
Or do they balance people like you out and cancel your exhubrance?????
I also read the WSJ
and I simply think whomever was writing was plain wrong that there is 40% cash on the sidelines.
I was quoting Arthur Levitt who was on the Bloomberg morning show two days ago and he was painting his picture as he saw it.
Since he would be a great source for accurate information (ex president of the NYSE) and since the 4% is far more reasonable than the 40% cash on the sidelines - I will stick with my position.
But in fairness I will keep an eye open for what you think you saw.
More to follow (I'm sure)
Some people just refuse to read the tea leafs
you said: "you can sit on the sidelines and wait for the time when the world is perfect"
I think it is a quantum leap from sage advice to blind upside faith but I must admit you have been in the majority for the past 90 days and we will see just how the rest of this year plays out.
Remember the saying - pigs get slaughtered.
I get the 90% figure by owning and running corporations
which I have done for the past 36 years.
It is simply a fact of life unless you are Microsoft and have an 80-85%% gross profit which is so unusual as to be bizarre.
Intel has about a 50% cost of goods and this is plenty great but it still had to spend the other part wisely which it does.
They make only a limited amount of profit like about 16% of their sales or about $900,000 on $6.5 billion per quarter. And Intel is also a very high success in a larger than normal net profit per unit.
So do not think that they have unlimited potential to expand that percentage indefinitely. It is the last two weeks of the quarter that tells the final story for Intel and many companies.
Simply not true
There are absolutely, irrevocably, and undeniably NOT 40% of all funds are in money market funds waiting to get back into the market.
How did you get such a cockamanie figure anyway???? That is just plain wrong, wrong, wrong!!!!
It is too optimistic to believe that...
Centrino and Manitoba will make a significant difference in the p/l and that flash is improving but not that much to make it so different. And you are historically correct that the next 6 months are the stronger period after this weak quarter.
But we do not know if there will be a public shopping spree.
Or perhaps by the end of the year we have all lost jobs, lost more money on 401k plans, lost money on financing new houses at 4+ percent that are not appreciating and buying new cars at zero percent, and now we are tapped out when it comes to buying toys in the holidays.
Remember it is not the 90% of the business sales that makes any difference. It is the last 10% that is the difference between profit and loss. All the rest is fixed costs like payrolls, rents/leases/buybacks, and overhead expenses.
And it takes so little to upset this balancing act. Just a bad weather week can stop everything. Just a quick 9/11/2001 can turn the nation's focus elsewhere. Floods, hurrricane, national disasters. Or possibly a ride across the desserts of Iran on the back of a Humvee as we approach Teheran in another war televised....
All of this is distracting to the shopper and takes away some of the optimism.
Then there is real American who dauntingly faces the increased college tuition, higher school clothing costs, the increase property taxes, larger utility bills, increasing gas prices, and insurance increases. Add to that a terrible imbalance on import/exports with the third world gleefully taking up our labor/work. And how about all the imported goods coming into this country that reduces the U.S.labor market. And how about our own national debt which is so large that we are taking $1 out of every $25 from our federal income tax just to pay the interest on that debt every day//// Could you live like that???? And the loss of our privacy by giving our drivers licenses every time we go to Home Depot or shop a chain store... We have no privacy left.
All this is destabilizing and can have an effect. Will we have enough bucks in our pockets to do all we are being expected to do? like a buying spree nonstop.
So where is there to be so optimistic. A few more new things to sell or possibly a competitor that we all know is going to fold in the next year in some dramatic way. Can all that offset the overpricing of the stock?
Time for a reality check
If Intel is now at 47 times earnings and this $12.90 stock in February and this $17.00 stock in April and this $22 stock in July 2nd is still in the $0.16 earnings range - how much optimism can the real world stand?
It is one thing to think there will be a penny or two more earnings - but the stock has climbed to the stratosphere and almost doubled from its low this year.
