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Politics : Formerly About Advanced Micro Devices
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To: tejek who wrote (94920)2/24/2000 9:57:00 AM
From: Epinephrine  Read Replies (2) of 1574508
 
RE: <Cory was responding to hmly's comment that you pay an extra $70 a share to own Intel but you only get $.18 more EPS ($.43 vs $.61). Cory's point is that hmlt is not comparing apples to apples>

Ted,

But isn't that Hmaly's point? if you total up all of Intel's shares then yes they made a bigger profit but each share of Intel is only worth a certain portion of that profit. So if you had 110 dollars to invest, then given yesterdays closing prices, you could buy one share of Intel for a profit stake in the company of 63 cents or with the same money you could buy two shares of AMD (and have about 28 dollars left over) for a total profit stake in AMD of 86 cents.

<Cory's point is that hmlt is not comparing apples to apples>

Why is it not an apples to apples comparison. If a share is analogous to an apple then the AMD apple (share) is just larger than the Intel apple. Or maybe it would be more helpful to think of the companies as the apples and their shares as slices of those apples. AMD has less slices so each slice is a bigger piece of the whole. Yes the Intel apple is much bigger as a whole but it's slices are smaller. So the question is would you rather have a big slice of a small apple or a tiny slice of a huge apple. The real issue is how much apple you get (profit) and if you have 110 dollars to invest then you will get more apple, or profit, by buying AMD (.86 cents vs 63 cents). So isn't Hmaly's point that the money put into Intel would be better spent on AMD on a fundamental basis? (assuming AMD continues current profit levels)

I have only been investing for about two years now and although I have done rather well I am still lacking in much of the fundamental knowledge of markets and market terminology so please point out the flaws in my logic. I would appreciate it greatly.

Thanks,

Epinephrine
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