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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (121780)	8/4/2000 1:28:09 AM
From: Eric K.	Read Replies (1) \| Respond to of 1586668

Amy-- Re: What was your investment strategy? I'm not really sure I had a "strategy" per se. I'd been investing since high school, but AMD had never really occurred to me as an investing possibility. It started to during the summer of last year. By June, the stocks in my portfolio had reached my targets, and I was looking for new investments. Unfortunately, the only stock in an industry I understood well and with a high expected growth rate at a low price was AMD [edit: there was also NVidia, but long term options were not available on the stock at the time]. I kind of viewed it as a metastasis or metamorphosis story, so options were particularly attractive, since I didn't think the normal distribution assumed in pricing them was a particularly good model for AMD's probable stock action over the next couple of years. I tend to believe in design and quality of engineering over manufacturing or marketing, so I didn't think bankruptcy was a very high probability outcome. I based this primarily on the Athlon design relative to Kx and AMD's higher-priced, higher-reliability flash. I also factored in what I think is Intel's underemphasis on its core business, which has occurred as a result of its former complete dominance of the microprocessor business and, what I consider to be unfocused, expansion policy. I made a list of expected milestones and the requisite earnings calculations, assigned probabilities, and basically determined that too many people had been burned over the last decade and weren't valuing the stock realistically. I also figured that, even if my analysis were wrong, the stock would probably double just based on hype at some point in the next year. My milestones had been fulfilled up until first corporate desktops, which I had pegged at late q2/early q3, 2000, but which looks to not be occurring. Perhaps that was my hint to have sold? I’ve, unfortunately, lost enough over the last few weeks to have covered the ~45% overall state and federal short term cap gains rate to which I would have been subject. In August, I bought January 2001 strike 15 and 30 call options, plus some common, mostly out of guilt at not having any actual ownership stake in the company. I kept about 25% in cash, which I deployed into April 15 call options in late September. I was fairly pleased with the company's performance, but by December, I already had a wonderful return on the options and an okay return on the stock. So, I put my compunctions aside and sold most of my common, which I deployed into strike 60 and strike 70 Jan 2001s in January of this year. So, it's not a very exciting story. I don't like "buy high, sell higher" or "buy garbage because it's cheap," so I didn't really have any other companies I was interested in/acquainted with which I could have bought last summer. I'm not a big fan of posting trades real-time here. I kind of understand why Paul and Elmer have to, since they will be excoriated for opportunity loss if they don't, but I view this more as a company thread than an investment thread (by that, I mean given that the quality of an investment is based in large part on the future results of a company relative to present expectations, you should focus on the company). Then again, I also haven't added to my position in half a year, so this probably affects my apathy towards discussing investment performance or strategies. -Eric