Friday, January 26, 2007

AMD (Advanced Micro Devices): A Fighter. Always Has and Always Will Be

AMD and I go way back... waaaaaaaaaaay back. Gosh, this stock has been with me ever since I was in college. Through the years, I have seen this stock get pummeled time and time again and each time it's been pummeled, I've seen it fight back. This is a company of fighters and it's in an epic battle between Intel. So even tho the stock is down now, and will continue to drop in the near term, from what I know as a computer guy and from everything I read, this is why and how I think AMD will fight and fight back in a big way.

Actually, there was an entry in CAPS that solidified everything I believe. So rather than rewrite everything. I'll just let the beauty of the entry speak for itself.

"Engineers of AMD have a new brilliant and revolutionary idea. Together with ATI they'll bring the CPU and GPU on the same chip. But this is just the beginning of a new era. In near future they will probably mold a physic-engine, and any kind of accelerated units that your imagination allows, within a single chip. (Ref: AMDs analyst day at 14. Dec. 2006, presentation of Phil Hester, AMD's Corporate Vice President and Chief Technology Officer, http://www.amd.com/us-en/Corporate/
InvestorRelations/0,,51_306_14668,0
0.html)

This means no more FSB speed limit between CPU and GPU. After this fact was declared (actually much before 14.Dec), NVDA has tried an urgent counter attack, and announced a new NFORCE motherboard with 1033 MHz FSB speed in addition to its new 8800 GeForce serie. This however doesn't compensate the fascinating idea of hardwired CPU-GPU.

Similarly Intel's hurriedly planned 45 nm chips cannot counterbalance this revolutionary idea. In fact most of the end-users will not even have interested about the nm scala of these chips.

If the system intelligently optimized and perform better, it should sell better. Marriage of AMD and ATI is something more than targeting the game and multimedia market. With this new concept, they will change the rules. They will redefine the art of computing and they will break the new speed limits.

Imagine how the motherboards will shrink. And imagine how AMD will invade the laptop market. Hardware that we add on today's motherboards, or some addons like on board vga's will be shifted from the surface of motherboards into the processor. This means however means cheaper laptops, cheaper motherboards, but more apportionment for AMD since it offers more functionality on its chips.

In long term this means motherboards will be cheaper, but AMD chips will be sold for higher prices, because on their chips they will bring more than multiple-cpu's. They will cancel the need for graphic cards, or on the board vga's. And in future, they will probably cancel the need for basic audio functions, they can easily bring physic -engines for gamers, etc. etc... Possibilities are limited with your imagination."

It is vision like this that brought apple from it's mediocrity. And what it comes down to is something truly unique, powerful and desireable. That's for the long term though.

In the short term. I think that AMD's newer lines of processors (It's current generation is pretty old), it's growth and integration of the ATI brand, and the Vista bump will bring it back up from the depths. i think it's a fairly solid, innovative company that has made pretty big gains in market share. Even though the price war between itself and Intel is hurting them both, I don't see either going anywhere significant in the near term.

The way I look at things, the near term drop in prices as a AMD cocking it's fist to throw a massive punch.





Notes:
In Portfolio: Yes, got in at 19... *tear*
Duration: (Pre-Earnings) Long term, (Post-Earnings) Really, really long term
Superbowl Prediction: Bears... No, Colts, No, Bears... I dunno... It's gonna be a great game!

Tuesday, January 23, 2007

MOT (Motorola) : Hello Moto...?

Superior design, desirability and cutting edge technology have always defined Motorola and their phones and the result has always been an edge in the mobile phone market. However, even with all of that, and I can't believe I'm saying this, I don't think it's going to be enough to send Motorola back to the top.

The competition is going nowhere as well. Overall, the rest of the market (Samsung, Nokia, & Sanyo) has the same homogeneous look and feel that induces sterility in addition to my yawns.

What it all comes down to is that Motorola needs to have that one "IT" product that they had in the RAZR 2 years ago. The KRZR, PEBL, SLVR and the Q (Which one doesn't belong) have all failed to take it's place in the uber-desirable range. The stock has dropped to a 52 week low of $18.50 and has dropped 40% from its 52 week high of $26.30 and like my expectations for Brittany Spears, I just have a feeling that this isn't the bottom yet.


