Bill Fleckenstein

Top 15. Nov 10, 2003 10:44 AM

» Jas_Jain - Re: Re: Bill Fleckenstein says ...

In response to message posted by Kirk:

"Does Fleckenstein publish a model portfolio?
He was wrong for much of the 1990's, then was a stuck clock telling the correct time between March 2000 and October 2002, then has been incorrectly bearish for the last year. We even exchanged a few words on SI"

Stop this nonsesne, Kirk. NO one that I know has the performance of your Model Portfolio. You are badly in need of a marketing machine to market the hell out of your Model Portfolio's performance. And you must hurry!

Jas

-- posted by Jas_Jain

Top 16. Nov 10, 2003 10:57 AM

» Jas_Jain - Re: Re: Says Short AMAT, DELL, IBM, KLAC & LLTC

In response to message posted by Kirk:

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"A year ago Bill Fleckenstein was advocating shorting these stocks here. Many of these I like and own myself. Lets see how well he has done."

I feel sorry for poor Bill to be so wrong and getting caught by a genius stock trader. Some of us never learn -- not to short stocks.

"I wonder if the guy covered his shorts. Was he is so certain he is right that he has lost over 100% on some of his shorts that have doubled?"

You sure know nothing about how those who short stocks, especially, Stock-Lovers' favorite, manage risk and deal with adverse moves.

It doesn't require any skill to be long. It requires great skill to short. Yes, both lose money when they are wrong or when the market goes against them.

I am fascinated by your reactions these days -- you want to compare yours against others. All the time.

Jas

-- posted by Jas_Jain

Top 17. Nov 10, 2003 11:06 AM

» Kirk - Re: Re: Re: Says Short AMAT, DELL, IBM, KLAC & LLTC

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In response to message posted by Jas_Jain:

I am fascinated by your reactions these days -- you want to compare yours against others. All the time.

About a year ago on SI I mentioned that Fleck was a stuck clock and was now correctly telling the time. He got a bit pissed and had some words for me. Well, a year later I am right.

Why do you think I keep track of these folks? Perma bears make their money selling advice and information to bears. When they are right, they get the spotlight.

Hell, YOU didn't have any problem calling me an "investment moron" a year ago... and I am not the one who has been short.

BTW, I've taken rather significant profits in my newsletter and personal accounts that past week, including today. bulls and bears make money but pigs get slaughtered.

-- posted by Kirk

Top 18. Nov 10, 2003 11:16 AM

» Kirk - Re: Skill

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In response to message posted by Jas_Jain:

It doesn't require any skill to be long.

Of course not. Some went long QQQ on 10/17/00 on the advice of another talking head, Bob Brinker, and they are still down huge. Brinker MT Act Immediately Bulletin

It requires great skill to short..

It takes great skill to jump onto a track in front of a speeding train and jump off in time too. I'd not brag about success at either unless I wanted to be locked up in a padded cell. smile

As for talking about success, you sure had no problem with telling us how we were stupid morons last year to own stocks. I'm personally and professionally up nearly double from the bottom. I am sure a chit glad I didn't decide to start listening to bears like you and Fleck last October and sold rather than added to positions! smile

BTW, I'll probably go short or at least cash in when either you or Fleck subscribe to my newsletter. smile

-- posted by Kirk

Top 19. Nov 10, 2003 11:32 AM

» hairie31 -

-- posted by hairie31

Top 20. Jan 9, 2004 8:25 PM

» Normxxx - Bill Fleckenstein says ...

Contrarian Chronicles
If 2004 goes bad, it will go really bad

The dollar’s decline is going to cause huge problems, and the economy is artificially pumped up. When the deluge finally hits, I see stocks falling 50%.

By Bill Fleckenstein

With this, the first Contrarian Chronicles of 2004, I want to sketch out a roadmap of how I think events might play out this year.

It's been my experience that having an opinion (and strategy) for what you think may occur will help you to manage your portfolio. Of course, that strategy needs to be tweaked as new data come in.

My opinion is mostly a carry-through from last year. I continue to believe that the stock market, currency market and economy are basically all the same trade, and that the environment in which we live is as binary as any that's ever existed. That is, the market’s up and everyone is partying or down and all hell has broken loose.

