AMD Stock Advice! Lets discuss the future of AMD

[kherman]

Originally posted by: dfi
Go to your bookstore and look for a book called "The Boom and the Bubble" by Robert Brenner. Read the chapter on the bubble, and why stock prices drastically outpaced the profitability of manufacturing firms during the mid to late 90s. Read why stock prices have fallen, and continue on to read why stock prices still are inflated compared to profitability. It assumes a bit of knowledge on monetary policy, but it shouldn't be too hard to understand.

If you actually go and read all that (it's only like 20 pages for that section), and you still feel like investing in AMD, then do as you will. Personally, I wouldn't.

Take my advice with a lot of skepticism because I don't know jack squat. I've never invested in stocks, and my knowledge is very academic in nature.

My general feeling is that a lot of people get into equities to make a quick buck, which usually results in them losing money. If you want to invest in stocks for the long run, then diversity is the way to go. But if you really want to just take a gamble and try to make a quick buck, then I don't see the point. And is there really a point to diversifying your portfolio when you're out to make a quick buck and your investment capital is so small? I mean, you can split up $1000 to absorb shocks, but how much money will you have after service charge and taxes? (correct me if I'm wrong, but tax on stocks is NOT inflation adjusted, right?)

dfi

About the comment on taxation of stocks. You pay taxes on dividends as regular income yearly.

You pay capital gains tax on stocks upon the sale of the equity.
A reason to hold stocks longer is that taxation changes on them. If you hold a stock for less than a year, the gain is taxed at you reguler income bracket (maybe 30%). If you hold the stock for more than a year, the tax rate is 20%. A new law is that if you hold a stock for more than 5 years, you are taxed at 18%. The 5 year one is new, so if you bought a stock 2 years ago, upon sale 10 years from now, you still have to pay 20%. Forget where the cut-off date is for it.

 

[kherman]

Originally posted by: FeathersMcGraw

Originally posted by: kherman
Do NOT invest in mutual funds. Mutual funds are not good investments. Let the flames start.... There are alot of good stocks out there, jsut at this sight, most people are into tech. Consider index tracking stocks also. I'm a long term (buy and hold) investor, so I'd get flamed for anything I say about investing. Right now is a great time to get into the market, just be careful of what you buy and don't get emotional about it.

It depends what you mean by good investment. I don't want to have to monitor the performance of my portfolio day-to-day (or even week-to-week), but I'm not looking for mounds of filthy lucre, either. If I can dump my money into passively-managed (and therefore low-fee) index tracking funds, then I can get market-level appreciation in the long-term with the effort that it takes to write a check on a monthly -- oh, wait, it's getting invested regularly by automatic withdrawal, so I don't even have to worry about that. I'd rather use the power of compounding by dividend and capital gains reinvestment, dollar-cost averaging, and decades of market forces to fuel my retirement. And in the meanwhile, I can go play my GameCube.

Mutual funds are just a means to invest in a broader diversification of stocks than would ordinarily be available to a small private investor. Yes, they will typically underperform a hand-picked stock portfolio, but how many miniature Warren Buffets are there out there who can reliably pick value and performance? How many people are willing to expend the effort to attain that level of investment performance?

To casually dismiss mutual funds in general as poor investments makes a number of assumptions about the goals and risk tolerances of investors.

First paragraph. not sure what your point was. I'm a long term investor also? I use many of the same techniques as you do? I don't monitor my portfolio every day. Well, I work in front of a computer all day, so I do look once in a while, thing is, I could care less that I'm down right now.

Paragraph Two: I know what mutual fund are? AS for being a value investor, like Warren buffet, that depends on what your investment strategy is. I look for value in growth stocks among other things. in essence, i am an anal long term investor. I'd only buy about 170 comapnies out there. There are many companies on my NEVER BUY list, like MSFT. Why? no dividend. it takes me about a day to pick a stock. Actually, about 3 hours. It's not very difficult. I spent about 3 months studying investing on a daily basis before getting into the market(I'm anal). I could care less what a stock performs like, as long as they up their dividend by about 10% every year. So, if every three months, I need to pick a stock. So be it. it's not that hard to do. If I own a stock that gets overpriced, I'll just sell a covered call. There are about 8 things I look for in a stock before I really consider it. That's how in the world of public companies, I only would consider 170 or so.

paragraph Three: I admit ignorance. SOme mutual funds are good, most are not. Researching them could yield good results, while lowering the volatility of your portfolio. I might get into them next year. probably go after index tracking stocks though.

