Ted,
Well said. "We agree to disagree". I think both sides make their points, at least to me. Here is my 2 cents.
As an EE who are very much interested in the saga of AMD vs Intel, I wholeheartedly embrace that AMD has been doing a marvelous job in the past year. I was in AMD stock since Jan 99. The state of AMD today exceeds my wildest expectations.
But as an investor, I wish the entire AMD management have the attitude of what Chuck is saying. AMD needs killer instinct when ever it is a bit ahead of its competition. No matter how good AMD is today, it has to have the attitude of relentless pursue of excellence for the sake of its own survival as long as AMD is in the microprocessor business. In reality, AMD still has a large room for improvement.
By the way, an article from TSC:
thestreet.com
Screen for Stamina When the
Market Sprints
By Jon D. Markman
Managing Editor, MSN MoneyCentral
5/3/00 1:24 PM ET
If you're feeling whipsawed and confused at the start of the fifth
month of stock trading this year, let me offer some visual
reorientation.
Imagine that you are in a helicopter flying over an Olympic
marathon. The lead runners have completed the first 40% of the
race, and they are starting to put a lot of distance between
themselves and the rest of the pack. Indeed, as you look
closely through binoculars you notice that a great number of
runners who began swiftly and swelled with pride now lag far
behind.
Now you peer even more closely and notice a curious thing: A
nontrivial number of the runners near the front are wearing the
same colored jersey. Yes, they're from the same country. And
you wonder if it's just a coincidence -- or whether it suggests
that one nation has simply done the best job of preparing its
athletes for victory.
Blink twice now and visualize the stock market. After more than
one-third of the year, it's fair to suggest that the market's
leaders are the ones that are not just strongest -- but probably
also have the most stamina to complete the race ahead. And
that's doubly true if the leaders are largely from a single,
fast-growing sector of the economy, since their staying power is
less likely to be a fluke.
Stocks With Staying Power
I developed a simple screen at the close of trading on May 1
that sought stocks with market capitalization greater than $1
billion that were beating a benchmark, the Nasdaq Composite
Index, for the year. It netted 768 stocks. I then ranked them by
year-to-date return and sorted the top 100 by industrial sector.
The leaders, by a mile, were semiconductor and semiconductor
equipment makers -- they took 29 of the top 100 spots. Second
were communications-equipment makers. Only three biotech
companies made the list, despite the group's blazing start this
year.
If the market behaves as it has in the past, at least a few of the
2000 year-end leaders should be in this pack. And considering
that they have gone through trial-by-fire in the past few weeks,
my guess is that they make unusually strong choices. The top
10 names by this measure are GlobeSpan (GSPN:Nasdaq -
news - boards), Virata (VRTA:Nasdaq - news - boards),
Powerwave Technologies (PWAV:Nasdaq - news - boards),
Rambus (RMBS:Nasdaq - news - boards), Advanced Micro
Devices (AMD:Nasdaq - news - boards), Ballard Power
Systems (BLDP:Nasdaq - news - boards), COR Therapeutics
(CORR:Nasdaq - news - boards), Plug Power (PLUG:Nasdaq -
news - boards), Emcore (EMKR:Nasdaq - news - boards) and
Newport (NEWP:Nasdaq - news - boards).
Just for the sake of science and contrarians, it's only fair to list
the companies with $1 billion market caps that have most
underperformed the benchmark. I captured 936 stocks; of the
worst 100 of these, 28 were Internet firms and 11 were software
makers. The tin-cup 10 in this group: Legato Systems
(LGTOE:Nasdaq - news - boards), VA Linux Systems
(LNUX:Nasdaq - news - boards), FreeMarkets (FMKT:Nasdaq -
news - boards), RedHat (RHAT:Nasdaq - news - boards),
PurchasePro.com (PPRO:Nasdaq - news - boards),
MicroStrategy (MSTR:Nasdaq - news - boards), Ventro
(VNTR:Nasdaq - news - boards), Internet Capital Group
(ICGE:Nasdaq - news - boards), CareInsite (CARI:Nasdaq -
news - boards) and CSK (CSKKY:Nasdaq - news - boards).
The difference between these two sets of names: GlobeSpan
and Virata, for example, both make chips for the DSL (digital
subscriber line) modems that bring low-cost, high-speed Internet
connections to homes and businesses. They're in a proprietary
intellectual-property business with high gross margins and
customers who pay right away. In contrast, Ventro,
FreeMarkets and Internet Capital Group were all caught up in
the recent business-to-business fad. Their uncertain business
plans and unstable customer base gave them a half-life in the
market not much longer than a Super Bowl commercial.
I will follow both lists over the next seven months and report
back on the race's progress.
......
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