Dear WBMW: Re: “Perhaps if you are a short term shareholder, you might prefer that Intel spend this money on you…”
I started investing in Intel the day I learned that IBM chose Intel’s microprocessors for the first PC. I continued adding to my portfolio of INTC and never sold any.
I agree with your evaluation of the employee and management of Intel. I could add that I believe that the ONLY significant value of Intel IS the “brain trust inside the company”. I trusted them with my savings and the future of my children and grandchildren.
I also believe that this magnificent team is worth every penny they earn. I also am aware that the six-year stagnation in the value of Intel’s share is a threat to their future. The only way they may benefit from the half a billion shares they earned depends on an early increase in their value, before the options expire. We, the long-term investor, are their partners.
My claim is based on the observation that enormous buy-back of shares does not increase the price of INTC shares. Enormous dilutions of AMD shares were often followed by exuberant increases in share evaluation. Wall Street is increasingly sensitive to yield (dividend), mostly because of the lowering of the income tax on dividend to 15%. I believe that we need a change in strategy.
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