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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Skipper who wrote (28747)	2/24/1998 11:59:00 AM
From: Reginald Middleton	Read Replies (1) \| Respond to of 1572866

<I hesitate to throw my 2 cents worth in here since I am not a "pratitioner', and since I was handily spanked by AMD in 97, but the recent upward move this stock is showing speaks to the market's collective tendency to arrive at pricing that is driven from investor SENTIMENT,(that is they have finally solved their yield problems), not third order calculus equations that spit out a company's true "valuation"> I understand, but this is not third order calculus (as some may have you believe), it is simple addition, subtaction and multiplication. Investor sentiment is a measure used by traders and speculators,not investors. Investors focus on money, and nothing else. If you are correct in estimating the money potential of an asset, then the market will agree with you at some point in time. Assuming the 5 year avg. horizon of investors, they have this time to spare. Traders do not. If investor sentiment allows an asset to get too far out of whack, an investment oppurtunity arises. Think of Rolls Royces temporarily going for $50,000 or Volkswagons rising to $150,000. You (think you) know the true value fo these automobiles, so you can assume an error in the market's valuation and act on it. You would sell every Volkswagon you could find and buy every Rolls you could afford:-) Recent moves in share prices only tell you that there has been a recent move in share prices. George Soros's book, the Alchemy of Finance does a superb job at illuminating the folly of the herd mentality in its Boom-Bust stories.