Currently in my retirement prtfolio:
GD (I work there, 401K)
KIM (Roth IRA)

Personal:
PFE
LLTC
KIM

Going to add JP this winter to my personal account, maybe...... Toio much going on nextyear. Marriage, honeymoon, putting a deck on my house. Might sit on my cash for the next 6 months. Most of my personal money is in LLTC whcih is doing very bad right now. I'm long tertm though....

 

[BooneRebel]

BUY!!!!!! er, uh, SELL!!!!!!

Asking for general investment advice is one thing (there's some good info in the posts above). But asking for information regarding a single stock purchase is foolish on any Internet board. Haven't you read about any of the pump & dump scams in the past few years?

Stock prices fall for a reason. And cheap stocks are cheap for a reason. Before investing your life savings on $3 stocks, consider the possibility that the stock will drop to $2, then $1, fall off of the exchange and trade as a penny stock until the company goes bankrupt.

Don't invest money that you 'have to have'. That is, if you're planning on buying a car, house, college tuition, etc. with the savings don't put the money into play. Only if you're comfortable that you have no need for the money right now should you buy stocks. And before playing day trader look at your options for mutual funds, IRAs or Roth IRAs. I wouldn't start out buying stocks.

Not the advice you want to hear, I'm sure, because I went through the same thing a few years ago. I ignored everyone and blew my wad on an IPO that dropped 90% of it's value and I held on hoping to see it turn around. Never happened, lesson learned.

 

[Doggiedog]

If you are going to short a stock, you should definitely hedge yourself by buying a call option and limiting your loss if something goes wrong.

As for AMD, AMD has about $1.1B in cash but $1.7B in debt and is burning $175M/quarter. It won't be long until they run out of cash at this rate.

I find it tough to believe that Opteron is going to be AMD's savior. I don't think 64bit computing will mean anything to us in the short term. Plus, what you are really doing is banking on Microsoft to come out on time with a major new OS and you know how notorious Microsoft is about coming out with OSes.

I think AMD has absolutely no credibility on the street. Jerry Sanders is a pathological liar (he lied to me in my face once about when Opteron will come out) and the company will not go anywhere until he is out and a credible management team is put in place.

Institutional investors hate this stock and this stock will not go anywhere until they turn around and start buying. It is hard to gain back trust after blowing someone up many many times. I doubt AMD will be able to do that anytime soon. Until we see a fundamental change in the company I'm willing to bet the stock stays stuck here in this range.

 

[hevnsnt]

buy everything.. lower your pps

 

[Novgrod]

AMD is a very high-risk option; everybody here is right in that they are sucking it up right now. Few of them are right in saying it's going to keep declining. A stock with X value can only go down to Y price, because the stock price already reflects its uncertain future.

There's only so much advice that can be given. You should invest in safe stuff if you think the market is going sideways or down. You should invest in high-growth stuff if you think the market has bottomed. Nobody can call a bottom, so if somebody tells you one way or the other, he or she is lying. If you were to ask my opinion, I think the market may not have bottomed but it won't go down much more so now is *not* the time to be investing in sideways stocks, it's the time to be investing in good long-term high-growth stocks, especially if you're seventeen. As has been mentioned, though, it's not the greatest idea in the world to stick all your savings into one company; you'll thank yourself if you go for a couple companies in a couple different sectors.

 

[jemcam]

Originally posted by: Wingznut
Never invest in a company because you "like them", or like their products. Invest with your brain, not with your heart.

And let's say that Hammer turns out to be the best cpu ever made... That's absolutely no guarantee that you will make money off of their stocks.

I agree with you generally, but tell that to all those Harley investors 20 years ago. They made a killing and a large percentage of them bought Harley in the early 80's just because they liked the company. I bought a few shares in 1995 or so and haven't done so bad either.


see for yourself!

better yet, a longer time span

 

[Danman]

Originally posted by: PsychoAndy

Originally posted by: SWirth86

Originally posted by: PsychoAndy

Originally posted by: SWirth86
Invest nothing... It's too unstable now.

AMD could release the Hammer on time and have it crush everything else, or they could keep on paper releasing chips...

And remember, you can make money off a stock that goes down in value. Maybe this is the best way to go...

