Re: But as of your 3 months worth of posts, since you did not put up any money to back up your ominous warnings, how can anyone take anything you post seriously? This is an investment forum. It is called InvestorsHub.
Joe, I believe now what I said then: to look for a good place to sell. I, too, am looking for a top, so I can buy some puts, and I intend to do that when the irrational exuberance runs out, as I believe it will. Your logic is contradictory if you are suggesting I should have gone in before it hits a top, because that is not the advice that I gave.
If you want to get serious for a moment, instead of resorting to finger pointing, let's paint a scenario.
Most stocks are priced to lead expected earnings, and we as investors have figured out how to anticipate a stock well in advance. Typically, the rest of the market pretty much gets the right idea all at once, but this is not what happened to AMD. Rather, they had a strong product line throughout 2004 and 2005, posted several quarters of excellent profits, and the stock did nothing. But now that Intel is challenging them in upcoming products, investors have all of a sudden decided to reward AMD for past performance.
I think it's a case of the investment community being late to the game. They were late to realize Opteron's benefits, the lift in ASPs that AMD has received in their volume markets, and their ability to ramp their current factories to take advantage of all the demand. If Intel were out of the equation, then even I would say the stock price deserves to be where it is, if not higher, as a reward for this performance.
But, as investors were late to reward AMD, I think they will be late to punish them as well. I don't see how AMD can continue their inroads when Intel has more competitive products, a new marketing campaign, and a much more shrewd and capable CEO at the helm. AMD's new factory is coming online, and they absolutely need the demand to stay strong to fill it with product. However, if Intel comes back strong and delivers to the market instead, AMD will be left with overcapacity. They prefer to turn it around in their analysts conferences and claim that Intel will be the one with overcapacity, but in the end we know it will surely be someone.
And if that someone ends up being AMD as I believe it will, their profits will tank, investors will feel cheated, and the stock will plummet. And even in the best case, if AMD fills their new factory, what will it take to get there? Lower ASPs? Most assuredly, but how low? Intel will have the capacity and the cost advantages to lower their prices, and with all the market share gains AMD has made, they hardly have a reason to cry monopoly in response.
Next year will be a make a break year from them. I may not have the predictive powers of Nostradomis, but I still believe in the fundamentals that made me make my initial prediction, and I intend to put my money where my mouth is later this year. This is an investment forum, after all.
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