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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Fred Fahmy who wrote (73411)	1/12/2000 11:27:00 PM
From: Skeeter Bug	Respond to of 132070

ff, new paradigmers refer to your value model as pseudo-heretical. my style is pseudo-heretical minus the pseudo. ;-) good luck.

To: Fred Fahmy who wrote (73411)	1/12/2000 11:45:00 PM
From: Earlie	Read Replies (4) \| Respond to of 132070

To Earlie from Earlie: A modest addition to the current musing on INTC. - In every independent test that I have read where Intel's latest micros have been run side-by-side in competition with AMD's Athlon, the latter kicked the former's backside but good. - Friends within Intel's engineering ranks have frankly admitted to me that the current round of shrink under development is going to be "it" for a considerable time to come. - Intel's credibility among the box makers took a real pounding this past Fall when the long overdue Rambus chip sets were finally delivered,...... and didn't work properly. - Most of the more knowledgeable types out in the field believe that Intel extruded an egg with their backing of Rambus, especially given the remarkable but very visible advances made by the DDR producers. Personally, I cannot see any way out for Intel at this juncture, except via a "backing away" from RMBS, either quietly or publicly. Perhaps this will come when Intel has sold a good part of its RMBS stock holdings. It sure has been expensive for Intel to try to bribe the memory gang into participating in Rambus. The only return possible on that big "investment" relates to the sale of RMBS stock. - Perhaps it is the fact that at my age, the memory gets hazy, but I can't remember the last true innovation to come out of Intel,.... and I've followed the company for a fair amount of time. - No matter how one cuts it, the simple reality is that INTC USED TO BE a decent growth company (annual revenues rose routinely well up in double digit territory, as did the bottom line), but its stock was not provided much of a growth multiple,... and for good reason,....investors back then recognized that the company operates within a very cyclical business. Over the last few years, Intel's growth rate has stagnated dramatically and the company has resorted to accounting chicanery and the truly insane practice of buying back its own stock to artificially maintain a semblance of reasonable earnings. Wondrously, the company's PE has gone ballistic even as the growth stagnated. Mania perhaps? - A short while ago, Intel was a monopoly. Today, it is not,.... in fact it is involved in a vicious price war which it is definitely NOT winning. It has been reduced to battling solely on price since its main competitor has surged ahead on technical merit. Hard to fathom the PE bulge, except in mania terms. - While the company has been busy buying stakes in other tech companies, Intel will live or die in the micro arena. Micros are sold primarily into a SINGLE, narrow sector, which is unfortunately fully commoditized, more or less saturated and no longer a growth area. What leaves me stunned is the fact that for well over two years, the shrinking growth within the PC market has been extremely well documented. - The company has worked diligently and successfully to manage Wall Street's expectations to much lower levels, but this is hardly the stuff of which enduring expanded PEs are based. - The company is massively exposed (as a result of its extensive manufacturing assets) to ANY slowing of the single industry it depends upon for sales, the PC industry. Even a perfunctory glance at the last two year's worth of stats from the PC industry ought to be cause for reduced, not expanded PEs. - A delicious source of high margin revenues has also been removed, courtesy of the SEC. No more big sales of put options, the premiums from which used to flow directly to Intel's bottom line. Now over to the other side for a review of all those things that have gone so wondrously well over the last two years, and that have provided a logical basis for the runup in the stock price. Best, Earlie