I have been investing in tech stocks since 1984. Yes there are no sure things and regular due diligence is required if one is to get good returns and avoid having their shirt handed to them.
However, given that, Apple has been and remains the best relatively conservative high growth investment opportunity of my investing career. I would submit that getting out of the stock at these valuations (P/E = 18, PEG at <0.5) is an emotional decision vs. a decision made on business and market fundamentals. It is also one of the best long term option plays (LEAPs) for the same reasons.
Is Intel Destined to Remain Only a Dividend Play? [View article]
Oh boy! What a lot of folks don't seem to be aware of is that Intel's incursion into mobile undercuts the high profit margins on their proprietarycomplex high transistor count CPU's (see more commentary below). As Microsoft loses its dominance, this will also undercuts the demand for these complex high transistor count microprocessors. This is likely to mean that what they do well and have been able to keep proprietarty to them will no longer command the premium prices that have kept their earnings so high and so dependable.
Compounding Intel's problem is the fact that their efforts to diversify from this dependence over the last 20 years has been a dismal failure -- 20 years later they are still in the same boat.
I believe that there is a good reason why these diversification efforts have had so much difficulty. Intel is unbelievably competent and disciplined at what they does well: designing complex high quality reliable CPU's and making them with a manufacturing machine they have engineered to very high yields and high productivity.
However when they get involved in areas outside of their areas of competence, this success gets in their way in way.
In new endeavors, my exposure to Intel tells me that they tend to rely too heavily on internal "experts" vs. experts in the fields they are trying to break into or the companies they acquire. It is very hard for them to support and be open to other ways of doing things and also to maintain a culture of entrepreneurship at this point in time. Intel Capital, Intel's venture arm where a lot of new opportunities should come from, tends to suffer from this problem as well.
Intel's moat and unique core competence is in the proprietary manufacture of high ASP (average selling price), high margin, complex X86 microprocessers with 500 million plus transistors. No other manufacturer is allowed to duplicate or sell the product. The good news is that all the huge server farms that must be built to support migration to the cloud and the mobile internet will require these kinds of CPU's indefinitely. At this point in time this is also a large enterprise upgrade to Microsoft's Window 7 in process which is driving a lot of PC purchases however it is not clear that there will another such upgrade in the foreseeable future. In addition there is a lot of the world that still needs PC proliferation or upgrades (China, especially Middle Western China with >2X more population than the United States is a case in point). So this will hold up Intel's earning power at the current level for some point in time, but not indefinently.
Even if Intel had a cutting edge mobile device which it does not, the ARM processor along with Apple's proprietary CPU, currently run the majority of mobile and tablet devices. The latter is already undercutting some PC sales.. The ARM processor has less than 50 million transistors, a factor of 10 less complexity than X86 processors and It has been licensed for manufacture by many semiconductor companies. It is sold with a correspondingly low average selling price or ASP. The Intel Atom processor, designed for mobile applications and to compete with ARM, has 47M transistors count and cannot command Intel's usual premium prices. Every Atom CPU that Intel sells potentially competes with or undercuts X86 sales and is a significant potential earnings loss to Intel.
If that were not enough, the problem is going to get a lot stickier with other very competent companies with great track records adding to the mix. QCOM has its Snapdragon CPU running in cutting edge Android phones, Nvidia's Tegra mobile CPU has promise and Nvidia has now teamed up with ARM for even more powerful devices using their formidable joint core competencies. In addition Broadcom will be introducing an all in one mobile chip with CPU in 2011.
All of this presents major challenges to Intel's bottom line in the short term and moreso in the longer term. This is not a good situation and is why the stock is currently frozen in place. It remains to be seen how Intel will deal with this problem.
A Huge Rally for Equities Coming in 2011 [View article]
I don't think one day, or one week or one month, make that kind of difference.
On the other hand equity markets are poised to take off big time. Stimulus II monies will begin floating investments around the world at a time when worldwide economic recovery is slowly gaining a significant foothold.
Goverments around the world are on guard and will do whatever they need to do to keep the underwater financials on life support for as long as it takes to get them back to break even.
