Yaacov,
Paul was being sarcastic and you did not pick it up. That may be do to a slight lack of familiarity with his style of writing. If someone says that Intel is a great short sale, he usually writes back saying that you should mortgage your house and bet the farm on an Intel short. He doesn't really mean that, he is just pointing out how silly some of the pronouncements are. If you have followed his detailed account of the forthcoming developments in Intel, it is clear that he believes that a great many innovative and creative things are coming down the road.
That having been said, absolutely nobody can predict what the short term price movements of individual stocks or the market in general will be for a variety of reasons. Shock events like currency devaluations, war, panic selling, panic buying all distort the price of equities from a reasonable value. If that didn't happen, the DOW would usually move in fractions of a point. What many believe is that the long term outlook can be discerned (or at least a high likelihood of the long term outlook) and on that basis they place their bets. Thats called investing and it involves a long term outlook, patience and careful monitoring to see if anything has really changed.
Almost two years ago Intel stock was way down. I reasoned that there was virtually no downside risk and large upside potential. I made my bet and Intel promptly fell about 10 points (20% back then - presplit). I kept checking this thread for any sign that I had misjudged the fundamentals. I concluded that the market price was unrealistically low and that the market was wrong to value Intel so low. At that time, the spin was that PC sales were slowing and the market was saturated. Sound familiar? Do you think that Intel will sit idly by and abandon the low end of the PC market? I don't, but if they did make that decision it would be a carefully calculated decision based on what makes good business sense for Intel.
Finally, I have learned to not invest in any company that I do not have strong reasons to believe is well managed, has a leadership position in its field, has some edge that is difficult to duplicate and has strong growth potential. If the meets those criteria I buy and hold. If it doesn't I stand clear.
Shalom,
Burt |
