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Technology Stocks : Intel Corporation (INTC)
INTC 36.20+0.1%Dec 26 9:30 AM EST

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To: Elmer who wrote (156794)1/24/2002 10:31:04 PM
From: Joe NYC  Read Replies (2) of 186894
 
Elmer,

I say AMD has terrible yields and they lose money on each low yielding wafer they start. Start fewer wafers, lose less money.

I guess you never took Economics 101. They cover concepts of fixed and variable costs.

If you did, I would suggest this exercise. Look at the financial statements just released. Try to estimate what the fixed costs are. Compared this number with $15 million loss. If the fixed costs are higher than $15 million loss, it means that variable costs are lower than revenues, meaning producing more increases the variable income from which the fixed expenses need to be subtracted to reach final income/loss figure.

This exercise is a complete non-brainer, since just the executive salaries alone (more or less a definition of one of the fixed costs) surpasses the loss. This is just to start. Add 161 million R&D to fixed costs etc. You get the point.

Joe
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