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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 231.11-0.3%2:35 PM EST
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To: cfimx who wrote (226614)2/22/2007 1:39:36 AM
From: PetzRead Replies (4) of 275872
 
re: Warren Buffett does not care how much market share he has in insurance. He cares how much Money he makes in insurance.

That's baloney. I'm sure Buffet suffered huge losses because of Katrina. Did Berkshire Hathaway cease doing reinsurance for companies with a lot of Gulf business? No, I suspect he
1. raised rates less than most other companies, because he knew he could afford it and weaker competitors would instead capitulate
2. he might even have acquired some money-losing insurance operations centered in that area, because he saw a long term advantage and he could buy market share by buying these money-losing operations.

(PS, I am by no means an expert on Berkshire Hathaway, but these two points just illustrate that protecting against short-term losses is not always the best policy.)

If you're confident about your future products, it's better to lose a little money for a short time, than to lose a lot of customers forever. If you are not so confident, it's better to target niche markets.

In AMD's case achieving 30% market share is highly desirable because that level of sales almost makes "first dollar rebates" impractical. I notice that the first part of the CPU market where AMD is targeting that level is server CPU's, because in two and four socket systems, Barcelona will be king of the hill.

Petz
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