Dave,
How do you mean "hedge" with Intel shares? If you mean going long INTC & holding AMD, I don't think you are hedging, I think you are exposing yourself to additional market risk. Once yesterdays information is priced into AMD, it should start to trade in concert with Intel again.
I think AMD should find it's proper level, based on the information from yesterday, pretty quickly. Probably next week. I don't expect it to go up in the next few trading days, do you? You might want to sell now and buy back next week, if you think the longer term prospects are good.
A good short term hedge would have been to buys some AMD puts yesterday. The April 15's were only ~.40, for about 2.5% you could have protected yourself almost dollar for dollar. Easy to say this morning.
As far as Intel, I think it will perform with the $SOX. If you look at the $SOX, it's been essentially flat since December 2000 (with the 9/11 interruption). - stockcharts.com[w,a]waolyyay[pb50!b200][vc60][iUp14,3,3]&pref=G - I expect a cyclical recovery pretty soon, when I don't know. I thought it would have started by now, so my opinion is probably worth what you just paid for it.
John |
