bmw
re: Do you have reason to believe that there is something fundamentally wrong with this outside of the current global economy?
you did not need to ask that because you know the answer.
Let's talk about few problems (among many):
* recurring investment expenses: yes, I know that they are not recurring any more and everyone, including John Hull, think that it was a bad idea. For some reason it became a bad idea only when it stopped been in favor of intel. When I brought the subject of recurring investment gains and suggested two choices
1) intel would count them as recurring and but it would have to change it's overall business attitude and be accountable by far more rigorous standards
2) it would leave investment gains alone and possibly even direct the investment toward hedging rather than treating it as a profit source
in my view anything else would be less than wise. Let's disregard that I was attacked for that and called so many thing that I do not care to repeat but concentrate on 2). With a proper hedging in place, intel would not be hurting as bad as it is now. And because intel chose nether 1) nor 2) more people pay attention to investment side of Intel. Let me see, that was a free advice that, if taken seriously, would save Intel billions.
* Now about price war, price war was hurting amd shareholders (me included) but if it would be gaining results then it would be justified. After all, business is business. But there were no signs that price war was gaining any significant market share gains and it did not make competition any weaker. Right opposite, in order to justify expenses at lower prices amd started to look at larger market share that it was originally targeted at. Intel also started capacity build up that added inertia to price-war strategy. Instead of limiting spending intel went on spending spree. Economy goes in cycles and the concept of buying the way out of recession is somewhat naive at best.
* Now we are at next topic, my favorite, capacity or rather overcapacity. Intel started capacity "cold war" with amd. Now both companies are increasing their production capacity without reasonable consideration for actual demand. What is the result of overcapacity?
Now, shall I continue or the point is clear?
Regards
-Albert |
