DownSouth,
<< LB convinced me some time ago that INTC is not a Gorilla. I have treated it like a King since >>
LB has convinced me of several things, but not that one.
I can not for the life of me see how INTC went from a gorilla to king. There has been no discontinuous innovation to replace theirs in the arena we they achieved the gorilla advantage and participated in recurring tornados (32-bit desktop CPU and motherboard).
The Network Appliance threat has not yet materialized and AMD's recent achievements make AMD (finally) a very successful monkey, rather then sometime Chimp, IMO.
Most certainly we are nearing the end of the latest tornado, and experiencing the "End-of Tornado Corrections" described on page 121 of the RFM, and particularly we are seeing the reaction to a downside surprise (or in this case a warning of same) that results in "lower returns and reduction of CAP".
The end of a tornado does not make a gorilla a king.
It may be time to start looking at a new tornado. It may be time to evaluate whether or not to hold INTC, relative to where they are in the TALC, and to what degree their CAP has been reduced.
Regardless, IMO, INTC is still enjoying the benefits that accrue a gorilla on Main Street and I think the rumors of the death of this silverback are exaggerated.
I sold INTC last fall and bought back this spring. I did sell because I though it was no longer a gorilla, but because over a 5 year period its annual return was lower than the majority of Gorillas and Kings in my portfolio. I bought back because I thought it had a better chance of withstanding the bearish conditions the NAZ was (still is)exhibiting than a few of the shiny pebbles I was playing with.
Immediately upon hearing the earnings warning I considered selling. but decided to hold. If I thought it should be categorized a king I would have sold.
"Semiconductors" comprise 10% of my portfolio collectively. I hold INTC, SNDK, and PMCS, in roughly equal amounts. Individually, these stocks are the smallest holdings of the 10 stocks that comprise my portfolio.
- Eric - |
