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Politics : Formerly About Advanced Micro Devices
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To: Cory Gault who wrote (94849)2/23/2000 10:53:00 PM
From: Epinephrine   of 1576893
 
RE: <...Outstanding shares...>

Cory,

I have been thinking it through and maybe it would help to not think of buying a share as buying a part of a company but rather of buying a share of the profits.

So if CompanyA is trading for 50$ per share and CompanyB is trading for 100$ per share and they both make the same amount of profit in a given quarter then I can buy twice as much profit from CompanyA for the same amount of investment.(in other words I can buy twice as much money from CompanyA)

I have convinced myself! if AMD makes 43cents per share and Dell makes less than 20cents per share, AMD is by definition a better investment for that quarter since I would have bought twice as much profit had I put my money into AMD. Of course that is only by definition and the real important issue is whether the stock price goes up but I don't think that you can say that the fact that Intel has so many more shares outstanding is a good thing. That is actually a very real negative.

Thanks,

Epineprine
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