Comments on: THE INTEL/YUM/DELL CONUNDRUM

By: santo kuma

santo kuma — Thu, 16 Jul 2009 03:50:57 +0000

Intel has a good quarter. But one of the heavy customers of Intel – Dell has a bad quarter. I do understand that there are other players like HP andACER… that use Intel chips and technologies offered by Intel. But to me, it some how is not gellin! I dont have the info as to get into to the details of Intel’s revenues from Dell, but I can think of this reason: Intel recognized the revenue once it supplied to its Customers(PC makers) but thePC makers themselves couldnt sell, so couldnt recognize the revenue! I think Intels a lagging indicator – the market reacted AND unnecessarily bid up the prices. The PC makers are probably hanging on to the inventory. But again, I have heard of Dell’s JIT(just in time inventory) propositions! Or may be we need to wait to hear from otherPC manufacturers!

If it istoo good to be true – is probably is not ture!

FYI: I come from India but live in USA. My Dad did tell me 2 weeks back that some local PC manufacturers are too busy to take his orders for a shipment of 3 PCs. Does that speak something?

By: TPC

TPC — Thu, 16 Jul 2009 01:26:24 +0000

Excellent points MBA. If I have earned the right to call my self pragmatic I am still trying to figure out where you get off calling yourself Angry? You seem more practical than myself most of the time….:-)

By: Angry MBA

Angry MBA — Thu, 16 Jul 2009 01:17:09 +0000

Good practical points, TPC, you’ve certainly earned the right to call yourself a pragmatist.

Those who trade based upon political belief and/or conspiracy theories are setting themselves up for huge failure and disappointment. It’s one thing to convince oneself of black helicopters, but it’s entirely another matter to put one’s capital at risk based upon those beliefs. Those beliefs will get in the way of objective analysis, and will cause those who hold them to either miss opportunities or else obscure their ability to see when they’ve been proven incorrect and need to exit.

If the issue here is one of short-term trading, as opposed to medium- to long-term investing, then forget the political protestations or hatred of Goldman, and try to make a play that is going to actually make a profit, with an exit strategy if your business case (not political one) proves to be incorrect.

Some of these folks who are shorting because they are afraid of a Marxist takeover or are fearful of the end of the world are just setting themselves for needing welfare checks. Ignore the hucksters who prey upon either deep fears or hopeless optimism, and make a pick that will produce cash. Cash tilts neither left nor right, it just takes up more space in your wallet.

By: TPC

TPC — Thu, 16 Jul 2009 01:07:07 +0000

Robert, good stuff. Thanks for passing it along.

By: TPC

TPC — Thu, 16 Jul 2009 01:02:40 +0000

Asteroids, Andy is correct. I don’t mean to imply that it has no impact on trading or that it isn’t having an adverse effect, but for now they are working within the rules that the system has laid out. I can voice my unimportant opinion here on the site and write about it, but we’re just as well focusing our time on how to benefit from any potential manipulation rather than wasting time trying to change the Wall Street/Washington DC relationship that has been the same for 50 years….Anyone who thinks the Goldman Sachs club in DC is going to change the rules to hurt GS is kidding themselves. Can’t beat em, join em.

By: AndyD

AndyD — Thu, 16 Jul 2009 00:35:07 +0000

Asteroid,

I think TPCs point is that it isn’t illegal now so the best we can do is try to focus on ways to make money rather than bitch about it on tHe Internet

By: Robert in Chicago

Robert in Chicago — Wed, 15 Jul 2009 23:49:20 +0000

TPC, for a very detailed analysis of how divorced Intel’s results were from the reality of end-use demand, see this:

http://www.minyanville.com/articles//7/15/2009/index/a/23565

By: asteroids

asteroids — Wed, 15 Jul 2009 23:32:43 +0000

The High Frequency Trading that GS is alledged to be conducting according to Themis and others
is another form of front running. Instead of everyone having a consistent view of the market
the computer that’s closest to the exchange wins. In any event, it’s distorting the market since the activity isn’t transparent. It will only end in tears some day.

By: TPC

TPC — Wed, 15 Jul 2009 22:11:38 +0000

For those interested. CIT Isn’t getting support….

http://www.marketwatch.com/story/cit-says-government-support-unlikely-near-term

By: TPC

TPC — Wed, 15 Jul 2009 22:10:32 +0000

Jeff,

Good reads. I would only point out that no one is judging these numbers on their true merit. They only judge them based on how they compare to the analysts estimates. Traders are making a bet now that earnings will continue to beat the estimates. That doesn’t mean the economy is recovering. Regular readers know that I expect the rally to top out as we get deeper into earnings season.