Um, lets see. Dosent selling short have an infinite loss probablity?

Right.......

-PAB

Put Options?

Recheck the tread title.

-PAB

Re-check your spelling David.

 

[Freejack2]

The future paths of AMD.

Good
1) AMD releases hammer and it succeeds, they use the money to put their nose to the grindstone and keep on pumping out kickass cpus.

So-so
2) AMD releases hammer and it succeeds but it's too little too late. AMD files for bankruptcy protection.
Causing...
A) AMD gets some dip financing and pulls themselves out with a couple of great cpu releases.
B) Intel becomes just too fierce a competitor and AMD folds. Intel celebrates with a 25% across the line price increase and a $3000 price tag on their next cpu release.

Bad
3) AMD releases hammer and it's a FLOP!
Causing...
A) AMD files for bankruptcy protection but stays alive long enough to put out a good successor to hammer and they emerge from bankruptcy.
B) AMD can't get a good hammer or other cpu out in a reasonable time and folds. Intel celebrates with a 25% across the line price increase and a $3000 price tag on their next cpu release.
C) AMD can't get a good hammer or other cpu out in a reasonable time and folds. Something wierd happens like Cyrix steps up to the plate with a killer cpu, or some graphics chip manufacturer like Nvidia or ATI start making a high end cpu.

It's kind of scary when AMD's future hangs on their next cpu release.

 

[glenn1]

I hope to decide by Monday, invest everything or nothing. Thanks for the advice

Since no one else bothered to ask, how much money are you talking about? If you're talking less than say one year's IRA contributions ($3,000), then i don't see a problem with taking a shot on AMD, especially if you personally like the company. You're just as likely to do well or poorly with AMD as almost any other stock in the short run. Now whether AMD is a better bet than something else over the long haul, only you can decide that. When you're dealing with smaller amounts, you don't need to be a Warren Buffett to do well. It's partly research, but mostly luck. I'd rather someone have a couple of grand invested in a company they liked (even if the prospects didn't appear to be the best) rather than the same amount invested in a "better company" that they hated or were indifferent about, so long as you have the ability to not simply be a cheerleader for the company you're invested in.

 

[Mani]

I would NOT bet the farm on AMD or any company for that matter. But I would put a smaller portion of my portfolio in it. Primarily because its upside potential FAR exceeds its downside potential at this point, since the stock price is so heavily deflated. Hammer may or may not be the best thing since sliced bread, but in the case that it is, AMD stock chart will look like it did when it released the Athlon, and you are going to bank.

 

[kherman]

Originally posted by: jemcam

Originally posted by: Wingznut
Never invest in a company because you "like them", or like their products. Invest with your brain, not with your heart.

And let's say that Hammer turns out to be the best cpu ever made... That's absolutely no guarantee that you will make money off of their stocks.

I agree with you generally, but tell that to all those Harley investors 20 years ago. They made a killing and a large percentage of them bought Harley in the early 80's just because they liked the company. I bought a few shares in 1995 or so and haven't done so bad either.


see for yourself!

better yet, a longer time span

I could probably list 20 companies that were not highly regarded in the 80s that are gone now. So, you really have nothing more than a statistical anomoly.

 

[Doggiedog]

You guys should also monitor the fact that AMD gets almost 1/3 of their revenues from flash memory. Any pricing declines in memory will hit them hard as well.

 

[kherman]

Originally posted by: glenn1

I hope to decide by Monday, invest everything or nothing. Thanks for the advice

Since no one else bothered to ask, how much money are you talking about? If you're talking less than say one year's IRA contributions ($3,000), then i don't see a problem with taking a shot on AMD, especially if you personally like the company. You're just as likely to do well or poorly with AMD as almost any other stock in the short run. Now whether AMD is a better bet than something else over the long haul, only you can decide that. When you're dealing with smaller amounts, you don't need to be a Warren Buffett to do well. It's partly research, but mostly luck. I'd rather someone have a couple of grand invested in a company they liked (even if the prospects didn't appear to be the best) rather than the same amount invested in a "better company" that they hated or were indifferent about, so long as you have the ability to not simply be a cheerleader for the company you're invested in.

Umm, I hope by ALL, that glenn does have other investments. if not, I'd do atleast two companies in two different industries. For a Roth-IRA, go half AMD and half, aa high yielding REIT.