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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Joe NYC who wrote (33962)	3/28/2001 3:03:53 PM
From: bacchus_ii	Respond to of 275872

RE Kash :They are madly ramping 0.13 in several BRAND SPANKING new FABS. And spending BILLIONS while they are at it. They are essentially betting Intels leadership position in processors on this ramp. It would be foolish however to count them out. But the heat is definately on them!!! RE Joe : God observations. It is interesting to note a slight shifting of the roles (not a complete role reversal yet): In the past there was company that was making solid bucks on the bread and butter products, while another company was always seen betting the farm on the next pie in the sky project. I saw this more macroscopic view of the challenged Intel in this post: Message 15565978 Value Investing Question There is a reason why Buffet won't buy into the New New Thing. It's because it usually has no chance of becoming a sustainably profitable business which creates real sareholder value. Very few tech companies throw off free cash because they are hopelessly trapped in a game where to survive the company must pump all cash flow into cap-ex; not doing so would cause the company to fall behind the curve. In reality, most tech companies are bad investments; they can be quite profitable speculations, but that is not the same as an investment. This is where Gorilla advantages come into play. Gorillas have established themselves to the point where their competitive advantages allow them to create large free cash flow. We really don't know how long this is sustainable, though, and I feel Intel and Microsoft over the next couple of years will show us just how long a Gorilla can grow free cash flow before it needs to more heavily recycle its cash flow into its business in order to stay ahead of the competition. There is already some signs that Intel is hitting a brick wall and is now growing cap ex faster than revenues (the opposite of what a Gorilla in its prime, IMO, should be doing). Gottfried