We all have to make our own decisions as what strategies we are going to use, but I repeat that I see no compelling reason to alter my decision to remain invested in Intel.
Bruce, I suppose that if all you're looking for is 15% or so long-term growth, it's very unlikely that Intel will let you down, even if it continues to lose market share. It's brand power, its sales and marketing clout, and the conservative nature of corporate IT purchases should put a limit on any bleeding it may have in the near future. In that sense, Intel isn't a bad investment by any stretch of the imagination.
However, there is one point I'd like to bring up. Like you, I try to keep a highly diversified investment portfolio, albeit not quite as diversified as yours (I think that I'm invested in 31 companies right now, with no company taking up more than 7%). One of the criterias I've always had for my portfolio is a fixed long-term growth estimate for all companies that are in there, with only companies that meet or exceed that growth estimate being allowed in. When I started with such an approach, my limit was 30%. Then it went to 35%. Then 45%. Right now I look for at least 58% (10x in five years).
You'd figure, with this tech boom having gone on for so long, that by now, it would be winding down, and most companies would be seeing much slower growth. While the PC/corporate networking boom has slowed down tremendously, as we all know, it's quickly being made up for by the data networking, networked storage, mobile wireless, and internet applications/services booms. As data has eclipsed voice as a percentage of long-haul network traffic, and as the internet has pumped fresh blood into the storage industry, both for enterprises and data centers, the giants in the networking equipment and storage industries are actually seeing accelerating growth. Meanwhile, while most of the leaders in the PC/corporate networking fields are quite established, these growth industries have a ton of "young giants" in them, companies that have the potential to not only grow with their industry, but to grow a lot thanks to increased market share.
The point of all of this is that thanks to this boom, you can find a far greater number of solid, reputable companies for just about whatever "growth limit" you chose (within reason, of course). Thus tech investors can potentially increase the growth they expect out of companies they put their money into, all the while keeping their risk profile steady. It's really amazing, when you think about it, and is a testament to the fact that this boom isn't merely another speculative bubble.
Anyway, I'm sure that you can connect the dots from here, so I won't preach to you any longer. Good luck with whatever investment decisions you chose to make.
Eric
PS - For the time being, I'm not sure if the GE analogy is a correct one. Intel still depends on its microprocessor/motherboard chipset division for all of its profits (see intc.com. Last quarter, "all other" reported an $849 million loss. |
