Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Amy J who wrote (167131)	6/26/2002 7:14:15 AM
From: John F. Dowd	Read Replies (2) \| Respond to of 186894

Amy: Thank you. What war? This terrorism thing? It is not going to end and neither is the Palestinian thing going to be settled anytime son. We have always had this problem and it doesn't matter who was president the problem always existed. This whole thing is a matter of confidence. Investor confidence and business exec. confidence. Execs don't wan't to spend because they don't have the excess cash/profits to reinvest and the investor confidence has been shaken by the NAZ going from 5300 to near (today) 1300's. That is a huge haircut and that generation that had always done well by buying the dipd cannot see over the rim of this dip. Hard to say what will bring us out of it. Fear is a paralyzing thing but if don't shake the world will be in a mess economically because as the old saw goes when the US gets a cold the rest of the world gets pneumonia. As for INTC I bought into it at 15x earnings in 1992. Trouble is INTC keeps reducing EPS expectations so no one knows what the PE is going to be.JFD

To: Amy J who wrote (167131)	6/26/2002 11:09:00 AM
From: Yousef	Read Replies (1) \| Respond to of 186894

Amy, Re: "I wonder what happened in 1974? ... Was this when Intel was having issues against Japanese firms in memory?" No, I believe this happened in the mid-80's (~1985). This was when Japan was near its "zenith" and all American firms were trying to copy their management practices. (anyone remember "quality circles"?) Make It So, Yousef

To: Amy J who wrote (167131)	6/26/2002 1:31:26 PM
From: tcmay	Read Replies (3) \| Respond to of 186894

[LONG] Booms and Busts "I wonder what happened in 1974? Wasn't that when the USA was involved with the Middle East crisis, shortly before inflation kicked in? Was this when Intel was having issues against Japanese firms in memory? " No to Mideast. No to Japanese firms. Partial yes to inflation issues. Real estate was beginning its first big surge (nationwide, mostly, not just in Calfornia). News was calm in the Mideast, despite the war six months earlier. There had been some gas lines during the oil embargo, but the ongoing recession was not, in my opinion, directly caused by this. (In fact, 1969-71 had seen a similar recession, and all of the years of the early 70s were semi-recession years.) The Japanese were nowhere to be seen. I started with Intel on Monday, June 24, 1974. We had Thursday and Friday, July 4th and 5th, off. But the markets were open on July 5th. I hadn't looked at the stock prices (didn't own any stock at that point). Sunday night, July 7th, my girlfriend was reading the business section of the Sunday paper and called me over to see a "- 20" next to Intel's stock price. It looked like a misprint. Intel had dropped from $65 to $45 on Friday. (This was an era long before our current world of information, so there was no way to find out what was going on until I went into work the next morning.) The mood was glum on Monday. The interpretation was that Intel's earnings had reported a slowing of growth. Over the next several months, the recession of 1974 continued. AMD dropped to a dollar or two. (Stories later were told of the AMD janitor who had taken every penny he had and bought AMD at a dollar and who then retired wealthy when the stock recovered.) Intel hit its low of around $15.75 (memorable because our stock options were reset to this price). The DJIA dropped and dropped and reached a low of around 500-550 in December 1974. 1975 was a recovery year. And so on. The "long upward boom" began around 1982, as we all know. But I'll tell you younger folks this: in my 12 years at Intel, from 1974 to 1986, I really only saw a few good years. Most years saw pressures from the economy, from Japanese producers, from our inability to make some product. 1974 was a bad year. '75-78 were pretty good years. '79 was a bad year except that something like 80% of our profits came from a single product, and it wasn't even a micro! (It was the 2716.). 1980 through 1982 or so were really bad years. We had no viable 64K DRAM, we had problems with several other products, and the Japanese were making their famous assault on DRAMs and spreading their "quality" mantra. Around this time, maybe as late as '83 or so, Intel was in such bad shape they got a kind of bailout from IBM! 1984 was a pretty good year, as I recall. By 1985, Intel was abandoning the RAM market. Whew. And having layoffs. It was a grim time. And the 386 was still in the future. Meanwhile, the 286 was an architectural mess and was facing massive competition from the 68000, National's 32032, the MicroVAX, and so on. New companies like Seeq and MIPS were planning to take away business. At Intel, in those days, it was very schizoid. I think the company was very well-managed, but the pressures were enormous and outside the control of management. During bad years, which were about 7 of the 12 years I was there, budgets were tight and hiring was difficult. During the boom years, about 4-5 of the 12, we used to joke about having to hire engineers down at the blood bank. Boom and bust. Several of my friends who read this SI board, or who did, can confirm most of the details. There particular part of Intel might have done better or worse at times than the part I saw was doing. We who were there used to marvel at how the employees who saw Intel during its "long boom" from around 1988 to around 2000 had _never_ seen a single down year. Every year during that period was a growth year like the handful of good years I saw during the 70s and 80s. Well, that boom ended two years ago. And pretty soon those employees will likely see their first layoffs. This does not mean Intel is headed for the bit bucket. Far from it. It's like a controlled burn of a forest, essential for weeding out the "underbrush" (die unterbrushen?) which developed over the dozen or so boom years. And, as I have said in several contexts, Intel seems more dominant today than it has ever been. You younger folks who fret about competition should have seen things when there was _real_ competition. Whoa, Nelly! Intel will recover. And then more "fat" years will lard up the company some more. The more things change... --Tim May

To: Amy J who wrote (167131)	6/26/2002 2:22:08 PM
From: GVTucker	Respond to of 186894

RE: What happened in '74 My personal guess on what caused the problems in 1974 (in order of importance): 1. The wage and price controls instituted by the Nixon administration were beginning to trickle through to the entire economy. 2. Nixon's resignation caused a crisis of confidence in the system. As we all know now, confidence in the system is a highly important factor in market valuation. 3. The Arab Oil Embargo began in 1973 and its after effects exacerbated the inflation that was already problematic because of the wage and price controls.