They have 2 new products come out soon in the MING and the RIZR. As with all Motorola phones with the exception of the Q (stands for Qausimoto), The MING is very attractive and features a touch screen with stylus which is something we haven't seen in the non-smart phone range. My only concern is that how useful will it really be. I dub this phone Diet Smart Phone. All the function, half the features... Not a winning combo. While the former looks promising, the RIZR is just a sliding KRZR/RAZR. I doubt the type of hinge in which the phone opens up will really make a difference.

So the CEO has already warned that Motorola has had a miserable Q4, 2006 so the two questions we should all have is how bad and how much lower. For me, the bottomline is I don't care how far it falls, What will spur me to buy is whether or not it can produce another hit like the RAZR and the StarTAC of yesteryear (Remember that bad boy?). Either way, the stock is at 18 and was in he 7 range pre-RAZR and as low as 15 post RAZR. Bottomline is this... a long term 40% just isn't attractive enough. Let's talk again when the stock hits 15.





Notes:
In Portfolio: Not just yet
Thinking: GO YHOO, GO YHOO, GO!
Wish Was Public: IKEA (Man, that place is like Disneyland for adults)

Thursday, January 18, 2007

VLO (Valero) : Black Gold Never Gets Old in the Winter

There are 2 buys that are consistent staples in my yearly buying routine. The first is Best Buy (BBY) in the fall and the second is oil in the winter. It's as sure as Mike Tyson doing something nutty in the boxing ring. The bottomline is this. More people are driving than ever and two, cars aren't that much more efficient (actual fuel economy has been stable for the past decade at around 21 miles per gallon). On top of that, Saddam's death won't go over well and I expect greater resolve from rebel forces in the Middle East because of it. We'll see however whether we win the war or not, I'm in on oil.

Currently, the prices of oil are dropping and actually briefly dipped below $50 dollars a barrel today. The economists say that it will go as low as $40 but gosh, I just don't see it. World demand is way higher than before as other countries begin to industrialize and beginning Feb 1st (2007) OPEC will cut production even more. The so-called experts say, it going to continue the drop. OPEC (the real experts) says it's not really concerned. The only thing I have to say is that I got flash backs of Apple snickering when people said that the Zune was a threat to the iPod empire.

What it comes to is this. Oil is down now because surpluses are up but that doesn't mean demand is down as well. Equal or greater demand plus reduced production equals higher prices for us all. I'm sure the "experts" see a lot of things but if you haven't noticed, gas prices haven't really gone down all that much but Valero (as well as many other oil related stocks) are near 52 week lows. Opportunity isn't just knocking. It just kicked down the door, got down on one knee, and told you she wants to marry you.

As always. We'll see...



Notes:
In Portfolio: Yuppers
Duration: Sell right before Labor Day
Waiting for: 9pm to roll around. Grey's Anatomy left me hanging last week. Those bastards.

Saturday, January 13, 2007

BBI (Blockbuster): The Old Champ Throws a Left Uppercut to Deliver the Knock-Out Blow

Netflix had a great run. They revolutionized the whole Movie Rental Business. And for a long time, they were beating the crap out of the champ, Blockbuster. But the champ started fighting back. They opened their own online business and ended the Netflix's monopoly over the straight to your door subscription service. And now, they have done something that Netflix can't. We now can trade in our DVDs at their physical locations.

I saw the new ads for Blockbuster's Total Access last Thursday night when I was watching Grey's Anatomy (Ya, that's right, I watch Grey's... Shut up already). Within the first 7 seconds, the ad reminds you of NetFlix is (trading jabs) and then reminds you of the two day wait you have to endure before you get your next DVD (a fierce right hook) and then finishes with that you now don' t have to wait anymore because you can now return your latest DVD at their brick and mortar stores and pick up your next one immediately (The devastating left upper-cut to the glass jaw of Netflix). The moment after the ad finished, I was online cancelling my Netflix membership and signing up on Blockbuster.com.

The biggest play here is not the store trade-ins or the instant gratification (Okay maybe it is, but indulge me as I try to sound poetic... Sheeesh!). But for me, It's about having choices. With the Netflix model, you were forced into a system where you had to wait. It was great but this is better. I don't have time to watch DVDs everyday but when I find myself with some time to kill, it's wonderful that I now have the ability to walk into a store and get the instant gratification that I never had with Netflix. Before, in order to watch movies on the weekend, I had to time when I sent in my previously viewed DVD so that I could get in on Saturday. But even that wasn't guaranteed.

