Robert Myers wrote:
>>The vast majority of stock is traded without tracking the companies.
Ever
>>heard about algorithmic trading? Then vast majority of human traders
base
>>their opinions on varius indicators not connected directly with company
>>product. And the reason is simple -- they do not understand what's the
product.
>>
>
> You are simply amazing.
>
> Peter Lynch, the founder and long-time manager of the Fidelity
> Magellan Fund and widely regarded as one of the most successful
> institutional investors of all time, famously taught: "Buy what you
> know."
Yet majority ignores that. It's the 'greater fool' rule which rules here.
> It's true that program trading can produce fast "technical" moves in a
> stock; that is to say, moves unrelated to fundamentals. Program
> trading can't explain AMD's 2007 performance, and the most recent
> stock price slide isn't just a coincidence with the Barcelona fiasco.
AMD's slide started aproxx. 1 year ago. It is full year of their poor
finacial performance. The performance is still poor, so what do you
expect?
One does not need a technical clue to see that AMD has worst results of
it's
league.
> Under other cir***stances, Barcelona might be a minor fumble, just as
> some fumbles in football are of little consequence. When the clock is
> running out and you are driving for a touchdown you need and you
> fumble the ball, that's like what just happened with Barcelona.
There were similar fumbles with K8. Notice that K8 was delayed multiple
times, and clock was not up to speed initially as well.
> AMD has introduced a product that I really like, something that I've
> been wanting a major chipmaker to make for a long time: a GPGPU stream
> processor with double precision floating point. It will turn vector
> computers into commodities. Unfortunately, it will never be more than
> a footnote on AMD's balance sheet. How do I conclude that? The Wall
> Street Journal didn't even mention the product introduction.
Wall Street Journal is clueless about technical matters. The might be
interested if the thing either ****ps en masse (so there are many customers
buying) or at least AMD signed a deal with some big, im****tant party.
Wall Street Journal and likes notice such new things when they are not new
anymore. They are ntriously bad at predicting things
And wether it will be just a footnote on AMD's balance sheet or not
depends
on AMD's execution (both in dhat area as well as others), not on some
technically clueless media.
>>>The United
>>>States (in particular) has companies like Intel (and, yes, even AMD)
>>>because it so efficiently predicts and rewards success and predicts
>>>and punishes failure through market mechanisms.
>>
>>>Chattering away like this is an interesting pastime, but it doesn't
>>>affect anything of im****tance. Even much less so now than it used
>>>to. You may not think much of the dimwits who majored in management,
>>>but they can buy and sell as many techies as they need to find out
>>>what's going on.
>>
>>Then such great manager who does not see the difference between a can od
>>soft drink and a computer drives the company to the edge of bancrupcy.
>
> CEO's are a different matter, entirely. More and more, CEO's are
> given incentives to drive stock price.
Got you! How they could 'drive stock price' if market is so smart as you
say?! Market was stupied enough to not see that technically they were up
to
a disaster! They could because market is clueless about all the details.
MArket understand things at the level where there is no difference between
a
box of bananas and box of electronics.
> That often leads to short term
> thinking and decisions that are bad for shareholders.
Yet, shareholdres are stupid enough to buy that BS.
> The day you see
> me quoting a CEO on a company's prospects is the day you will be
> justified in speaking to me the way you have.
Those CEO's are outsmatring the marked manyfold.
>>Even noticed that those most succesfull technical companies are lead to
>>their biggest success by people who know the technical stuff. Just
notice
>>Intel or Microsoft. Then compare Intel & AMD -- both started as
Fairchild
>>offsprings, Intel was lead by guys who were semiconductor specialist
(behind
>>being good managers) and AMD was run by Jerry Sanders, who was just
>>management specialist. Compare the performance of the both.
>
> You've just lost the AMD sup****ters.
I don't care. It's reality what matters.
> Jerry Sanders placed a hugely
> risky bet on Opteron, and he won.
He placed many, many such bets with mixed success. His biggest bet the
company stunt was K7 -- it was "save or die" for the company, as AMD was
never closer to going belly up than in June 1999. They had money just for
few months. K7 was on time and it was superior to what Intel then produced
and could produce.
K8 fast just a logical next step. K8 success is in majort part due to
Intel's poor execution caused by the takeover by marketing and their loose
grip with the reality.
> He was a true visionary, a cowboy
> almost, in his willingness to take on Intel. I wouldn't have taken
> the Opteron bet for any reason, but, then, I'm not Jerry Sanders. I'm
> only a techie.
>
> One can look at Intel and see just the opposite.
That's why I wrote about Intel. They were by the time not run by
technically
clueful with all the bad results of that.
> Intel became
> obsessed with its stock price and seemed to forget that physics do
> matter, even though the company was famously founded and run by
> scientists.
The scientists where then already replaced by standard stuff not seeing
difference between a box of bananas and box of electronics known to
general
public as computer.
> It mismanaged Itanium horribly, and got away with it only
> because it is so wealthy. Stockholders have not been well served by
> Intel management, at least not until Core 2.
True.
>>And great technical companies have trouble if there are taken over by
those
>>management majors you're praising. See Apple, DEC and even Intel at it's
>>time of little trouble.
>>
>
> Management is a discipline for a reason, and I don't identify classic
> management types with the troubles of any of the companies you name.
DEC is a typical case. Company was sold into pieces removing all the
sterngths it had. But financial results were good until the **** has hit
the
fan.
> For a classic management failure, look to Home Depot, where a General
> Electric (known for producing sought-after management talent) alumnus
> stumbled badly. It happens.
>
>>>The question here is whether AMD will even survive. For one thing,
>>>the stock is selling below book.
>>
>>Not for the first time.
>
> You really don't understand what a problem this is. Buyers don't want
> to see problems on the balance sheets of vendors. AMD worked long and
> hard to get rid of its reputation as a fly-by-night company always
> teetering on the edge of collapse, and, almost overnight, it's got
> that reputation back.
AMD was late with K8, with Athlon64, with 180=>130 nm transition then
130=>90 then with 90=>65 and seems to be late with 65=>45.
>>AMD is now just two pony ride. No one can turn it around without
throwing
>>out much of the company.
>
> That's what turnaround and buyout specialists are about. Without
> looking, I think that AMD's current market cap is less than what they
> paid for ATI. IBM doesn't want AMD out of the x86 business, but IBM
> has to do things at arm's length, because IBM wants to be able to do
> business with Intel (which also wants to do business with IBM). There
> are people who are pretty good at these things who wouldn't know a
> pole from a zero.
I just think they are still too expensive for buyout.
>>>The sum of the opinion here is that it wishes to minimize the
>>>seriousness of what has happened with AMD.
>>
>>This last thing is just a little addition. AMD was worst performer of
the
>>league the entire year. The stock was below 8 before the news wrt that
bug
>>struck anyway. So they "worked" on their current evaluation whole year.
>
> Barcelona was supposed to pull them out of that hole.
So they'll have to wait for 3 monhts more.
> And, guess
> what? Markets tend to find these things out before they make the
> news.
Markets are clueless. AMD peroformance this year is an obvious case so the
stock plummeted.
rgds
\SK
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