Proposed FASB accounting changes will be reined in so that big banks will be allowed to continue to hide their marginal assets off the balance sheets and even continue to transfer bad loan reserves into earnings just as they have been doing to raise stock prices.
No government is in a position to deal with Meltdown II.-- the fire department has used up most of the water.
Most significantly huge piles of money placed in the bond bull market will be coming back into equities. Investments making less than 2% returns will rapidly become a negative investment as moderate and quite welcome moderate inflation starts to gradually take hold again.
Beyond that bond investors will become more and more ancy about missing equity opportunities like AAPL and GOOG and key stocks in other sectors as they continue to grow at double digits. Dotcom II, driven by the mobile internet and other improved IT capabilities including cloud computing, will help stimulate the economies of the world by providing new services business and consumers want and by continuing to make improvements in productivity. The later will help reduce the damage caused by higher levels of inflation that will occur as we go forward.
Gold has reached its peak for now. Warren Buffet says it well: "You could take all the gold that’s ever been mined, and it would fill a cube 67 feet in each direction. For what that’s worth at current gold prices, you could buy all of the farmland in the U.S. Plus, you could buy 10 Exxon Mobils, and have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"
Cisco A Hot Buy On New Product Line [View article]
The number of cheerleading articles on Cisco is snowballing on SA along with other dogs like MSFT. The reality is that this stock has gone nowhere for years and we are still stuck with the same old management that thinks video conferencing and set top boxes are good business ventures. This dog cannot even pay decent dividends and yet rewards its executives with lucrative compensation and stock option plans in spite of poor business performance. Until the latter changes I would not hold my breath on getting any decent returns from this company.
4 February 'Feel Good' Factors For Apple Fanatics [View article]
Apple is a bargain value stock by any measure: PE, dividend, buybacks, established competitive positions in multiple businesses, etc.
The bad news is out which primarily consists of Samsung's presence now as a major competitor. There are many catalysts which could return this stock to growth status in the eyes of a majority of investors. These factors range from announcements of Apple's rapidly growing enterprise business, to many new product opportunities, to China Mobile, to new business areas (automotive, TV). I would submit that another major catalyst will hit soon, the overall recognition that Apple's position in the marketplace will continue to allow it continue to capture a large fraction of mobile device profits, a growing area that has room for multiple competitors.
Overall, Apple stock is a bargain by any measure if you look beyond the negative information fire hose that is running full bore right now.
Intel Margins Offer Investors Insight To The Future [View article]
Intel's success in providing high margin products for mobile web devices is going to be key to its future profitability. The fact that so much computing is moving to mobile devices is disruptive and is challenging Intel's current dependence on X86 devices as its main producer of income, earnings and very high margins. It has never been more important for Intel to diversify and current efforts to enter this new business demonstrate that they understand that concern. It has never been good for Intel to be so dependent on one product line, even as successful as it has been.
Intel's future is now heavily intertwined with potential partners like Apple and Google and being challenged ARM, TSMC, Samsung, and Qualcomm.
No doubt Apple is trying to transfer all A series processor manufacturing out of Samsung and TSMC is the big beneficiary. And of course TSMC is the prime chip supplier for QCOM which is in the catbirds seat selling into all mobile platforms. I believe TSMC also supplies ARM based processors for a number of others including BRCM and NVDIA
Downstream Intel may be the wild card. You have to believe Apple and Intel are talking regularly. Intel process technology is 2 generations ahead of TSMC. Intel's latest 22nm technology offers very high performance with what may be the lowest power consumption of any competitor. And they will have new 14 nm technology on line in 2013.
There are several issues in the way. Intel wants to promote its own mobile processors of which the Atom was the first example, more variations on the way. These devices will also be shipped to Apple's competitors which has the benefit of spreading process development and state of art fab costs across multiple customers.
But this might take away some of Apple cutting edge or even leave it behind. If other competitors ended up with a strategic advantage as a result of using Intel products, Apple will have to watch out big time here. Another of the many reason Apple and Intel must be in regular discussion and even in joint pilot projects.
