Doug,
>>>Anyway, the main mindset with the analysts now is that Intel's ASP's are deteiroating and it appears they think they won't get too much better any time soon. This is what I would like to try and figure out. When is Intel going to be able to surprise the street and increase earnings so I can stop selling coverd calls.<<<
Valuations, I am convinced, are not completely empirical processes. Much of it is irrational and a lot of it is subjective. Why should MSFT be valued at 46X earnings, QCOM 59X earnings, QUAL 233x earnings and INTC at 21X earnings?
Most participants on this thread are engineers of some sort and are looking for some exotic formulae to plug the numbers into. I just don't think Tom Kurlak has any empirical basis for his valuations. He just plays the game. Of course Intel engineers are ultimately to be blamed for this sorry state of affairs. They just don't get it. They allow Tom Kurlak to play his game. They (Intel) don't give analysts the kind of guidance they should be getting.
Intel must control analysts thinking. Making sure that analyst estimates are beaten quarter after quarter. That is the way the game is played.
For an example of how this game is played, just read (or research if you must) how Roberto Goisueta kept Coca Cola (marketers of sugar water) valuations at such lofty levels. He took seriously analyst covering his company - making sure they understood what he wanted them to understand. If they didn't understand it, he would go to their bosses at the CEO level to make sure what needs to be understood.
After all, in Intel, we are talking about one of the most successful and most profitable companies (ever) on the face of this earth.
But, to be realistic, Andy Grove is going to be Andy Grove. He is never going to understand this (the control of analyst thinking). If anything, Andy would be confrontational and p*ssoff those that he needs to engage, coopt, and manipulate. (This is not to say that Andy Grove is not a great man and did great things for Intel). In this area, Andy Grove is a disaster.
It is really up to Craig Barrett to step up to the plate and protect sharehorder interests. This will happen. Only I don't know when.
Mary
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