<I never understood buy and hold on a risky stocks like intel or amd. It is like asking "shoot me, please". Yes, I do trade them instead.>
Everyone has their own investment style. Clearly buying and holding AMD has been and is a very risky strategy since they have never demonstrated an ability to remain profitable and the stock has not appreciated significantly over the long term. It has been a pure cyclical play. In fact, over the past 5 years AMD is up 0%. I too could never understand a buy and hold strategy for AMD. During the same time INTC is up 418%. I, along with many other long term INTC investors, consider INTC a "sure thing" and about as risk free as it gets in the market if your time horizon is long enough. I'm not talking about over a 6 month period or even a 1 or 2 year period. I am talking about over 3 or 5 or 10 or 20 years. IMO, there are few other stocks (MSFT is another example) that have such a low risk/reward ratio. While you can't understand people buying and holding INTC, many people can't understand trying to time every downturn. Instead, we use downturns as an opportunity to add to our positions. This is what we mean by achieving wealth with INTC.
Although Intel is going through a tough period, things have been much more brutal for Intel's competitors. As I predicted more than two years ago, CYRX on the verge of financial collapse finally had to throw in the towel. Also as I predicted, AMD is now in a similar position. AMD will not survive unless they get outside funding (i.e. unless they get bought out). Unfortunately, I view this as bad for the consumers, the industry, and Intel itself. Competition is a good thing for everyone. AMD's flawed strategy (not their products), however, has brought them to the brink of financial disaster.
Here are AMD's last 8 quarters
96q1= .18
96q2=-.26
96q3=-.28
96q4=-.15
97q1= .09
97q2= .07
97q3=-.22
97q4=-.09
And of course this quarter will also be a big negative. Keep in mind that all of this is during a time when AMD has "supposedly" closed the competitive gap. The numbers speak for themselves.
Oh well, the bottom line is that I agree with half of your original statement. I don't understand why anyone would buy and hold AMD.
Don't be so quick to judge other peoples investment styles. Some people like to trade and time the market. Others prefer to pick quality stocks and hold them while adding to their position. The latter strategy has worked quite well for quality stocks like INTC, MSFT, and CSCO and has required no guesswork and little risk, just patience.
FF |
