Mary:
Regarding your note: <<<James, Joe Arena in the High Tech Arena newsletter date October 17, that you cite, makes a good case for selling his Intel holdings of five years, in May, from a cost basis of $6.
His main points, however, have been discussed ad nauseam on this thread for quite some time now:
1. Increasing competition from AMD, Cyrix, et al.
2. Lower ASP and reduced earnings growth.
3. Future uncertainty in the high end server market due to delays in Merced development. ETC. >>>
First of all, thanks for the thoughtful response. I must admit I don't share his conclusion that now's the time to sell INTC. I am holding and buying on dips. I read his article twice and felt that he was having a hard time coming up with reasons to jump ship. On the other hand, perhaps he simply sees easier money somewhere else...
I remain quite bullish on INTC's long-term prospects. Regarding your points: #1) Competition from AMD/Cyrix, et al. While AMD has made some inroads at the low end I just can't understand how the company can continue to follow its policy of undercutting Intel by 25% on price. They're simply losing money (most quarters, anyway). AMD is going to need awfully deep pockets if they're just doing this for market share. Hence #1 I discount. #2) This one bothers me a bit but let's suffice to say that I'm watching. I do believe, however, that the volume of CPUs being sold will continue to rise at a fast clip for the forseeable (10 years?) future. And I believe that consumers will continue to buy as much processing power as Intel can provide. New, compelling applications will eat up the cycles. #3) The Merced delay is unfortunate but Intel will really reap the rewards. I think Intel is going to dominate the server market. There was a previous note on SI about a 32-processor server by Sequent (?), I believe. Wow - those machines will sell a few processors for Intel.
Anyhow, thanks for your note. Regards.
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