AMD Is Amazing
Q: After increasing my holding at 70 and 66.5 last Friday, the price jumped to 85, seems my target at 108 is not too far away. Stop-profit is now raised to 70.
A:
It is natural for one of the best trading stocks of all time, AMD, to have
a technical following. I am curious, though, whether anybody (else) is
looking beyond the current dynamics to the question of "what happens?"
when the 800 pound gorilla, Intel, shoots itself in the foot with its next
generation CPUs by demanding that nobody be able
throwing away every piece of software currently in use. AMD has already
announced that its next generation is designed to be compatible with
the existing software base. The difference in attitude is fundamental.
What do y'all think? Is the gorilla so big that it can get away with
something as absurd as destroying the entire installed software base at
one swell foop? Or is that just another batch of FDIV pretentiousness
from an all-too-close-to-monopolist? (It was only a "small" error, Intel
said, completely ignoring real world standards that CPUs are expected NOT
to make errors at all.) What do you think the chances are that Intel will
go ahead with such an absurdity? How far along the path to annihilation
do you suppose Intel already is and what might be their chances of making
a late course correction to avoid the consequences of their stated plan?
More important from the viewpoint of the amazing AMD, will such a
presumptuous absurdity from its gorilla-sized competitor, coupled with
AMD's own more rational approach, provide a clean shot at major long-term
market share growth for AMD? What say you? Have you yourself bought into
the "planned obsolescence" scheme of the Predatory Microsoft Monopoly
replacing one buggy product with another every few years (so that complete
displacement of all previous software would be okay with you)? Or does it
seem unreasonable, for the sake of increased speed and computing features
that one might more easily buy from AMD, to throw away large investments
in programming and software so as to start over on the gorilla's new frame?
My long term position in AMD currently amounts to 1.25% at market (0.22%
at cost) of my total portfolio. However much I may like a company and
what it is doing--and I definitely like AMD which has already PaidFor my
remaining basis in the stock I still have 3.47x over via *realized* and
already banked capital gains--I would become concerned for anybody who
had "too much" of their savings in a single investment.
I know I'm just being an old worry wart, but after 38+ years trading
stocks including an early experience losing 75% of all the money I had in
the world on a company which went broke, control of position size is one
of the "big issues" for me. I never allow my inputs to a position to
exceed 1% of my total portfolio and I never allow any single stock to
account for more than 4% (usually it's 5%, but the market is kinda way up
there by long term standards) of my portfolio.
I think that 1% investment max is probably too low for most people because
3% to 4% would give a reasonable averaging of risk on a statistical basis.
The amount of research needed to pick stocks can be considerable and
managing a hundred stock picks can be considerably more work than
managing 25 to 34 stock picks.
Large companies don't carry the same amount of risk as smaller companies
and can be a larger percentage of a portfolio.
Stock investors need to have alternatives outside the stock market, but
home ownership and real estate seem to be the only good alternatives.