Why do I think this? We have folks running the Fed (and the Treasury, for that matter) who are the most incompetent and irresponsible of all time. That's old news, but what's new, in my opinion, is their full-blown display of arrogance. They talk about keeping interest rates low indefinitely, while paying lip service to deflation or disinflation, when the opposite is happening in nearly every commodity market. (Editor’s note: The Commodity Research Bureau index is up about a third since last March.)

They shrug off the decline in the dollar when it's the world's reserve currency (and no longer a monopoly). The Fed and other bulls take foreigners' dollar appetite for granted, in terms of funding our huge current-account deficit, even as our macro position is horrible vis-a-vis our unfunded future liabilities, total debt outstanding and budget deficit.

Oh, those back-slapping central bankers
The fact that the "authorities" were able to produce a sizable stock market rally last year and a strong third-quarter GDP has prompted them to do a little end-zone dancing. Chairman Alan Greenspan's recent talk at the American Economics Association meeting in California was all about declaring victory. In as many words, he said, "So what if I created a bubble and didn't pop it? The recession was painless, and I've orchestrated the next recovery." It's kind of like a kid taunting na-na-na-na-na.

That has further fueled the Fed's arrogance in maintaining that the dollar's collapse doesn't matter. Though it will come to matter, the fact that it has not thus far has emboldened the Fed to believe in its own omnipotence. Once convinced it knew the future, the Fed now appears to realize that it might not know the future, but that doesn't matter, since it thinks it can fix anything. The Fed believes it can make the economy and the stock market do whatever it wants (though I'm sure it had its doubts for a while). Likewise, the Fed believes itself powerful enough to fix the currency market whenever it deems that necessary.

Make no mistake. The Fed does not have this power. Add to this the fact, first, that the "money-management business" (with its plethora of mutual funds, investment counseling firms, and hedge funds) has so many practitioners who've grown up in an era where it's all been about marketing and not risk management, and second, the fact that we have a public that wants to believe it will all be okay -- and you have a recipe for what we now have, which, to repeat, is an incredibly binary situation.

Slam-dunking toward disaster
The Fed, the money-management industry and the public, to some degree, are all in. Folks are either leveraged to the hilt in housing or real estate investments, and/or they are piling into stocks. In both cases, the rationalization is some variation of the greater-fool theory. It's being powered by all the liquidity spewing forth from the Fed, combined with the debt that's been created by the financial system, not least of which comes from the government-sponsored entities Freddie (Mac) and Fannie (Mae). So, we continue to build a bigger and bigger balsawood edifice, which is the current state of our financial markets. And we have this giant anvil dangling from dental floss above the balsawood structure, with the anvil being our burgeoning debt and collapsing currency.

The outcome of this whole tragedy to me is quite clear: I believe that stocks will at some point collapse. Fixed income in all likelihood (though this is less clear to me) will get shredded, thanks to what's going on in the dollar. The dollar will be further bludgeoned, and, I think, metals will go to places we can't even conceive of. What I do not know is the timing of all that. When will stocks start going down? When will the currency decline matter to the fixed-income market? When will the metals really go crazy?

Price as barrier to re-entry
I came into this year with no shorts and just my long positions in metals, metals stocks and Annaly Mortgage (NLY, news, msgs).
Regrettably, I had reduced my position in foreign currencies before going away on vacation. They are all up smartly, so I have been left a little behind on that trade. I did the same with respect to my trading position in the precious metals. So, while I have the full complement of my position in Newmont Mining (NEM, news, msgs) and Pan American Silver (PAAS, news, msgs) (the latter of which I am a director), my trading positions in foreign currencies and precious metals have been reduced. With prices having gone basically straight up, it's been hard to add to these trading positions. I am currently wrestling with how much of the present action in these markets is a function of new money, a bit of a mini-blowoff to this piece of the move, or just the start of acceleration to a mini-blowoff.

In order of imperativeness, I am much more eager to expand my position in precious metals and currencies (though my personal stock position in Pan American and Newmont is quite sizable), than I am to get short stocks. As has been the case, I think we'll be making plenty of money being long currencies and precious metals before we make money being short stocks. I've done nothing basically because the environment is so binary (and all these trades are different expressions of the same view) that I feel no compunction to rush into anything, especially in the shorting-stocks department.

I would rather be late to that party than early, since it's so clear to me that when stocks go down next time, they're going to go down for real. I anticipate that we will see a huge decline, with the major averages falling over 50%.

