OK, its confession time.
I'm well known on this thread, and an avowed Intel bull, but I sold everything yesterday at 76 because I think it will go lower, and I've earned too many frequent flyer points in the past year (that is, I have made too many round trips).
Now, before you think I've changed my colors completely, I expect Intel to hit 100, split, and hit 100 again within 3 years or so. But I expect it to be in the 60's or lower before that happens.
We are in the second week of March. In the next three weeks, there are going to be a ton of earnings warnings. We've already had Intel, AMD, Motorola, CompUSA and now Compaq, but there are a bunch more coming, almost all of the warnings that will occur will occur in the next three weeks.
Beyond that, all of the estimates for 1998 are being lowered to $3.xx, and I kind of agree with the guy who noted that Intel doesn't spend much time with P/E's above 20, and 20 x $3.xx is mostly less than 76.
I felt pretty sick most of the day, and I'm having REAL problems with what I did (I freely admit to being too involved with this stock to be completely rational about it). But with the Compaq announcement of a $1 Billion inventory problem after the bell, things might look a lot different on Monday.
Now I know that the rumors that we heard last week about Compaq cancelling a big Intel order were probably true, and PROBABLY were even a factor in Intel's warnings. Now I THINK we can also conclude that they had nothing to do with AMD, unlike last week when it looked like the Compaq cancellation rumor and the AMD-IBM production pact might be somehow related.
Anyway, Monday is another day, and a day or two is not enough to judge the wisdom of any investment decision. I expect to be back into Intel soon, one way or another, and to remain a {long term} Intel bull, but for the moment I'm posting from the sidelines, 100% in cash. |
