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

To: Paul Fiondella who wrote (48406)	2/22/1998 8:18:00 AM
From: Mary Cluney	Read Replies (2) \| Respond to of 186894

Paul, >>>By comparison the cost of creating a new version of Windows software is mostly personnel. <<< *cut to Betty Coder's voice mail *** Hello, you have reached 555-1616, we are not in right now. My mother-in-law just came in to take care of the kids so I didn't have time to finish the project last night --- Jack's out to look for a new house - one big enough for ourselves, the kids, and the new baby due next month. That $million dollar bonus from my last job didn't last very long - only I wished I could have finished the project before I accepted this new job for a 50% pay increase. I hope I can stay on this job long enough to vest in the pension plan - I think I need to be here for at least six months. Can't get any work done at the office - my accountant , stock brokers, and recruiting agency keep my phone ringing constantly. I'm having a real tough time doing my required 24 lines of code each day. Some days I can't even do 2 or 3 LOCs. BTW did you hear that New World Software offers a six month maternity leave with full pay and stock options worth cazillion dollars.... Jack is leaving Universal Paramount Software tomorrow...Could you believe it - you know that limo that's suppose to pick him up for work each morning...turns out to be one of those Caprices - you know one of those things they use as Taxi's in New York.. God Awful ... and they expect you to get to work in one of those things and deal with the stock brokers, accountants and write code and......... Got to run ... the travel agency just booked us to The New Resort ...got to rack up those frequent flyer miles..... See ya, Mary

To: Paul Fiondella who wrote (48406)	2/22/1998 10:11:00 AM
From: Joey Smith	Read Replies (2) \| Respond to of 186894

Paul, re:Did it ever occur to you that P/E's are lower in capital intensive industries for a reason. Hint: It has something to do with the incredible amount of investment required to build all of those FABS. Those billions have to come out of earnings. One could easily make the arguement that capital intensive segments, like Intel's, serves as a deterrent to entry, thus reducing the industry segment to an oligopoly, or possibly even natural monopoly. This should eventually lead to monopolistic rents, according to theory. However, what I think the Street is missing with Intel's PE is that Intel is perceived as only having physical assets, and not intangible assets. This is a big mistake. Intel intangible assets include: enormous brand recognition, large customer accounts, huge R&D investments, technology leadership and standards setting, and employee expertise and experience. For example, Intel employees have experience and expertise in advanced manufacturing processes which has led to a seamless transition to .25m, while competitors are having big-time problems. Just because Intel is not a software company does not mean intangible assets (things not on the balance sheet) should not be used to represent its value. Once the Street starts to realize this, I believe Intel's PE will go up. joey

To: Paul Fiondella who wrote (48406)	2/22/1998 10:18:00 AM
From: MrCash	Read Replies (1) \| Respond to of 186894

Paul You make a reasonable point, but miss the boat. A low P/E for Intel? Did it ever occur to you that P/E's are lower in capital intensive industries for a reason. Check wsrn.com and wsrn.com If we go by "your" argument, then "Return on Assets" is what you are talking about. ROA for Intel is 25.4% and is 24% for MSFT YEAR 1997 1996 1995 1994 MSFT 24.0% 21.7 20.2 21.4 INTC 25.5% 21.7 20.4 16.6 In "reality" all it takes to compete with MSFT is a garage with a few PCs and you are in the software business. To be "competitive" you need a CDROM writer too and a supply of blank CDs. Maybe $10K will get you going. The fact it is so easy to compete with MSFT and so few do effectively is why the Feds are going after MSFT (they are expert at eliminating or swallowing their competition). To compete with Intel, you need $1B-$2B in capital for a good fab, expert process engineers for every process (otherwise you have AMD), and a good working relationship with HWP for the next uP design, with AMAT for the latest fab equipment, on and on. I might have made an argument that Msft is overvalued, but then you probably need to look at EVA of which I do not have a good link for. Msft does use conservative accounting and, most importantly, the $89 price for a new version of Windows, $250 for a suite and $250 for WindowsNT is not expected to drop in half every 18 months or so. For me, it is easy to see what Intel does with its $15B in assets, but what does MSFT do with its $11B in assets? reposted at suite101.com regards Kirk out