What is really going on is:
1) We are seeing the flight of capital into the stock market because as people's cd's mature and they are offered 1.6% for the next certificate of deposit - they opt to put their money to work. Some in mutual funds and some invested by themselves. Where is there more safeness than in Intel and Microsoft which are blue chip tech stocks?
2) The end of the June period we saw a flight of capital rushing upward to buy their portfolio back. Get in now so that you don't miss the stock market rise.
Theywant to get ahead of a percieved rise of stock prices on the earnings season news. The money managers are invested all the way to the hilt. Mutual funds have only 4% of funds today in cash according to Arther Levittt, ex chief of the NYSE, when the normal number has been as high as 15% cash on the sidelines in times of extreme low interest. Our money managers are chronic gamblers. He says the market has to fall according to historical standards. He claims we are in a bubble according to seven tests and we are at extreme risk.
3) The lottery effect. We as a people have learned to emulate the lottery winners who place bets to get a better life. We are becoming a nation of gamblers.
So when I hear someone say that we are in for a "pleasant surprise" on Intel earnings and that is the reason for investing I reply. They are still at 47 times their past performance in earnings and it would take at least another dime a quarter per share in Intel earnings to justify the high valuation for that stock.
Three stocks: A Look at Intel
Increased tech spending is benefiting the chipmaker, but can the good times last?
July 2, 2003: 11:04 AM EDT
By Justin Lahart, CNN/Money Senior Writer
NEW YORK (CNN/Money) - If only America's businesses were as willing to spend as its consumers, the economy would be fine and dandy. Alas, this has not been the case.
Three years after going on a buying binge that would put Carrie Bradshaw to shame, U.S. companies have been remarkably unwilling to part ways with their cash. Worried over the possibility that the economy will run back into recession, they're determined to buy only the bare necessities. The result has been a contraction in business spending in all but one of the past 10 quarters.
In other words, it hasn't been a kind business environment for Intel (INTC: Research, Estimates). The big chipmaker, whose microprocessors lie at the heart of most personal computers, has seen its sales steadily erode since the beginning of 2001. Intel desperately needs U.S. companies to start laying out cash on tech equipment again.
The good news, for both Intel and the economy, is that it appears that this may have begun to happen.
In a June survey of Chief Information Officers at 311 companies, CIO Magazine found 14.5 percent of respondents said they had recently replaced a significant number of personal computers, while another 32.9 percent said they were in the midst of a significant replacement cycle now. The percentage of respondents who said tech spending prospects look "bright" over the next three months lifted to 18 percent from 11.6 percent in April.
"I don't think we're going to see Intel grow as fast as it did in the 1990s, because we're talking about a more mature industry," said Ed Hemmelgarn, head of the Cleveland-based hedge fund Shaker Investments. "But I do expect it to start growing again."
So do Wall Street analysts, who reckon the company saw sales jump by 5.6 percent in the just-finished second quarter from the second quarter of 2002. It would be just the second time since 2000 that the chipmaker has posted sales growth. Since Intel hasn't issued any kind of warning, it seems likely that it will at least meet these expectations.
Yes, but ...
The question, however, is whether the growth can continue. Yes, there does appear to be renewed demand for PCs from corporate America, but a fair amount of it is probably related to companies finally getting around to replacing all the equipment that they put in place ahead of the year 2000, when worries about Y2K disruptions prompted a bulge in tech buying. Once companies finally get around to replacing the four-year-old machine that's been sitting on Mrs. Johansson's desk, what's going to prompt them to buy more?
First, there needs to be a further acceleration in corporate profits, which pretty much are the main determinant in how much companies spend.
Second, the employment picture needs to improve. If Mrs. Johansson loses her job, there's no point in buying her a new PC. If you hire her an assistant, on the other hand, that's one more desktop you're going to need.
Bulls hope that Intel's brightened prospects augur well for the entire economy. First, companies will spend money on established technology equipment, like PCs, which have a track record boosting productivity, then they'll move on to investments with lower returns, like buying new lathes, or repaving the parking lot, and finally they'll move on to blue-sky investments, like emerging technology solutions.