Ferreting out before forging ahead
Though I feel that I know how this movie ends, I don't know quite where we are and what action to take yet. (That's another big reason for my inaction over the last few weeks). I am searching for clues as to what to do in all those markets, and I will share with readers what I think and do once I arrive at a conclusion. Of course, there's no guarantee that I will be right. But for what it's worth, this is my roadmap and strategy for the year that's all of two weeks old.

-- posted by Normxxx

Top 21. Feb 8, 2005 11:36 AM

» Kirk - 2/8/05 " Denial sets tech investors up for a fall"

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Posted by: Bearmove
Date:2/8/2005 1:31:43 PM
http://www.investorshub.com/boards/read_...

Denial sets tech investors up for a fall

Too many investors aren't facing facts: There's too much capacity in chips, computers and related hardware for the current demand. That spells trouble.

By Bill Fleckenstein

Hope and denial do not constitute a successful investing strategy. More money is lost by people listening to their emotions and ignoring facts than is lost because of just about any other influence. But no matter. That "strategy" has been operating full-throttle lately.

A case of mistaken extrapolation
Take last Monday, when investors decided to buy stocks because Iraqis had voted in large numbers the day before. Yes, the Iraqi election is a good thing for the world, in the form of seeds of a potential democracy being sown in that troubled country. That will be a good thing for humanity over time.

However, the election by itself does not mean an end to further chaos in Iraq, and it certainly does not preclude a civil war. (I am not forecasting this outcome, and I'm obviously not rooting for it. It is, however, a possibility.)

Even the best possible outcome -- that the election is a step toward democracy and a step toward undercutting terrorism -- is completely irrelevant to our stock market at this moment in time. Whatever good may accrue from positive developments in Iraq is quite a bit down the road and, in my opinion, not discountable by the stock market.

Just ask yourself this question: Do you know anyone who modified his or her behavior toward the economy or the stock market because of worries about the Iraqi election? I expect the collective answer to be an overwhelming "no," which shows clearly that the knee-jerk reaction of buying stocks is a classic example of decision-making driven by pure emotion.

Of end demand and heads in the sand
Where better to see this at work than in the tech-stock arena, where, for several quarters now, hope and denial have been doing their best to trump weak company fundamentals. Recently, however, fantasy ran headlong into sobering facts about end demand, in the form of earnings reports released on Jan. 27.

Problems have been reported across a broad range of tech sectors: PCs, via Gateway (GTW, news, msgs); networking, via Foundry Networks (FDRY, news, msgs); and contract manufacturing, via Sanmina (SANM, news, msgs) and Celestica (CLS, news, msgs). (The latter two, while not perfect indicators of end demand, can discuss what their customers -- who do contend with end demand -- are telling them.)

Gateway talked about slowing PC sales at Christmastime, as well as inventories in the channel. The company took down first-quarter guidance but, in a display of carrot-dangling, said its year would be fine. (To which I respond, "Yeah, right.") Since Gateway took market share, its competitors have a real problem. Hewlett-Packard (HPQ, news, msgs) appears set for a serious bruising.

Under tech's hood, things don't look so good

As for Foundry Networks, the company said its customers have slowed their purchases. That jibes with the suggestion made by onetime highflier Broadcom (BRCM, news, msgs) (before GERQY -- Jim Cramer's shorthand for Google (GOOG, news, msgs), Research in Motion (RIMM, news, msgs), Qualcomm (QCOM, news, msgs) and Yahoo! (YHOO, news, msgs) -- there was BERQY) that more than just an inventory problem might be at work. That obviously implies slowing demand from its networking customers.

No fleeing the food-chain flu
Sanmina was brutally honest, saying business really slowed down in December, the worst month of its quarter. The company specifically noted that it expected its PC business to be down 10% to 20% in the first quarter. Given what Gateway and Sanmina said -- combined with the reports out of Best Buy (BBY, news, msgs), Circuit City (CC, news, msgs) and CDW (CDWC, news, msgs), and what we'll probably soon hear from Hewlett-Packard -- how anyone can conclude that Intel (INTC, news, msgs) isn't about to be caught with its pants down is beyond my comprehension.

For those who haven't been paying attention, capacity utilization at Sanmina and Celestica is in the 60% range (as it is at the major semiconductor foundries: United Microelectronics (UMC, news, msgs), Chartered Semiconductor (CHRT, news, msgs) and Taiwan Semiconductor (TSM, news, msgs)). That's after writing off hundreds of millions of dollars and sacking thousands of employees. Still, there's too much capacity.

