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Technology Stocks : Intel Corporation (INTC)
INTC 35.78+3.7%10:59 AM EST
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To: Dan3 who wrote (87542)9/1/1999 10:24:00 AM
From: Robert Douglas  Read Replies (2) of 186894
 
Dan,

Thanks for your contribution and the civil discussion.

You wrote:

No argument here, Intel is an absolute machine. But AMD has done some impressive work recently, and is valued at about one percent of what Intel is.

This can be a dangerous logic to use in investing. Once in a while the challenger topples the champ. We all have visions of young American hockey players beating the favored Russians in 1980. But when it comes to investing I think another sports comparison is better.

How much more is Michael Jordan "worth" to a team than the 12th man on the team that scores 3 points a game? If Jordan averages 30 points a game, should the 12th man be worth one tenth what Jordan is worth? That of course is ridiculous and no NBA general manager would accept that logic. Jordan is one of the few players that can win a championship virtually by himself. This is the currency by which value is determined. In the stock market the important thing is profits. AMD hasn't been able to accomplish this and it is no certainty that they will ever reach the volumes to do so, and almost certainly not the profitability levels on INTC, even if Athlon is PIII's equal.

Remember in my NBA example that Mr. 12th man is one of the best basketball players in the world. In sports being in the top 1% gets you nothing. You need to be the top. Intel is the tops and in my opinion is worth 100 times AMD.
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