Climbing back
Intel's earnings and revenue growth
Year* Earnings growth Revenue growth
2001 -68% -21%
2002 -2% 1%
2003 22% 5%
*2003 projected
Source: First Call
Unfortunately, points out Merrill Lynch chief North American economist David Rosenberg, there is scant evidence that this is about to happen. Yes, companies do appear to be boosting their spending on tech, but outside of tech, orders for new equipment have been dropping. That's a sign that companies are cutting into spending on other areas to boost their spending on tech.
Even increased profit growth might not be enough to turn the tide. Many companies are still straining under the excesses sown during the boom years, and much of the non-tech equipment they bought back then isn't likely to become obsolete as quickly as tech equipment does.
"You need more than just the ability to spend, you need the incentive to spend," said Rosenberg. "You're only going to start spending if you can prove to your board that your investment is going to pay off."
I cashed out two weeks ago and no position
A Foolish Market Scene
Intel at $17 and Intel at $22.50
Both are same company with about same sales and about same profits.
Little changed between 90 days ago and now except we are back in the "exhubrance" stage again.
Intel stock has climbed at least 25% on little news.
Market has done about the same.
People think all is ok and the world is at peace and moving back into a summer stock rally and better earnings.
Here are a few things to think about.
Wall-mart only up 2% last month which is about the same amount as population growth in USA. Nothing happening here.
Homes are still hot. Refinancing market and new housing market will be one of our growth industries in 2003. What happens after this is done in 2004?
Cars are stuck in idle. Dealers only can sell cars if there is zero or low interest financing and you give new cars away. Ford is tettering on bankrupcy.
Another growth industry is bankrupcy. All airlines, Fleming Foods (2nd largest wholesaler in food industry, telecommunications (MCI, etc), and a lot of others are there. That is our new growth industry and keeps attorneys rich. Is this what we need for 2004? More corporate bankrupcy?
Another growth industry is biotech which is a legal bet on gene alteration. This is often outright gambling and not real safe investing. IMCLONE is a good example. Poor Martha - she had it right....
Another growth industry is security. More police! We keep adding layers of protection to the public and this is going to cost a lot more. No matter where I go there is ever increasing security and more people securing me. More police,. More screeners at entryways in arenas, malls, airports, etc.
The tax cut is supposed to make us spend and the last time it did nothing for the economy. I think that will be the same this time around.
And the public chatter!!!! We are barraged daily by spin on Squakbox, Bloomberg, MSNBC, etc on the "rebound" and the "new economy" and the parallels to the "late 1980's", etc. Over 60% of Americans own so stock and the other 40% are so poor they are on the government handout programs. Not exactly a balanced world.
Employment is keeping a lot of people nervous. Job security is in the toilet and permanency in a job is an illusion. Some work is going off shore and many companies are retreating on keeping permanent full time employees. The game is to get rid of this extra baggage and trim overhead. Stocks are responding to les overhead even though it is your son or daughter or neighbor who is affected. That is not a good way to solve problems.
So what does all this add up to:
We have an economy filled with nerevous crap shooters filled with road rage and they are only interested in themselves. People who love to gamble on an unstable stock market that is fueled by rumors of future prosperity such as Intel, the housing and refinancing bubble and the biotec stock represent. A very self centered population.
At the same time government is spending us into oblivion and we fight all the wars in the world, are not respected by many nations except for our superpower might, and our citizens are losing their privacy rights and their expectations of permanent secure emplyment.
So they are willing to risk their last hope and that is their stock portfolios which are betting on the rising market and the new tech bubble.
Summary: We are a sick people looking for some wisdom in a land of fools. So the run up in stock prices and expecially Intel has to be a byproduct of the "irrational exhubrance".
Foolish market scene
Intel at $17 and Intel at $22.50
Both are same company with about same sales and about same profits.
Little changed between 90 days ago and now except we are back in the "exhubrance" stage again.
