Posted by: bobs10
In reply to: None
Date:9/30/2005 12:20:48 PM
Post #of 63070
INTC tunnel vision
I find it amazing the way the Intelatubbies tend to fall back on earnings whenever defending the total irrationality of INTC as an investment. Besides the fact that INTC is living proof that what a company earns doesn't necessarily have anything to do with the value of its' stock there's the thing that I keep talking about, namely, that earnings are a trailing indicator. As such earnings are usually the last thing to fall when a company is in deep do do because falling earnings are the one thing stockholders and the BOD cannot ignore. As such, a company in trouble does anything it can to keep up appearances while a company on the rise usually is more focused on making sure all of the prerequisites to rising earnings are in place.
As an investor I'm much more concerned with what the stock price does than what the company earns. After all I can't take a company's earnings to my bank; I can only take what someone else is willing to pay me for my stock. From that point of view sizzle is just as important a product as any widget anyone has ever invented. Indeed hope is a company's most basic product.
From that point of view an investment in INTC, despite seeming to make sense on traditional market valuations basis such as P/E, makes no sense on a sizzle basis. To more and more investors INTC looks like a giant with vertigo stranded on a catwalk far above reality. People will always pay a lot more for sizzle than reality since sizzle knows no bounds and any expectation can seem reasonable.
OK, what I'm getting at is that AMD's current valuation, based on passed history, is in nosebleed country. I for one have been through this earnings emotional roller coaster too many times to want to go through it again. Indeed I would much rather AMD slowed down a little and let its' earnings and projections speak for the value of the stock. But, as usual, the market gives my desires short shrift and since I'm as addicted to sizzle as the rest of you I'm forced to become Mr. market's plaything.
Having said the above, there is still no investment like a sizzle play that proves itself with earnings. If AMD comes in, as I expect, around $.20 watch out.
One thing about owning AMD it's never dull. God I hate/love this stock.
I hear you.
But with all due respect. I recognised AMD's potential long before WS.
There was a time when My perspective was anchord to the biggest and best semi conductor maker on this planet, intel, with out a doubt.
How times have changed. Intel reminds me of a few lessons I'v learned along the way. I remember a guy who lived next door. He thought I stole his car. He was certain it was yours truly.
I was in boot camp. Nothing is certain in life. It's a matter of structual integrity.
I remain, 40,000@$4.60. I rest my case!
All the wbmw's, all the chipguy's, don't amout to a pisshole in the snowbank.
Jules