Cost is another factor. Intel has by far the most expensive process technology and has very high margins on its X86 devices, at least up until now. They may try to keep pricing and margins high on any processors that it sells into mobile. That could be strategic blunder on their part unless they can also offer advantages that make up for pricing differences.
On the other hand, Intel's advanced technology allows it to put many more transistors into smaller and smaller areas, giving it the ability to deliver more functionality at a potentially lower cost due to reduced chip size (more chips/wafer).
Intel has the disadvantage right now in radio devices vs QCOM and others. The do not offer LTE (aka 4G) technology as of yet. You have to believe they will soon have this for use in their system on a chip (SOC) solutions.
There is also the possibility of Intel becoming a foundry for Apple's ARM based mobile A series processors based on ARM designs. And Intel already supplies all the processors in Apple's Mac line. Although there have been strong rumors that Apple is experimenting with what could be its own lower cost ARM based designs.
So as you can see Apple and Intel have a lot to talk about and TSMC may loose some of that it has recently gained. Whether these talks go anywhere beyond where they are remains to be seen. If there is an expanded partnership going forward, this could bring yet another major manufacturing operation home to the US.
In the case of TSMC will have additional major new opportunities if ARM based processors start to be competitive for servers. This will occur at Intel's expense.
Intel Hits It Out Of The Park At CES 2013 [View article]
I repeat my comments from regarding your last article which as of yet remains unresponded to, see below. I would add that I find your comments in this story "Aggressively Buy Intel" to be very premature and risky. Yes highly risky if your investment is based on expectations of share price growth, growth beyond what any other S&P 500 might do as part of an all boats will rise scenario.
A lot of your articles on the high tech companies I follow closely, including the two most recent ones on Intel are only a part of the story. They ignore the financials that must be considered if one is to know the investment implications. Until you do at least some cursory analysis of the changes in revenues, earnings and margins that are associated with the business changes you discuss, your articles will continue to be misleading and flawed.
In this case, your commentary on Intel's attempts to diversify into the mobile radio and processor business is wishful thinking. It is misleading to draw the conclusions you draw unless you consider the economics involved.
Intel's X86 margins are by far the highest in the high volume silicon based semiconductor manufacturing industry. The more mobile products Intel successfully sells, the more their margins will suffer. The more their margins suffer the lower their earnings will be, certainly as a fraction of revenue. The more earnings suffer the more pressure there will be on the stock price and on Intel's ability to build it $5B state of the art wafer fabrication facilities while maintaining a very high dividend payout.
As to the TV business, well that is well out of Intel's core competencies and they have never ever done well when they get that far out. Even closer in has been very difficult as evidenced by their attempts to get into the mobile chip business and that started over 10 years ago, and look at how far they still have to go before they can be seen as a major player. When I worked for Intel they set out to be #1 in any business they were in. Well they are a long way from that after over 10 years of trying.
Maybe this time "it will be different" but I doubt it. It is a little Cisco's Chambers buying set top box, video camera and home networking equipment businesses only having to sell them off recently at a loss after years of additional losses.
I would suggest that anyone doing the economic analyses that I am suggesting consider one of Intel's strategic advantages. This advantage is the ability to transform last generation wafer fabrication plants running last generation processes to the production of less demanding mobile products.
The good news is this reduces depreciation charges significantly which of course increases margins significantly. The bad news is that Intel's state of the art low power technologies based on the 22nm 3-D Tri-Gate transistor structure cannot be manufactured in these legacy fabs
Why Google Will Win the Smart Phone Battle [View article]
I recently moved from a Motorola Droid phone to an iPhone. My overall comment is that Android is a buggy operating system and results in a phone with significantly inferior operating characteristics. It also does not take a rocket sciencist to realize that Google's Ap acceptance process is creating a free for all with garbage that even the user commentators cannot keep up with.
Within a list of hundreds of items which are much better on the iPhone, for example the built in Stock Ap, there is only one item I miss vs. my Droid phone. That is the Google navigation system which enables a reliable "navigate to location xyz" by voice. I really miss that feature, but I am sure it will soon be addressed by a bug free Apple approved Ap. I am willing to wait for that.