Minimal mirth for Maxim
Following on the same theme, chip darling Maxim Integrated Products (MXIM, news, msgs) successfully played "beat the number" when it reported earnings results last Tuesday night. That is almost laughable, however, after getting a good look under the report's hood. Maxim's bookings were less than expected and declined. Its backlog is down. The company's inventory, which rose, is now up enough that Maxim can fill 40% of its backlog for the next 12 months just with the inventory it has on hand.

Obviously, Maxim's margins were helped by building inventories. But this company and others like it are wedging themselves into a corner: They'll soon face simultaneous shrinking revenues and collapsing margins, and there will be a veritable implosion of earnings. That cake is baked, barring an explosion in GDP or a miraculous rebound in demand for tech doodads, neither of which I see in the offing.

So, we see bulging inventories at the chip level, at the contract-manufacturing level and at the original-equipment-manufacturer level. And the big chip foundries are operating at roughly 60% capacity -- at the very same time that we're seeing a slowdown in end demand on the retail front.

If chip and chip-equipment stocks were at extraordinarily low valuations due to folks' concern about these problems, you could maybe make the case that they'd be interesting to look at. But of course, the opposite is the case.

Valuations are quite high on a price-to-sales basis, which is how you need to look at these stocks. If you just focus on price-to-earnings, they seem slightly less expensive, but that's because margins have been plumped up (and I believe margins are going in the other direction).

Denial: Accelerant for market dislocation
Denial is as intense as any I've witnessed in the last few years, to the point where it's actually hard for me to capture it in words. Let me put it this way: The market's role as a voting machine, spurred by hopes and dreams, continues to overwhelm its function as a weighing machine.

All in all, the data points end up in the same place: Too much inventory and slowing end demand. Combine that with all the denial that's gone on so far, and you have a recipe for trouble. A huge dislocation is coming in the stock market at some point. Whether it starts soon or six months from now, I don't know, nor do I know what will set it off. But given the crater that stands between folks' expectations and company fundamentals, that dislocation will come with a vengeance.

Bill Fleckenstein is president of Fleckenstein Capital, which manages a hedge fund based in Seattle. He also writes a daily Market Rap column on his Fleckensteincapital.com site. His investment positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy, sell or hold any security. The views and opinions expressed in Bill Fleckenstein's columns are his own and not necessarily those of CNBC on MSN Money. At the time of publication, Bill Fleckenstein was short Hewlett-Packard and Maxim Integrated Products.

-- posted by Kirk

Top 22. May 17, 2005 12:05 PM

» Normxxx - It's not the hedge funds

Contrarian Chronicles: It's not the hedge funds, it's the Fed

By Bill Fleckenstein | 17 May 2005

Growing hedge-fund woes result from the Fed pouring too much cheap money into the economy. Also: United Airlines' pension default proves again that, in Corporate America, no one's word is worth much.

In light of last week's troubling hedge-fund headlines, I'd like to weigh in on the subject, beginning with the following point: Most "hedge" funds do no hedging at all. They're nothing more than leveraged investment partnerships, bearing no relation to the original concept as started by A.W. Jones more than 55 years ago.

Grounds for hedge heartache

In any case, with so-called hedge funds numbering 8,000, plus or minus, you can be sure of a couple things:

There aren't that many smart operators.

Many of the people running those funds will have stretched too far to try to make the returns they've insinuated.

The amount of deleveraging that may be taking place is not quantifiable or knowable at this moment in time, but deleveraging is a decidedly bearish occurrence for financial markets. It would explain the undertow that's been at work lately. And it might also explain why the current "no-news-period rally" -- the interval between quarterly earnings reports when, in the absence of bad news, bullish fantasy often reigns supreme -- has been as lame as it's been.

In short, there is a lot of smoke and, in all likelihood, some fire. Folks can anticipate no shortage of stories, both true and apocryphal, about problems created by hedge funds.

There are just too many stories about convertible-debt arbitrage problems, carry-trade angst, widening credit-default-swap spreads, etc. for some form of that not to be occurring. In addition, there are stories of brokerage firms raising margin requirements for various hedge funds.

The wellspring of financial woe

Of course, it's not the hedge funds that are the problem. They are only a consequence of the Fed's easy-money policies -- and its strategy of bailing out the financial distortions and accidents so engendered with even more easy money.

