Replies to post #127892 on Intel Corp (INTC)

[techno_bull]

If they are so smart, then why can't they make money the old-fashioned way - by working for it instead of screwing someone out of it?

They do work for it. It's very hard work to figure out how to walk that fine line of 'legality' and screw people out of their money. It takes meticulous study and execution to do it well and keep the SEC at bay.

And if they are so smart why do they get caught so often?

'So often' is relative. Wall Street investment banks are 'robbing' corporate America and individual investors on a regular basis and only getting caught once in a while. Only when they make an error that crosses over the line of legality do er ever hear about it.

Intelligence doesn't seem to their leading characteristic.

Disagree. Imagine Wall Street's teams of financial 'engineers' just like the semi industry's EE's and software engineers except their job is figure out strategies for separating other people from their money. You don't think that takes intelligence? Probably more intelligence than engineering work since their targets tend to keep a death grip on their money.

The complete lack of moral and ethical fiber seems to be their defining trait.

No argument there.

As for willco's original point: That is - How does his employer make money from clearly wrong prognostications?

I think what he is eluding to is also what I have often said about GS strategy to milk INTC for the steady stream of income that it provides by selling (shorting) large blocks of put and call options in the open market. This has been a successful strategy for years with this stock. But to make it work you need a stock that won't 'run away' from you either to the upside or the downside. Enter James Covello. Having a ridiculously low target price and perpetuating his bearish sentiment helps keep INTC range bound and makes it the perfect stock to execute their strategy. Of course Intel itself helps the strategy by delivering earnings that are always a penny up or down from consensus estimates so they don't move the needle much either. And whenever the strategy has been threatened (i.e. upgrades by other analysts etc.) out trots James Covello at a key time to re-affirm his call and keep his foot firmly on the neck of INTC price movement. This strategy wouldn't work if it was some small time investment bank in New Jersey or something. But this is GS and GS calls really are able to move the needle when they make or change a call. For good or bad (mostly bad) they are highly influential in the markets. We will all see this when one of these days GS decides to abandon this cash cow strategy for a new strategy that relies on stock price appreciation for INTC. It's not going to happen anytime soon though. This strategy will be implemented when they decide that Intel is capable of beating EPS estimates for 4-6 quarters in a row.