There are going to be a lot of Android based phones in the world but that it is not surprising. The operating system is free and has been leased to multiple phone manufacturers who also produce a lot of budget phones. But if you ask who has the happiest customers, and you ask who is making the most money, there is no serious competition to the Apple iPhone.
WILL APPLE BE A RECIPIENT OF DELL SHAREHOLDER CAPITAL?
Dell shareholders will need a new place to put their money and they will be looking around for a great place to do so. They need look no further than Apple, a great value play that also has a strong growth component. Apple is the largest player, certainly in terms of captured earnings, that is moving on beyond where Dell and the PC left off. I have a Seeking Alpha article in the pipe that may be posted by tomorrow
If you are a long term investor in Apple, worrying about all the ups and downs across the year doesn't matter and saves one from selling at inopportune times. Apple is a unique stock in that regard as the long term trend is up and there is no sign that trend is changing anytime soon. Of course it is always nice to buy LEAPs at a discount for long term holds and I try to do this whenever timing works out. The good news is that Apple pricing is subject to manipulation and wide valuation swings so buying opportunities come around regularly and longer term sell decisions can ride the ever increasing long term valuation of Apple stock.
For example, Jan '13 $350 Leap Calls bought 4/1/11 are up >250%. I expect to sell these in the Fall with cumulative 400% gain and will roll some to April 2013 calls to capture the gain surrounding the Q1 2013 Jan earnings report.
This is a highly profitable pattern that has worked successfully every year since 2009 and there is every reason to believe it is going to continue to work at least until early 2014. The rest of my Apple LEAP and call chain bought in a similar fashion goes out to Jan 2014 and is firmly in the black with gains ranging from 26 to 270%, a no brainer and has none of the overhead (worry, time and dollars) of being a weekly or daily trader. I go for months with no action and no trading while watching all the gyrations while bridging the lows.
Jason I always read your SA posts as soon as I see them and read your Economic Timing newsletter as soon as it comes in (I am subscriber). I think your commentary on Apple and the Eurozone is very astute and I almost always learn something new even though I follow both topics daily in great detail.
However I am not so enamored with all the short term buy and sell recommendations and would love to sit down and objectively compare results some time. I submit that there is simply no way to time or make short term recommendations and reap the gains that are possible with Apple stock. Longer term up and down patters are usually not repeated dependably and there are too many pieces in motion including the Eurozone crisis and Apple stock price manipulation. This just simply exceeds the reliability of short term predictions by all up to genius level. I have to believe that a number of the many short term buy and sell recommendations are leaving money on the table if not all of them in the larger context.
I am a senior and had never thought about the benefit that Apple's ease of use has to senior citizens, let alone the added cool and Gucci factors that can be appealing to them, And there are many of these folks who now want to use computers and be on line who have never done so before. Many never used computers in their job and are not computer savey. Learning something this foreign and intimidating can be a challenge for even the most skilled senior. I can speak from personal experience in trying to help others with their computer issues.
I had many frustrating moments trying to help my 80 plus father in law deal with windows and office. I had to rescue him many times, sometimes multiple times in one day. It was only his strong desire and persistance that allowed him to continue.
I also found the Motorola Droid phone to be challenging even though I have had 40 years of experience in the use of computers and worked in high tech field. Anyone who uses this phone must be willing to waste a lot of time coming up to speed and debugging things that should be routine operatoin. The touch screen is overly sensitive in most cases in which any kind of misqued movement, a problem lots of aging seniors have, sends the phone off doing things you had no intention of doing. In meeting other kinds of needs it is unresponsive at critical times, for example while trying to answer the phone while driving. Many defects in the phone make it hard to use routinely as a simple cell phone nd defects in the add on applications are a frustration even to computer savy 20 somethings let alone senior citizens.
Forget $2000 an Ounce; Gold Set to Plummet [View article]
Jason, Glad someone has the guts to stand up and say that gold is overpriced and is in a bubble. All the gold advocates posting here and elsewhere sound like the folks who didn't believe that the dot.com bubble was a bubble and who believed that real estate prices would keep going up.
