Wednesday, October 05, 2005 5:07:26 PM
Me...
I bet you would agree, but I've also noticed that I do things quite differently from most investors. Not that such a mythical being is easily categorized. Me, I'm basically a home run hitter, no singles here. It's a strategy I've honed through over 50 years of stock trading.
Anyway, it's not so much a price as a situation that determines when I buy/sell.
When I started buying AMD, from my view, it had a number of problems that needed to be taken care of. Among those was getting a competitive design. They had gone through the k5 fiasco and come out with the k6. It looked pretty good, but needed a better fpu. The real news was the k7 and fab30, which seemed to hold a lot of promise. Since then AMD has progressed to the point where it completely dominates the X86 design high ground in everything but laptops. So AMD has more than fulfilled my expectations in that regard.
Another problem AMD had at the time was a terrible manufacturing process system. AMD had more problems getting chips through the factory than anything else. INTC was heads and shoulders ahead of AMD, but APM and the deal with IBM, along with AMD gathering more experience led to dramatic improvements. Today, at the least AMD and INTC seem to be neck and neck in the process end of things. So AMD has completed another of my check-offs.
Another area AMD was deficient in was capacity. AMD still desperately needs more capacity and market share to be taken seriously by the OEMs and the financial markets. Next year that roadblock should be removed. Of course having the capacity doesn't automatically guarantee it will be used, but given the almost continual drumbeat of new and expanding relationships it seems likely that the capacity will find a home. Still this check-off item remains unresolved.
Another area AMD had immense problems in was marketing. AMD had one product, a desktop consumer PC. I somewhat naively believed that if AMD fleshed out its line-up things would naturally fall in place. Looking back my biggest mistake was underestimating the stranglehold INTC had on the market. Today AMD is competitive in all X86 processor areas and the suit seems to have opened up some markets that were previously closed. So while I can't check this item off I'm pleased with the progress.
The final item was financial. Back when I started investing in AMD it was like a rerun of the Perils of Pauline on a daily basis. A couple of times AMD got so squeezed for cash that it was questionable whether the company would survive. Today while certainly not the moneymaker INTC is, it's doing much better. So this item remains in limbo with a hope that this q will be the one that sees AMD finally achieve financial independence from INTC's shenanigans.
Originally I thought that it would take about 5 years to achieve the above tasks. It's been 7 years now and there are still things to do. But as long as AMD continues to make progress I'll hang in there. So you see for me the time to sell will be when either AMD stops making progress or completes all the tasks and then starts to backslide. I have no idea when either of those things might happen.
Right now the thought of selling doesn't even cross my mind. Things like stop losses can be expensive as big Beta AMD routinely takes big jogs up and down. I don't want to find myself in a position where I'm chasing AMD on one of its' breakaways. In fact this is the time I've been waiting for all these 7 years. To me it still looks like the big pay off is yet to come. As far as I'm concerned all AMD has to do is resolve a few more items on my check-off list.
The capacity, marketing and as a consequence financial items look like they will be resolved in 06. The one thing bothering me is the likelihood of a price war next year as lots of new capacity comes online at both AMD and INTC.
I'm sure this wasn't the answer you wanted, but perhaps someone else may find value in it. As I said I know I'm different.
Recent AMD News
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