I'm going to give a longwinded answer to your question.
I first bought Intel for my wife's IRA in 1983. I had done
business with them and decided that they had great people,
great attitude, great products and great leadership. BUT
I was unhappy that they were already a big company and there
would be modest growth from that point forward. We still
have those shares.
A year ago, when INTC dropped into the low 50s I decided that
it was decidedly undervalued. There appeared to be almost no
downside risk, the PC was causing a new industrial revolution,
they had no serious competition and Windows NT was coming which
would stimulate a whole new round of business upgrades. I also
knew about MMX coming. So I concluded that adding to my INTC
position was a pretty safe bet, but I did worry about how they
could grow at that size.
Which brings us to today. All I can say is to look forward 5
years, think what the world will be like and whether that
prospective environment will spell good fortune for Intel
and its stockholders. As someone posted recently, you may
buy INTC at the wrong price but you're never buying the
wrong company.
Having said that, I still watch Intel like a hawk and remain
aware of its business and competitive environment. The only
caution I would make is that Intel is best played (IMHO) as
a long term investment. There are nimble traders who move into
INTC and it's derivatives daily and on both the long and short
sides as the immediate circumstances warrent. I have neither
the temperament or the inclination to be a trader.
One final point. About a year ago I looked at MicroSoft and
concluded that their business prospects also looked pretty
promising. But I choked on their PE. Since then they have
more than doubled.
I find it hard to take the emotion out of investing. I commit
to stocks like a marriage. I look for something that I can
be happy with for the foreseeable future.
I don't know if I've answered your question but those are
some of my thoughts. Of course, the best thing to do is to
your own (or your friend doing their own) in depth research to
decide on whether they want to "marry" Intel.
Good luck and good investing,
Burt |
