Read this if you Care about your Money! Don't Despair!!
I think a lot of us intc longs can take some solace from history. On March 4, 1998, after the close, intc warned that it would not meet earnings expectations for the first quarter of 98 citing a 10% revenue shortfall resulting from poor oem turns (in other words compaq, hwp, gtw, dell, etc. were selling fewer computers). Look at an intc graph and you will see the big 10 point drop on March 5, 1998. Interestingly enough Montgomery cut intc from a buy to a hold on March 5, 1998. Other downgrades also were made that and the following day. Analysts were often laughed at and ridiculed on the thread for their "after the fact" brilliance.
A case can be made that in light of some oem warnings and Mason at cpq shooting his mouth off, Montgomery and DLJ and others don't want to repeat their "after the fact" brilliance of last year. And so they've jumped the gun. Remember, at this point intc is fairly steadfast in their position that their guidance remains unchanged. I and others have contacted IR today (See my earlier post in this regard) and nothing has changed as far as intc is concerned. The increased volume at the end of today and the drop in price is directly related to the speculation that a warning is imminent. Has intc IR lied? Maybe, but I doubt it. In any event, don't worry. If intc warns in the next couple of days the price already reflects 90% or more of any warning that may come along. If a warning does not result, other analysts will be emboldened to step up to the plate and reiterate their positive positions on intc and the stock will head north very quickly. Right now many analysts are too gun shy to say one way or the other. So the moral of the story is to sit tight for now. Also, do yourself a favor and look at the intc chart in the last year. You will notice that March 5 drop was recovered very quickly.
Finally, on a humorous note and to emphasize the idiocy of analysts please look at post number 13267 wherein Tom Kurlak makes some predictions in March of 1997 (2 years ago) about intc earnings (9.00 -11.00 per share within 12 months).
Hang Tough and don't let your emotions get the better of you!! |
