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Technology Stocks : INTEL TRADER
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To: Harald Beck who wrote (1556)12/17/1997 7:01:00 AM
From: Jurgen Trautmann  Read Replies (1) of 11051
 
Harald, put-premiums are high cause you have lots of V

investors having gone long in INTC - it's like an insurance.
Of course that's actually misunderstanding how you can earn something on stock-markets for yourself or for option-fees.

Most investors know the old rule, that you must buy in dips and sell when your stocks have gone up. But also most investors do the contrary - they buy in rallys and sell in dips. Thanks of this trick they achieve their "results" far below indices. (Only a few private investors and a hand full mm's beat indices)

Intel was moving between 63 and 102 during the last 52 weeks, now - staying at 71 - it has a huge upsite-potential.

Usually a fair P/E is assumed in a region of the expected growing for the coming year. Intels recent P/E is 18. The lowest analysts estimate for 97 results in 29% growing.

This year was a year of transitions. Such transitions were always critical for Intel, cause new products are not available in sufficient numbers and old products have found clone-competition. The coming year is not a transition-period - usually Intel could surprise in such years, far away above analysts estimates. One should never forget, that Intel sells sand, has production-costs of about $10 and 1000-pcs-oem-prices of ~$150-~$1500.

Recent estimates for 98 put Intel on a lower range than PC-market (!). Following IDC market will increase 15% worldwide and 21% in US.
Intels average-growing was about 40% during last 5 years.

You see, I don't predict the future. However, I hold about 120 calls of Intel at different strikes/expiring-data. As you mentioned - we'll see. Thank you for your good wishes! ;)

Jury

PS: (a last hint) After todays mini-rally you will be able to buy Intel-puts at substantially lower rates...
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