Intel stock has climbed at least 25% on little news.
Market has done about the same.
People think all is ok and the world is at peace and moving back into a summer stock rally and better earnings.
Here are a few things to think about.
Wall-mart only up 2% last month which is about the same amount as population growth in USA. Nothing happening here.
Homes are still hot. Refinancing market and new housing market will be one of our growth industries in 2003. What happens after this is done in 2004?
Cars are stuck in idle. Dealers only can sell cars if there is zero or low interest financing and you give new cars away. Ford is tettering on bankrupcy.
Another growth industry is bankrupcy. All airlines, Fleming Foods (2nd largest wholesaler in food industry, telecommunications (MCI, etc), and a lot of others are there. That is our new growth industry and keeps attorneys rich. Is this what we need for 2004? More corporate bankrupcy?
Another growth industry is biotech which is a legal bet on gene alteration. This is often outright gambling and not real safe investing. IMCLONE is a good example. Poor Martha - she had it right....
Another growth industry is security. More police! We keep adding layers of protection to the public and this is going to cost a lot more. No matter where I go there is ever increasing security and more people securing me. More police,. More screeners at entryways in arenas, malls, airports, etc.
The tax cut is supposed to make us spend and the last time it did nothing for the economy. I think that will be the same this time around.
And the public chatter!!!! We are barraged daily by spin on Squakbox, Bloomberg, MSNBC, etc on the "rebound" and the "new economy" and the parallels to the "late 1980's", etc. Over 60% of Americans own so stock and the other 40% are so poor they are on the government handout programs. Not exactly a balanced world.
Employment is keeping a lot of people nervous. Job security is in the toilet and permanency in a job is an illusion. Some work is going off shore and many companies are retreating on keeping permanent full time employees. The game is to get rid of this extra baggage and trim overhead. Stocks are responding to les overhead even though it is your son or daughter or neighbor who is affected. That is not a good way to solve problems.
So what does all this add up to:
We have an economy filled with nerevous crap shooters filled with road rage and they are only interested in themselves. People who love to gamble on an unstable stock market that is fueled by rumors of future prosperity such as Intel, the housing and refinancing bubble and the biotec stock represent. A very self centered population.
At the same time government is spending us into oblivion and we fight all the wars in the world, are not respected by many nations except for our superpower might, and our citizens are losing their privacy rights and their expectations of permanent secure emplyment.
So they are willing to risk their last hope and that is their stock portfolios which are betting on the rising market and the new tech bubble.
Summary: We are a sick people looking for some wisdom in a land of fools. So the run up in stock prices and expecially Intel has to be a byproduct of the "irrational exhubrance".
If Options Counted, Intel's Cost $298 Mln
Reuters, Wednesday May 7, 2:10 pm ET
SAN FRANCISCO (Reuters) - Intel Corp.'s (NasdaqNM:INTC - News) first-quarter net income would have been reduced by one-third if it had accounted for stock options as an expense, the world's largest computer-chipmaker said on Wednesday in a filing with securities regulators.
ADVERTISEMENT
Intel, the top maker of microprocessors that are the brains of personal computers, also backed its previously given forecast for second-quarter revenue, according to its quarterly filing with the U.S. Securities and Exchange Commission (News - Websites).
An uncertain global economy has made it hard to forecast demand with great accuracy, Intel noted. Intel forecast second-quarter revenue of $6.4 billion to $7 billion, the same outlook that it issued on April 15, when it reported first-quarter results.
Intel, a vocal opponent of accounting regulators' efforts to mandate the expensing of stock options, said such a requirement would have cost it $298 million or 5 cents per share, in the first quarter, based on the Black-Scholes option pricing model, the most often-used method to value options.
That would have cut quarterly net income to $617 million, or 9 cents per share -- 33 percent less than the $915 million, or 14 cents per share, that the company reported under generally accepted accounting principles.
In the year-earlier quarter, expensing stock options would have cost Intel $287 million, or 4 cents per share, reducing net income by 31 percent.
