Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 221.42

-0.1%

Dec 10 3:59 PM EST

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To: Sarmad Y. Hermiz who wrote (245516)	1/5/2008 3:02:36 PM
From: b4dt4ste	Read Replies (1) of 275872

OK, think back to two years ago; January '06. Intel had just reported record revenues. Price was 26.xx. Next few months INTC dropped to under 17. What was the cause ? Revenue/margin slowdown caused by excess inventory. As I recall, Intel missed their earnings in Jan 2006 because of AMD. INTC tanked to ~$20 while AMD rose to $40 in Jan-Feb 2006. That happened before INTC previewed their C2Ds during the IDF in March 2006. However, I agree with you that this time INTC is in a much better position, which makes the recent sell-off seem irrational. Since I expect the strong support level at $20 to hold, I am picking up shares (and calls & writing puts) and will be averaging into the sell-off. I believe that good tech stocks sometimes get sold off irrationally. Look at NVDA -- it tanked from a high of ~$21 in Apr 2006 to ~$11 (about half) in July 2006, only to rise again to $26 a few months later. Now it is at ~$30. In other words, this large-cap stock first drops to half in 3 months and then bounces back a few months later --- think of how much money one can make with the use of options?

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