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

To: Tenchusatsu who wrote (173128)	2/19/2003 1:10:07 PM
From: GVTucker	Respond to of 186894

Tenchusatsu, RE: He and/or his peers have already bought a bunch of INTC, and they now believe it's a good time to go public with their bullishness. Cynicsm and sarcasm aside, at lot of people actually believe this, so it's good to explore into that. First of all, note that an analyst's call has absolutely no long term effect on the price of a stock. Study after study after study has been done correlating analyst recommendations to subsequent stock price performance, and there is absolutely no correlation between the two once you get past the initial pop. Next, look at that last thought, the initial pop. Intel opened at $16.99 today, and that's pretty close to the high of the day. That would have created 28¢ of profit for a trader that was given inside information of Edelstone's pending upgrade. Then, you need to subtract a penny for each side of the trade for bid/ask costs, and also you need to take away Morgan Stanley's commission on both sides of the trade--after all, that inside information has to cost. Full service, heavily discounted institutional commissions run about 3¢ a share, so that's another 6 cents out of theprofit, leaving 20¢ of profit if you happened to execute everything perfectly. That's a pretty crappy return, especially when you consider that the risk nowadays includes a rather substantial fine and other penalties. And that's for a trade that worked out.

To: Tenchusatsu who wrote (173128)	2/20/2003 9:24:39 AM
From: Amy J	Read Replies (1) \| Respond to of 186894

Hi Tenchusatsu, RE: "Translation: He and/or his peers have already bought a bunch of INTC, and they now believe it's a good time to go public with their bullishness. Cynical, I know, plus I agree with his long-term comments. It's just the next few months that I'm scared of." -------------- Mabye just a tad too cynical? I may be naive, but I sure don't think these guys do that. A person can make more money through an honest living, than doing something they shouldn't be doing. Don't let a handful of bad people out of the thousands and thousands of excellent companies make you cynical. The bad cases are truly an exception, not the rule. My brother is a gov't economist with a focus in a particular industry. He has restrictive trading, just like an analyst probably has. And I can definitely tell you for a fact that this costs him in a negative way. He can't even invest in the industry he's an expert on. Can you believe it? Because of the huge administrative headache in investing (and maybe the political headache, I don't know), he doesn't bother to invest in stocks and avoids them totally even outside of his industry. Can you believe it? I was really concerned about that, so as a holiday present, I gave him some money as a gift so he would finally buy himself some plain vanilla mutual funds (which he can do) to at least get him in the market. Even a mutual fund he has to report. He's all bonds or real estate. We're as opposite as day & night. He's more conservative. (I personally think being conservative has more risks.) I totally avoid the topic of his work. The only thing I can see about his work, is he's been working a lot of long hours. My WAG is it's related to the financial impact of the war, though I of course don't know and wouldn't be rude enough to ask. I would bet you the s/c stock analysts can't invest in the semiconductor industry either. RE: "next few months that I'm scared of." I don't see business getting any worse than 9/11, but tend to feel we're going to see some hurt in Q1. I wouldn't worry though. I heard on the radio that military analysts seem to think the war will take 6 months. Maybe we could have a recovery in time for the holiday season - who knows. But I think there are bigger costs than financial. These are not good times. Regards, Amy J