Intel's Chief Executive Officer Craig Barrett penned a recent op-ed article in the Wall Street Journal in which he argued that top executives might not be able to certify companies' results because the value ascribed to the stock options may be inaccurate.
Others, however, have pointed out in response that all accounting involves assumptions and estimates, such as with goodwill, and other items on companies' statements.
The Santa Clara, California, company said it expects capital spending in 2003 of $3.5 billion and $3.9 billion unchanged from previous expectations.
Intel said it expects amortization costs related to acquisitions at $80 million in the second quarter and $300 million for 2003.
The company, whose shares fell 23 cents to $19.31 on Nasdaq in midafternoon trading, said it would update investors again on its business on June 5 after U.S. markets close. (Additional reporting by Caroline Humer in New York)
If Options Counted, Intel's Cost $298 Mln
Reuters, Wednesday May 7, 2:10 pm ET
SAN FRANCISCO (Reuters) - Intel Corp.'s (NasdaqNM:INTC - News) first-quarter net income would have been reduced by one-third if it had accounted for stock options as an expense, the world's largest computer-chipmaker said on Wednesday in a filing with securities regulators.
ADVERTISEMENT
Intel, the top maker of microprocessors that are the brains of personal computers, also backed its previously given forecast for second-quarter revenue, according to its quarterly filing with the U.S. Securities and Exchange Commission (News - Websites).
An uncertain global economy has made it hard to forecast demand with great accuracy, Intel noted. Intel forecast second-quarter revenue of $6.4 billion to $7 billion, the same outlook that it issued on April 15, when it reported first-quarter results.
Intel, a vocal opponent of accounting regulators' efforts to mandate the expensing of stock options, said such a requirement would have cost it $298 million or 5 cents per share, in the first quarter, based on the Black-Scholes option pricing model, the most often-used method to value options.
That would have cut quarterly net income to $617 million, or 9 cents per share -- 33 percent less than the $915 million, or 14 cents per share, that the company reported under generally accepted accounting principles.
In the year-earlier quarter, expensing stock options would have cost Intel $287 million, or 4 cents per share, reducing net income by 31 percent.
Intel's Chief Executive Officer Craig Barrett penned a recent op-ed article in the Wall Street Journal in which he argued that top executives might not be able to certify companies' results because the value ascribed to the stock options may be inaccurate.
Others, however, have pointed out in response that all accounting involves assumptions and estimates, such as with goodwill, and other items on companies' statements.
The Santa Clara, California, company said it expects capital spending in 2003 of $3.5 billion and $3.9 billion unchanged from previous expectations.
Intel said it expects amortization costs related to acquisitions at $80 million in the second quarter and $300 million for 2003.
The company, whose shares fell 23 cents to $19.31 on Nasdaq in midafternoon trading, said it would update investors again on its business on June 5 after U.S. markets close. (Additional reporting by Caroline Humer in New York)
I think the tech NASDAQ market has just about topped for now
and I would expect the reverse direction on stock prices and a downward movement in the next weeks.
The $8 for AMD would appear to be tops in my estimation.
AMD has a lot of things it has to overcome before it can go much higher. The biggest thing is that they will need to improve earnings (actually they need to GET earnings).
Some here think this will happen soon and many have predicted it will take a lot longer than this year. I think it is a ways off if it ever happens....
But whatever the case, if you value a stock by what it "represents and the earnings are the true test of what a stock is worth - AMD has not met that level and is priced very high in this historical time.
That is why I believe the stock will go back to the $5-$6 range in the reasonable future.
So that is why the stock should be traded as if the price is going to go down - not up
And that is why I made the statement:
"The October $10.00 calls for AMD are very pricy and you would have to believe in the tooth fairy to make that ivestment! At a selling price of $0.60 you will lose your investment quickly."
And you said: "I think he was suggesting selling CCs. I don't think it's such a bad bet. I guess it depends on your expectations doesn't it? Why do you think it's bad?"