I appreciated your article and it was good to hear that others out there see the wisdom in going long in properly selected stocks. Thanks.
GE New LED Light Bulb Looks Like a Bright Idea [View article]
One more example of how poorly GE is being managed. There is no reason that LED lightbulbs cannot be made in various bulb sizes, socket sizes, and wattages for a few dollars each or even less. It is just a matter of time...the technology to do this is off the shelf. If GE cannot figure out how to do this, then the Chinese are already on their way. We ought to double the interest on GE's bailout money until they come up with a competitive cost effective set of LED bulbs. Also, LED's draw milliwatts not watts. This is demonstrated by the fact that you can go out today and buy a 6 LED flashlight at your local store for $2 to $5 that runs for months on 3 AA batteries...it is unAmerican for GE to try to make a Cadillac profit center out of what could be a successful Chevrolet opportunity. Or are they just that incompetent?
Rally to End Soon, Says Morgan Stanley [View article]
Hello, We live in a world economy and no longer a U.S. dominated economy. The U.S. government can carry this debt in ways that are not as damaging as when financial institutions and consumers default. And yes there will be reckoning but that can be spread out over years and there will be a certain amount of forgiveness as a result of inflation, deliberate or otherwise. The much more serious threat to the economy of the world is an unregulated financial industry that games the system for the benefit of bonuses and salary payouts for their executives and is now doing that on a worldwide basis. There a trillions of derivatives out there (read double digits). If a problem occurs that results in the questioning of the value of even 5% of these instruments, all of our other problems will be small potatoes.
Intel Hits It Out Of The Park At CES 2013 [View article]
First of all my comments on Intel over the last few years have turned out to be entirely accurate, and certainly as it applied to diversification success and share price. Your comments on my comments add to the misleading picture, are inappropriate and inaccurate. Far from everyone would agree with them.
Ashraf's articles consistently ignore the economic fundamentals involved. My comments consistently address financials as well as qualitative commentary. I maintain it is irresponsible to pump a stock without addressing the financials, at least at some point. Otherwise you talk yourself into rose colored commentary just as Ashraf has done here. I stand firmly behind my comments.
Why I'm Selling Apple [View article]
However, given that, Apple has been and remains the best relatively conservative high growth investment opportunity of my investing career. I would submit that getting out of the stock at these valuations (P/E = 18, PEG at <0.5) is an emotional decision vs. a decision made on business and market fundamentals. It is also one of the best long term option plays (LEAPs) for the same reasons.
Is Intel Destined to Remain Only a Dividend Play? [View article]
Compounding Intel's problem is the fact that their efforts to diversify from this dependence over the last 20 years has been a dismal failure -- 20 years later they are still in the same boat.
I believe that there is a good reason why these diversification efforts have had so much difficulty. Intel is unbelievably competent and disciplined at what they does well: designing complex high quality reliable CPU's and making them with a manufacturing machine they have engineered to very high yields and high productivity.
However when they get involved in areas outside of their areas of competence, this success gets in their way in way.
In new endeavors, my exposure to Intel tells me that they tend to rely too heavily on internal "experts" vs. experts in the fields they are trying to break into or the companies they acquire. It is very hard for them to support and be open to other ways of doing things and also to maintain a culture of entrepreneurship at this point in time. Intel Capital, Intel's venture arm where a lot of new opportunities should come from, tends to suffer from this problem as well.
Intel's moat and unique core competence is in the proprietary manufacture of high ASP (average selling price), high margin, complex X86 microprocessers with 500 million plus transistors. No other manufacturer is allowed to duplicate or sell the product. The good news is that all the huge server farms that must be built to support migration to the cloud and the mobile internet will require these kinds of CPU's indefinitely. At this point in time this is also a large enterprise upgrade to Microsoft's Window 7 in process which is driving a lot of PC purchases however it is not clear that there will another such upgrade in the foreseeable future. In addition there is a lot of the world that still needs PC proliferation or upgrades (China, especially Middle Western China with >2X more population than the United States is a case in point). So this will hold up Intel's earning power at the current level for some point in time, but not indefinently.
