jules, as happens often in this world when the crowd is screaming plaintively about the irrationality of some event , there is perhaps another better explanation which few have considered, and perhaps the explanation so many find unacceptable is, indeed, unacceptable.
in my view what is happenning to intel is exactly what happenned to coms, cscc, asnd, usrx, csco, fore, etc. it has little to do with a company's fundamentals. it has to do with growth fund managers believing that the only way to keep up with the joneses was to stay nearly fully invested.
now as fund inflows collapse and even reverse in some cases, the money is not there to prop up the sacred cows when volatility strikes in the wrong direction. the gargantuan beasts which could do no wrong and which absorbed such a disproportionate amount of growth funds' monies, are now seen as the biggest danger -- precisely because those most invested in these beasts KNOW who else is in these beasts in quantity in a highly liquid way! and they know that these guys, like themselves, are prisoners of the unpredictability of the maddenning crowd!
sure, intc might stage a massive rally on earnings - i personally believe that it will. but the medium-term is much less certain and i am staying far away from any stock these growth fund idiots have sunk massively disproportionate amounts of their capital into. including intc msft and csco.
it aint about fundamentals. it's about a big house of cards come a crumbling down. doesn't matter that that house deserved to have been built with a much more solid foundation. |