In any case, the CEO of Blockbuster, John Antioco, should be given the medal of honor or at least a congratulatory gift certificate to Chuck-E-Cheese (That silly rat always brings a smile to my face) for having the balls to go through with this. I know all too many so called "leaders" that wouldn't.

Right now, Netflix (NFLX) is at $22.71 and Blockbuster (BBI) is at $6.43. Before Netflix came around BBI was a consistently around the 20-25 range. I don't know about you all, but I see a switch-a-roo about to happen. But as always, we'll see.

Oh and by the way, Blockbuster CEO John Antioco recently purchased 220,000 shares, bringing his stake in the company to 1.1 million shares.



Notes:
In Portfolio: I love the smell of freshly minted shares
Duration: Maybe a year of so... We'll see
Word of the Day: scrumtulescent - More than delightful; More than brilliant; A made-up adjective used when no word can describe the perfection of something.

Friday, January 12, 2007

Willkommen bei Bagger John.

Hi all, my name is John and I'm a day trader. I've been investing in the stock market since I was 18 (I'm 28 now) and I have endured 7 years of mediocrity until I had my first solid year. I've seen stocks fall from the hundreds to pennies. I have survived the dot bomb. And I have seen companies raise themselves from the dead. The market never ceases to amaze me. Afterall, it is the only instrument on the face of the earth that can accurately measure human emotion.

It makes me laugh that it took so long for my first lesson to sink in. "Buy Low, Sell High" Who would have thunk it? It sounds easy... but it's a lot harder than it seems. What is low? When is high? And don't get me started on the emotions that run through it all. Learning to temper my emotions and be disciplined is why it took me seven years to "get it."

Along the way, I've written down the tricks I've learned and my experiences on random pieces of paper that are scattered throughout my life. So this blog is the physical collection of my on going, never-ending education in the stock market. It's about the picks I make, my mistakes and about the pursuit of the fabled multi-bagger.

Who knows, we just might all get rich.

Cheers, John

Sunday, January 7, 2007

F (Ford): 2007 and Beyond?

Ford needs help now. It's dying... quickly. So for 2007, there will be aestetically updated versions of their old focus and five-hundred sedan. I just saw the pictures of the cars today, from the 2007 Detroit Auto Show, and I felt compelled to blog.

This post is in response to the updated cars and an article written about them earlier today (read article). Commentary is done from the Ford Nation point of view:


"'Certainly there's pressure,' Lon Zaback, chief designer of the Focus, said recently as he walked around the car explaining its new features. 'I don't feel any anxiety about it at all because I think we've done a terrific job.'"

... screwing it up. You're fired.

"There's a night-and-day difference between today's Focus and the new one.' said Greg Burgess, the vehicle development manager."

Let's hope that the new one is in the night side of the comparison. That way you won't be able to see how hideous it is. And you're fired.

"Ford said they made the car more powerful while reducing its weight by about 100 pounds. It will be at least as fuel efficient as the current model, which gets 37 miles per gallon on the highway, said Marcio Alfonso, the chief engineer."

Why wasn't this done in the first place? Don't worry, you're not fired... we are nation of fairness... a mere hundred lashes with a cat-o-nine tails for you... and a hundred more because your last name is Alfonso.


"The Five Hundred got a less-radical redesign with changes in the front grille and rear lights and fenders to make it look more sporty and more like the Fusion."

... the geriatric version.

"'It was always good. We just made it better'"

Take it back... Make it go back!!! The Passat, I mean original look of the Five Hundred was better.

"'Our mind-set hasn't changed regardless of what our financial position is,' said Beth Donovan, Ford's car marketing manager. 'We want to win.'"

Spoken like a true Los Angeles Clipper... So to quickly sum up, Ford is going down and I can't wait. I can't wait for something disasterous to happen to this storied company because it's going to take something drastic to convince this stubborn geaser of a company to listen to the public and put out the right product. We want to buy Ford. Your concept cars are easily some of the best. The 49 concept, The new Interceptor concept... they are all gems. They will sell. They will revive your company. Remember the Mustang? Ya sold pretty darn well because it was true the 2005 concept.

For now, I patiently await with money in hand to buy a crapload of your stock when you guys sink into bankruptcy (oh in about 2 years) so I can buy a crapload of stock at 30 cents a share so that when you do get your act together and emerge from chapter 11, I'll have the money in hand to buy your sweet new cars. Until then.


Notes:
In Portfolio: Hell No
Watching: Come on Ford! Hit 30! (cents)
Now Eating: Honey Ham Jerky