Advanced Micro Devices Inc (AMD)

[kpf]

Petz

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=19709713

is very very interesting. I basically like the approach.
Im not finished yet thinking about it. Some comments on your numbers: There will be not much taxes for quite a while to pay for AMD. And AMD has driven down costs significantly. That would somewhat change the underlying revenues for future earnings.

And on the approach: Your considerations about stockprice-peak and earnings-peak in 2000 have to be put into the context of brisk change of market sentiment during Q3/2000, and (which is the other side of the very same medal) points to higher expectations for AMDs future earnings at the stockprice peak.
Basically, the historical viewpoint you take is a rear-mirror view. Which is fine. Im just not sure if any projections therof into the future are valid. Maybe looking at 2000 from hypothetical viewpoints within the first half of 2000 would be more appropriate?

I would agree the markets currently look ahead some six months (which historically is a very low horizon). Specifically for AMD, that may well persist due to concerns of manufacturing execution but could increase a whole lot as soon as the street has confidence Fab 30s migration to 90nm will be (more) successful (than Intels). As soon as this would happen, the horizon would expand to 2005 earnings.

K.