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AMD: Brace Yourselves, Winter Hype Is Coming (And Profits)

Austin Craig profile picture
Austin Craig


  • Market psychology: Is this a good time to buy?
  • Warrants and debt: Does it even matter?
  • CES hype will pump up AMD's stock price in January.
  • How to get paid for owning this stock.

Is it a good time to buy AMD (NASDAQ:AMD)? Well "yes" and "no." "Yes" in the fact the company is doing very well with its CPU efforts and is well set to improve in GPU via next-generation GPU code names Navi. Yet, the overall market is experiencing great uncertainty via rising interest rates, an energy war with Iran, trade wars with China, along with the recent arrest of a Chinese CFO. Mr. Market does not like uncertainty. In this article, we will review market psychology and how AMD will experience a pop in January. Lastly we will show you how to be paid to own this stock.

Market Psychology

Part of being a trader is being unemotional while realizing that investors or speculators trade on emotion. Logic cannot define it. You can logically state this stock is overvalued or undervalued and it matters not. The herd has spoken and will push the stock up to unrealistic values or will sell the stock off to depressingly deep value levels. This cartoon captures it perfectly:Madness, market madness, buy stocks, sell stocks, AMD

The Cycle of Trading

Life and people move in cycles. Trading and investing is no different. The first step to evaluating any stock is realizing what part of the cycle that stock is in (along with the market in general).


cycle of investingChart #1 above depicts pretty accurately the flow of emotions at work on investors. At any given time, the herd will be at some point on the chart. However, Chart #2 below gives a solid illustration of how things go south in a hurry when the masses panic.

Chart #2panic, herd panic,Per Chart #1, it's likely the majority of AMD investors are somewhere between hope and optimism. Obviously, AMD could continue to wobble (and/or the market could continue to shutter around). Yet, I'm willing to bet on AMD's long-term roadmap. Let's look to the future

This article was written by

Austin Craig profile picture
"Never let formal education get in the way of your learning". - Mark Twain,,,You are here for one reason. You want "actionable Intelligence". If you wanted a history lesson on a company then Google is your friend. My aim is to provide intelligence that you can read, ponder, and then execute upon to make a profit or avoid a loss. A price of a stock is almost irrelevant. It is the last thing to consider when buying a stock. If you don't pay attention to management, financials (go back 3 years), the sector, global macros, your portfolio mix, along with risk/reward for capital used and the company news, you are ignoring all of the things that come before price. Price is mostly real-time sentiment. It is hardly ever a good indicator of value.People who only look at price will fail as investors, because price is a result of fundamentals, news, and sentiment. You have to learn to "take" from the market, if at all possible, make it give you what you want.Use targets, set limits, protect your capital with stops and if something changes fundamentally, review, review, review.You can't read too much. If it was easy everyone would be doing it. Now you have no reason to not get Alpha.

Analyst’s Disclosure: I am/we are long AMD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

We own AMD common stock. We also own AMD long term options. We have sold covered calls against a portion of our AMD holdings. We have sold puts against AMD at a $19.50 strike for December.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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