The October $10.00 calls for AMD are very pricy and you would have to believe in the tooth fairy to make that ivestment! At a selling price of $0.60 you will lose your investment quickly.
I think he was suggesting selling CCs. I don't think it's such a bad bet. I guess it depends on your expectations doesn't it? Why do you think it's bad?
The October $10.00 calls for AMD are
very pricy and you would have to believe in the tooth fairy to make that investment!
At a selling price of $0.60 you will lose your investment quickly.
Intel rolls out wireless Web chips
Firm says Centrino chipset may lift tech from doldrums; Wireless PCs to sell for about $1,399.
March 12, 2003: 7:04 AM EST
The world's largest computer processor maker, launched a set of chips Wednesday it said will make wireless Internet access a standard feature on laptops within a year.
At news conferences throughout Asia, Intel showed off a set of chips known as Centrino it said will allow mobile computer users to access the Internet at home and a growing number of public places via radio waves.
At an event in Tokyo, Intel Chief Operating Officer Paul Otellini said the chip could change telecommunications much the way that other wireless services did when they were introduced. "Just like cellphones and cellular infrastructure unleashed telecoms, we believe in this decade wireless notebooks are going to unleash computing," he said.
Computer firms IBM Corp., Hewlett-Packard Co., Dell Computer Corp., Toshiba Corp. and Sony Corp. have already pledged to include the chipset, microprocessor and software in their new notebooks.
Intel said Centrino notebooks would cost about the same as current laptops, starting as low as $1,399. In Japan, models are expected to sell for as low as ¥200,000, or $1,702.
At an event in Sydney, Intel Australia general manager David Bolt said the chips could usher in a wave of new development that will help to lift the technology sector out of the doldrums.
"Certainly we think that all the signs are very, very positive for mobility and wireless based high speed broadband communications to really help us deliver true value to customers," Bolt said.
Intel is throwing its weight behind a wireless technology that has suffered for years from fragmented development and a raft of names such as Wi-Fi, WLAN (wireless local area network) and 802.11.
The technology could dent demand for mobile phones capable of connecting to the Internet.
Centrino laptop users would be able to surf the Internet, or sign onto corporate networks, if they are within 100 meters (100 yards) of access points.
Intel has signed deals with telephone operators China Mobile and China Netcom to build Wi-Fi networks in high-traffic public areas in China, which has the world's second-largest number of Web users.
Major telephone operators in Japan and South Korea have also jumped onto the bandwagon, expanding wireless Internet networks even though the technology will compete with their high-end mobile services.
Intel (INTC: Research, Estimates) shares fell 5 cents Tuesday to close at $15.85.
--------------------------------------------------------------------------------
Copyright 2003 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Intel narrows sales forecast
No. 1 semiconductor company cuts the high end of its previous guidance. Stock down after hours.
March 6, 2003: 4:25 PM EST
NEW YORK (CNN/Money) – Intel, the world's largest maker of semiconductors, narrowed its first-quarter revenue guidance Thursday. But its most optimistic expectations are below what it predicted earlier this year.
In a statement, the company said it expects sales to come in between a range of $6.6 billion and $6.8 billion. In January, Intel told Wall Street that it was expecting revenues to come in between $6.5 billion and $7 billion. According to First Call, the consensus estimate of Wall Street analysts is $6.8 billion, unchanged from the same quarter a year ago.
The company did not give guidance on earnings. Analysts are expecting earnings per share of 12 cents, compared with 15 cents a share in the first quarter of 2002.
Hopes for a semiconductor recovery have been increasing as of late. Shares of Intel (INTC: Research, Estimates) have gained nearly 7.5 percent this year and are up more than 25 percent from their early October lows. Two prominent Wall Street analysts also recently upgraded their view on Intel and other chip companies.
But Intel's stock tumbled more than 3 percent in after-hours trading on Thursday. Shares fell 28 cents, or 1.6 percent, to $16.70 in regular trading.