Even if Intel had a cutting edge mobile device which it does not, the ARM processor along with Apple's proprietary CPU, currently run the majority of mobile and tablet devices. The latter is already undercutting some PC sales.. The ARM processor has less than 50 million transistors, a factor of 10 less complexity than X86 processors and It has been licensed for manufacture by many semiconductor companies. It is sold with a correspondingly low average selling price or ASP. The Intel Atom processor, designed for mobile applications and to compete with ARM, has 47M transistors count and cannot command Intel's usual premium prices. Every Atom CPU that Intel sells potentially competes with or undercuts X86 sales and is a significant potential earnings loss to Intel.
If that were not enough, the problem is going to get a lot stickier with other very competent companies with great track records adding to the mix. QCOM has its Snapdragon CPU running in cutting edge Android phones, Nvidia's Tegra mobile CPU has promise and Nvidia has now teamed up with ARM for even more powerful devices using their formidable joint core competencies. In addition Broadcom will be introducing an all in one mobile chip with CPU in 2011.
All of this presents major challenges to Intel's bottom line in the short term and moreso in the longer term. This is not a good situation and is why the stock is currently frozen in place. It remains to be seen how Intel will deal with this problem.
A Huge Rally for Equities Coming in 2011 [View article]
On the other hand equity markets are poised to take off big time. Stimulus II monies will begin floating investments around the world at a time when worldwide economic recovery is slowly gaining a significant foothold.
Goverments around the world are on guard and will do whatever they need to do to keep the underwater financials on life support for as long as it takes to get them back to break even.
Proposed FASB accounting changes will be reined in so that big banks will be allowed to continue to hide their marginal assets off the balance sheets and even continue to transfer bad loan reserves into earnings just as they have been doing to raise stock prices.
No government is in a position to deal with Meltdown II.-- the fire department has used up most of the water.
Most significantly huge piles of money placed in the bond bull market will be coming back into equities. Investments making less than 2% returns will rapidly become a negative investment as moderate and quite welcome moderate inflation starts to gradually take hold again.
Beyond that bond investors will become more and more ancy about missing equity opportunities like AAPL and GOOG and key stocks in other sectors as they continue to grow at double digits. Dotcom II, driven by the mobile internet and other improved IT capabilities including cloud computing, will help stimulate the economies of the world by providing new services business and consumers want and by continuing to make improvements in productivity. The later will help reduce the damage caused by higher levels of inflation that will occur as we go forward.
Gold has reached its peak for now. Warren Buffet says it well: "You could take all the gold that’s ever been mined, and it would fill a cube 67 feet in each direction. For what that’s worth at current gold prices, you could buy all of the farmland in the U.S. Plus, you could buy 10 Exxon Mobils, and have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"
Cisco A Hot Buy On New Product Line [View article]
4 February 'Feel Good' Factors For Apple Fanatics [View article]
The bad news is out which primarily consists of Samsung's presence now as a major competitor. There are many catalysts which could return this stock to growth status in the eyes of a majority of investors. These factors range from announcements of Apple's rapidly growing enterprise business, to many new product opportunities, to China Mobile, to new business areas (automotive, TV). I would submit that another major catalyst will hit soon, the overall recognition that Apple's position in the marketplace will continue to allow it continue to capture a large fraction of mobile device profits, a growing area that has room for multiple competitors.
Overall, Apple stock is a bargain by any measure if you look beyond the negative information fire hose that is running full bore right now.
Intel Margins Offer Investors Insight To The Future [View article]
Intel's future is now heavily intertwined with potential partners like Apple and Google and being challenged ARM, TSMC, Samsung, and Qualcomm.
No doubt Apple is trying to transfer all A series processor manufacturing out of Samsung and TSMC is the big beneficiary. And of course TSMC is the prime chip supplier for QCOM which is in the catbirds seat selling into all mobile platforms. I believe TSMC also supplies ARM based processors for a number of others including BRCM and NVDIA
Downstream Intel may be the wild card. You have to believe Apple and Intel are talking regularly. Intel process technology is 2 generations ahead of TSMC. Intel's latest 22nm technology offers very high performance with what may be the lowest power consumption of any competitor. And they will have new 14 nm technology on line in 2013.
