To: Rob S. who wrote (10127 ) 2/27/1999 12:26:00 PM From: Samuel R Orr Read Replies (3) | Respond to
Rob, Unfortunately, you're dead right about Murphy. It is tough for a technologist(and I was one) to fail to be impressed by widgets and facile ways to do old things better. I will also agree with him that Intel, Dell, and many other household names such as Lucent(a play to get away from the Western Electric millstone) are vastly overpriced. But the rub, as Shakespeare once said, was that they kept going up in price because those names were safe, familiar, and trusted by people who don't know an electron isn't a point charge, but a probability density distribution function of charge. In other words, Murphy is right in technical terms but, as you said, timing and marketing experience are everything necessary to make money. I suffer from the same faults as Murphy, and STILL feel that small cap stocks purchased when they're relatively cheap will turn out to be better investments today than either DELL or Intel. AMD is now a real competitor to Intel in terms of the number of microprocessors sold, but is losing money on its great "Success." One didn't need to be the proverbial rocket scientist to know more than six months ago it was going to happen. Few of the other analysts seemed to pick up on that, but since they maintain the price climate, being as prescient as Murphy meant one either lost money or paid a high "lost opportunity cost." Similarly, DELL's decision to buy only Intel microprocessors and sell high-margin PC's for prices close to or better than $2K, has cost them market share in the number of PCs sold, but they've stayed very profitable.
