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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: wanna_bmw who wrote (151315)	12/6/2001 12:26:25 PM
From: f.simons	Read Replies (1) \| Respond to of 186894

Re: Dan3 and Ali like to think of Intel throwing dollar bills into the wind, with no visible benefit, but I'm sure you know that businesses don't operate like that. Wanna- Oh, I don't know about that. Didn't Dan post that AMD had poured huge amounts of money into Gresham? Frank

To: wanna_bmw who wrote (151315)	12/6/2001 1:00:13 PM
From: AK2004	Read Replies (1) \| Respond to of 186894

bmw re: so I suppose your concern over this depends on your definition and valuation of the term "risk". The point is not that the companies take risks but rather that they are consistent in their risk preferences. In an ideal case the value of the company is a present value of it's distributable earnings. In risk neutral world one would use risk free (treasury) rate to discount those in order to get that present value (minor note: one can not just take expected cash flow and discount it since the performance is interest rate dependant). It is very hard to quantify risk premiums but it is easy to identify the direction of changes and hence potential impact on the value. re: While Ali may now argue whether it should be counted in terms of earnings over cash flow, the fact is that it is accounted for, and legally. In formal accounting ( I am not an expert ) you are probably right. I think that Ali's point was not that the earnings are legal but rather that the repurchased shares should be offset by liabilities (incentive plans). It is really a question about inclusion of incentive plans in calculations of earnings rather than repurchase cost. re: it would be foolish to assume that they aren't getting some kind of return for this investment. The benefit is not the return but rather "artificial" increase in market demand. It is valuable because of smoothed fluctuation in price behavior. The question is though at what point the cost would exceed the benefit. re: It's nice to see that your mastery of English has suddenly much improved finally, after 21 years in this country :-)) Regards -Albert