Your strategy sounds like Michael Price (Mutual Beacon, etc.) who
believes in "value investing." I agree pretty much with what you
say about AMD for the long-term but I think for the next 6 months to
a year it's not too good. Intel has managed to hold on to the best
profit margins in the business but they can't do that forever unless
they can convince the public and the manufacturers that the higher
prices on their products are really worth the difference. Last year
these types of stocks (Intel and Microsoft) got way ahead of themselves because there are so many first-time investors in the
market and they just know these names are the companies that are going
to be around for a long time. Intel's valuation, if it can protect
its margins, is still fairly reasonable but Microsoft is starting to
feel the heat of the changing marketplace, especially the internet, and does not yet have a proven strategy to dominate the internet. So
even Microsoft, at these prices, is a pretty speculative play. At 57
last year, MSFT was a value play; at these prices around 120, it is a
very expensive stock. I don't feel comfortable trading options and
the like, but if I were going to short one of these, it would definitely be MSFT. AMD has a lot of short-sellers following it too,
but I think that's a dangerous game at these levels unless AMD really
drops the ball and the next quarter is as bad. If the k6 comes out on
time and if it's real application is as good as the benchmark testing,
then it might just give Intel a run. Paul mentioned the ceo's ego,
which I don't think is too important, but he also mentioned that these
people came from the Intel "troika" which is something I didn't know;
that leads me to believe that this ceo should know the same stuff that
the Intel ceo knows (I think he also has a pretty big ego). Paul seems to think that AMD won't make it in the long run, but I haven't
figured out why; all I can figure out from what he says is that he
dislikes the ceo and he's high on Intel, neither of which affects the
long-term outlook for AMD. I asked him a ways back to offer something
concrete as to why he feel that way but, unless I missed it, I haven't
seen a response. |