There are several issues in the way. Intel wants to promote its own mobile processors of which the Atom was the first example, more variations on the way. These devices will also be shipped to Apple's competitors which has the benefit of spreading process development and state of art fab costs across multiple customers.
But this might take away some of Apple cutting edge or even leave it behind. If other competitors ended up with a strategic advantage as a result of using Intel products, Apple will have to watch out big time here. Another of the many reason Apple and Intel must be in regular discussion and even in joint pilot projects.
Cost is another factor. Intel has by far the most expensive process technology and has very high margins on its X86 devices, at least up until now. They may try to keep pricing and margins high on any processors that it sells into mobile. That could be strategic blunder on their part unless they can also offer advantages that make up for pricing differences.
On the other hand, Intel's advanced technology allows it to put many more transistors into smaller and smaller areas, giving it the ability to deliver more functionality at a potentially lower cost due to reduced chip size (more chips/wafer).
Intel has the disadvantage right now in radio devices vs QCOM and others. The do not offer LTE (aka 4G) technology as of yet. You have to believe they will soon have this for use in their system on a chip (SOC) solutions.
There is also the possibility of Intel becoming a foundry for Apple's ARM based mobile A series processors based on ARM designs. And Intel already supplies all the processors in Apple's Mac line. Although there have been strong rumors that Apple is experimenting with what could be its own lower cost ARM based designs.
So as you can see Apple and Intel have a lot to talk about and TSMC may loose some of that it has recently gained. Whether these talks go anywhere beyond where they are remains to be seen. If there is an expanded partnership going forward, this could bring yet another major manufacturing operation home to the US.
In the case of TSMC will have additional major new opportunities if ARM based processors start to be competitive for servers. This will occur at Intel's expense.
Intel Hits It Out Of The Park At CES 2013 [View article]
A lot of your articles on the high tech companies I follow closely, including the two most recent ones on Intel are only a part of the story. They ignore the financials that must be considered if one is to know the investment implications. Until you do at least some cursory analysis of the changes in revenues, earnings and margins that are associated with the business changes you discuss, your articles will continue to be misleading and flawed.
In this case, your commentary on Intel's attempts to diversify into the mobile radio and processor business is wishful thinking. It is misleading to draw the conclusions you draw unless you consider the economics involved.
Intel's X86 margins are by far the highest in the high volume silicon based semiconductor manufacturing industry. The more mobile products Intel successfully sells, the more their margins will suffer. The more their margins suffer the lower their earnings will be, certainly as a fraction of revenue. The more earnings suffer the more pressure there will be on the stock price and on Intel's ability to build it $5B state of the art wafer fabrication facilities while maintaining a very high dividend payout.
As to the TV business, well that is well out of Intel's core competencies and they have never ever done well when they get that far out. Even closer in has been very difficult as evidenced by their attempts to get into the mobile chip business and that started over 10 years ago, and look at how far they still have to go before they can be seen as a major player. When I worked for Intel they set out to be #1 in any business they were in. Well they are a long way from that after over 10 years of trying.
Maybe this time "it will be different" but I doubt it. It is a little Cisco's Chambers buying set top box, video camera and home networking equipment businesses only having to sell them off recently at a loss after years of additional losses.
I would suggest that anyone doing the economic analyses that I am suggesting consider one of Intel's strategic advantages. This advantage is the ability to transform last generation wafer fabrication plants running last generation processes to the production of less demanding mobile products.
The good news is this reduces depreciation charges significantly which of course increases margins significantly. The bad news is that Intel's state of the art low power technologies based on the 22nm 3-D Tri-Gate transistor structure cannot be manufactured in these legacy fabs
Why Google Will Win the Smart Phone Battle [View article]
Within a list of hundreds of items which are much better on the iPhone, for example the built in Stock Ap, there is only one item I miss vs. my Droid phone. That is the Google navigation system which enables a reliable "navigate to location xyz" by voice. I really miss that feature, but I am sure it will soon be addressed by a bug free Apple approved Ap. I am willing to wait for that.
