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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 231.83+1.7%Jan 16 9:30 AM EST

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To: Windsock who wrote (79088)5/2/2002 11:30:38 AM
From: chomolungmaRead Replies (1) of 275872
 
Intel has generated profits quarter after quarter, year after year. AMD has lost money in 6 of the last 7 years.

Remember the "Japanese Model" that was all the rage a dozen years ago? The way it worked, supposedly, was that the Japanese manufacturers would sacrifice profits in the near term to build market share. This was heralded as the "new paradigm" for capitalism due to its long range thinking. The problem was that many of those companies NEVER made any money. The Japanese hid behind a booming stock market that supplied easy capital that let these "innovators" run losses. Once that capital spigot was turned off, the lack of profitability was telling and the growth stopped.

AMD seems to think that they can continue to run losses and build a strong company. Sooner or later this model will fail because profits are what will provide capital for expansion and development. You can't say, "wait til next season" forever - unless, of course you're the Cubs.
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