Sarmad, the move toward gold is a guard against inflation and a hedge against stagflation, both of which are very likely in two to four years.
There are a lot of factors determining the price of INTC, most of which are outside of Intel's control. There are three factors which I am most concerned about:
- The survival of AMD, which continues to put downward pressure on INTC's profit margins. As Mas loves to remind us, there are world powers who have a vested interest in keeping AMD around. And AMD is learning very quickly how to play politics.
- Increases in capital gains taxes, which will encourage more investor to move their capital out of stocks and equities.
- The general public trust in Wall Street, which is required for stocks to rally once again. Right now that's shaken to the core, and it doesn't take a genius to figure out that restoring it isn't high on Obama's list of priorities (despite what he says).
That's a lot of risk there. At least Intel's product portfolio is the strongest I've seen in years, but that factor is not a concern to me. In fact, it's just one of many factors that will affect whether we'll see P/E ratios of 20 once again.
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