"Surprised to hear you giving some credit to Wintel at last!"
Sam, I do not know where you get the idea that I don't give credit where it is due. Perhaps you have so much emotional attachment to Intel that anybody who has some thing negative to say about your favorite stock is completely biased. <g>
Here is my stand on Wintel investment: I am partly an investor and partly a trader (I am trying to rediscover myself in each of these terms, but in vein.) I know you are a long term investor. One straight question to you: if you don't already own intel, would you put your life savings in to intel stock at these prices? I DON'T. In fact, when I first included Microsoft in Mohan's List (May 1996) on Prodigy, it was at 105, trying to re-test it's 1995 peak. Then I called for $200 by 1998. After adjusting for the split, it is there already. I am not willing to pay tomorrow's price today and hence I have gone negative on Microsoft, the stock! (I have a ton of April 85 puts on Microsoft.)
If Intel reached next two years' price today, you could say either a) it is overvalued by historical standards or b) this time it is different and the market is ready to give higher multiples for the stock. With (a) you go short, with (b) you buy more or if you are a long term investor you stay put. I am going with (a) on Microsoft. Another question for you: Will you buy Microsoft stock at $100, a trailing PE of 56 with an expected earnings growth rate of 30%?
Simply stated, both Intel and Microsoft have become sure things for many investors, especially in the last 4 months. When some thing becomes a sure thing, my readings told me to avoid it. I go one step further with my judgment, I bought puts - not for a home run but for a favorable in the down direction.
I know you have given me some reasons like "quality" and "liquidity" etc. etc. All that flock to quality and liquidity at any price have indicated market tops in the past. I don't think I know better enough to even think that this time it will be different. I would rather go with history.
BTW, my favorite quote is "never have emotional attachment to any stock." Currently Stanford Telecomm is my largest holding. I try not to get overly emotional when it goes up or feel dejected when it goes down. If some gives me a strong enough reason to reconsider the investment in STII, which I did not think about, I will difinitely consider another opinion. I hope I am clear on my position.
Namaste.
-Mohan |