There are going to be a lot of Android based phones in the world but that it is not surprising. The operating system is free and has been leased to multiple phone manufacturers who also produce a lot of budget phones. But if you ask who has the happiest customers, and you ask who is making the most money, there is no serious competition to the Apple iPhone.
Sell Apple And Buy...What Exactly? [View article]
Dell shareholders will need a new place to put their money and they will be looking around for a great place to do so. They need look no further than Apple, a great value play that also has a strong growth component. Apple is the largest player, certainly in terms of captured earnings, that is moving on beyond where Dell and the PC left off. I have a Seeking Alpha article in the pipe that may be posted by tomorrow
The Myth Of iPhone Seasonality [View article]
For example, Jan '13 $350 Leap Calls bought 4/1/11 are up >250%. I expect to sell these in the Fall with cumulative 400% gain and will roll some to April 2013 calls to capture the gain surrounding the Q1 2013 Jan earnings report.
This is a highly profitable pattern that has worked successfully every year since 2009 and there is every reason to believe it is going to continue to work at least until early 2014. The rest of my Apple LEAP and call chain bought in a similar fashion goes out to Jan 2014 and is firmly in the black with gains ranging from 26 to 270%, a no brainer and has none of the overhead (worry, time and dollars) of being a weekly or daily trader. I go for months with no action and no trading while watching all the gyrations while bridging the lows.
Jason I always read your SA posts as soon as I see them and read your Economic Timing newsletter as soon as it comes in (I am subscriber). I think your commentary on Apple and the Eurozone is very astute and I almost always learn something new even though I follow both topics daily in great detail.
However I am not so enamored with all the short term buy and sell recommendations and would love to sit down and objectively compare results some time. I submit that there is simply no way to time or make short term recommendations and reap the gains that are possible with Apple stock. Longer term up and down patters are usually not repeated dependably and there are too many pieces in motion including the Eurozone crisis and Apple stock price manipulation. This just simply exceeds the reliability of short term predictions by all up to genius level. I have to believe that a number of the many short term buy and sell recommendations are leaving money on the table if not all of them in the larger context.
Apple: A Baby-Boomer Stock [View article]
I had many frustrating moments trying to help my 80 plus father in law deal with windows and office. I had to rescue him many times, sometimes multiple times in one day. It was only his strong desire and persistance that allowed him to continue.
I also found the Motorola Droid phone to be challenging even though I have had 40 years of experience in the use of computers and worked in high tech field. Anyone who uses this phone must be willing to waste a lot of time coming up to speed and debugging things that should be routine operatoin. The touch screen is overly sensitive in most cases in which any kind of misqued movement, a problem lots of aging seniors have,
sends the phone off doing things you had no intention of doing. In meeting other kinds of needs it is unresponsive at critical times, for example while trying to answer the phone while driving. Many defects in the phone make it hard to use routinely as a simple cell phone nd defects in the add on applications are a frustration even to computer savy 20 somethings let alone senior citizens.
Forget $2000 an Ounce; Gold Set to Plummet [View article]
Glad someone has the guts to stand up and say that gold is overpriced and is in a bubble. All the gold advocates posting here and elsewhere sound like the folks who didn't believe that the dot.com bubble was a bubble and who believed that real estate prices would keep going up.
I appreciated your article and it was good to hear that others out there see the wisdom in going long in properly selected stocks. Thanks.
GE New LED Light Bulb Looks Like a Bright Idea [View article]
Rally to End Soon, Says Morgan Stanley [View article]
Intel Hits It Out Of The Park At CES 2013 [View article]
Ashraf's articles consistently ignore the economic fundamentals involved. My comments consistently address financials as well as qualitative commentary. I maintain it is irresponsible to pump a stock without addressing the financials, at least at some point. Otherwise you talk yourself into rose colored commentary just as Ashraf has done here. I stand firmly behind my comments.