Yaacov,
I've been considering what factors I think are causing the downturn in Intel's price and I came up with these:
1. Disappointment that earnings did not meet or exceed expectations.
2. Concern that 4th quarter will be less than hoped for.
3. Concern that growth is slowing in the pc market.
4. Concerns about growth in Asia and current currency "crisis".
5. Under $1000 computer competitive concerns.
6. Ongoing government investigation of Intel.
7. Overall market decline from August highs.
8. Constant media attention to every analyst's negative opinion.
On the other hand, I strongly belive that the the following factors are being smothered or ignored by all of the attention to the above:
1. US economy has NEVER been in such good shape in my business lifetime - growth is moderate with low inflation, lowest federal deficit in % of GNP in many, many years, productivity growing, technology booming, defense spending way down because of ending of the cold war, interest rates declining, etc, etc.
2. Server mkt is exploding = BIG sales of HIGH MARGIN Intel products.
3. SE Asia Financial "crisis" = tiny overall effect on Intel sales
4. PRC dropping tariffs on computer/electronic products = BIG BUSINESS FOR INTEL.
5. Intel's costs are shrinking as fast or faster than prices.
6. DEC deal = more production and more profit sooner than otherwise.
7. European market is awakening and starting to grow again.
8. High end notebook lack of competition.
In summary, I feel that the stock is currently a bargain and we will all think so as soon as the above factors start to reach the public consciousness. Until then, I am quite satisfied with holding on and only wishing I had some cash to buy more. 120 in April sounds fine with me!
I just walked outside to the pool and read the thermometer. 72 F or 9 C and I'm above 300 meters. Must be the latitude.
The weather here in Jan is variable. Could be in the 90's or 50's and probably will rain some of the time. El Nino promises more this season. So far it's only rained here once since March.
Let me know what you think.
BTW, I will gladly accept all your unsmoked cigars.
Regards,
Barry |
