Amy J. Re: "When INTC has a run up, do you generally keep it in INTC, or do you redistribute a bit of it?" I sympathize with your plight. We've all faced it. This is particularly true given the seasonal swings in Intel's price throughout the years.
Speaking for myself, I've given up worrying about Intel's % in my portfolio. It now approaches 40%. (As a reference I believe that KO represents over 40% of Berkshire-Hathaway's porfolio.) There are a couple of reasons for that. First, I have never lost a moments sleep over Intel, and I've owned it since 1992. Through Pentium flaps, AMD, the PowerPC from Apple, IBM, & Motorola, and Tom Kurlak. Never a moments concern. And that's because for all the challenges they face, it is a superbly run company. But if you get nervous if the price drops from 50 to 25 in six months, then you should reduce the % in your portfolio until you don't worry about the price swings. Second, I have never found a better investment than Intel, so I have never sold any large quantity. Of all the large world class companies, Intel has CONSISTENTLY had the lowest PE relative to its growth rate. And it still does. As Yogi Berra says, "You can look it up." So why sell Intel to buy a stock that is more expensive for the earnings you are buying not just today but long into the future? Ask yourself, "Is there another company that is selling for less compared to their growth rate that will have as big an impact on the future of the information age?" I have not found one. If you have one, wire me collect.
Sometimes Intel starts to look "expensive". Be warned: that's usually because the analysts are overly conservative about their earnings estimates. When Intel hits a bump, they run for the exits and trash the earnings estimates. By the time they realize their error, the price has run up, and they can say, "Gee we were wrong, but don't chase the stock at these prices." Thanx.
That said, you may want to take advantage of periodic fire sales on Intel shares. Then you can add to your core portfolio a "trading" block. I purchased a few shares a couple of months ago at 52 and just sold them. This is my revenge against all the analyst idiots who periodically shout, "The sky is falling" ala Tom Kurlak and Dan Niles. I just can't help making money off these idiots.
Hope this helps.
HL |