As I have stated before, the Fed is trapped. We've reached the stage where people are only beginning to awaken to that fact and its attendant ramifications, none of which will be pleasant. Therefore, every time you hear about these troubles and want to get upset at someone, my suggestion is: Think of Easy Al -- as all our financial problems can be traced back to him.

United Airlines dumps a payload

Turning to a depressing news item that's liable to become a trend: United Airlines has won the right to default on its pension plans. As the papers reported last Wednesday, the task of paying retirees their benefits will fall to the Pension Benefit Guaranty Corp. (PBGC).

Related news and commentary on MSN Money

In the future, I expect the PBGC to be overwhelmed with problems like this (for starters, think the rest of the airline industry and the auto industry). This means that taxpayers will ultimately be forced to foot the bill, because the PBGC's assets are nowhere near sufficient to fund all the liabilities foisted upon it (as in, it's short $23 billion and counting).

The plight that so many companies find themselves in has often been a consequence of shortsighted corporate management (i.e., playing beat the number). The little guy will be forced to pay for the mistakes of chieftains at the top, who have repeatedly skated away with zillions of dollars. (One could perhaps argue that some of these benefits were too rich to begin with, though I am not making that case.)

The flawed bankruptcy "system" is also part of the reason why many of these troubled industries continue to get more troubled, rather than healthier. The first one into bankruptcy gets a lower cost structure and ultimately starts a price war -- eventually dragging its competitors into bankruptcy as well. Given that all of this is occurring when times have been relatively good, one can only imagine the types of problems that will emerge when times get tough in the not-so-distant future.

United's pension default is a shocking reminder that in Corporate America, nobody's word is worth very much. A person can slave away his whole life for the company and then be informed: "We're not going to give you what we told you we would."

Faith-based insider buying

Finally, in the rarer-than-a-hybrid-solar-eclipse department, I note that an insider at a chip company has purchased stock in the open market. As I told Fred Hickey, editor of "The High-Tech Strategist," who brought this to my attention, I cannot remember that happening in the last five or 10 years in any of the big-chip names. Fred agreed.

Nonetheless, it happens to be true that about two weeks ago, Mort Topfer, former vice-chairman of Dell (DELL, news, msgs) and current board member of Advanced Micro Devices (AMD, news, msgs), bought 25,000 shares of AMD, adding to the 25,000 shares he previously purchased. I checked the insider filings, and he also has stock options to the tune of roughly 18,750 shares.

While 50,000 shares of a $14 stock isn't an immense amount of money, it's not chump change, either. More importantly, as I pointed out, it's a very rare occurrence for a chip insider to spend money on company stock. Obviously, as I've been saying all along in my daily column, Topfer didn't join AMD's board to watch it fail, and he's certainly not buying stock because he thinks the company's prospects are poor.

I continue to believe that AMD is going to be a real problem for Intel (INTC, news, msgs), and I recently added to my AMD position as well. Time will tell whether long AMD/short Intel is a winning strategy, but I am pretty excited about both sides of the transaction.

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only. Individuals should consult with their own advisors for specific investment advice.

-- posted by Normxxx

Top 23. Dec 28, 2005 10:58 AM

» Kirk - Intel's 'turnaround' will run aground

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Message #27667 from etchmeister at 12/27/2005 8:52:53 PM

No Fleckenstein update on Intel
Contrarian Chronicles
Intel's 'turnaround' will run aground

The improvements shown in the latest quarter aren't sustainable; here's why. And, yes, I’m short the stock.

By Bill Fleckenstein

It's the New Year, and I'd like to begin with an "old" theme: Intel, as an investment, is on borrowed time.

Regular readers just might have heard that before. And for newcomers to The Contrarian Chronicles, please see my Oct. 18 column, "Intel: All risk and no reward."

Before Intel (INTC, news, msgs) reported its fourth-quarter results, I knew that the quarter was not going to be a problem. That doesn't mean I understood why the company was indicating they were going to be doing so well in the fourth quarter, because I did not and I do not. Nevertheless, in light of everything I had been hearing, I did not expect Intel to have a problem in the fourth quarter.

But I bought Intel January 2006 puts recently because I think Intel's problems will be severe this year. I still believe they're producing too many parts for the level of end demand, and they're going to have to shut down some production. I believe that competition from Advanced Micro Devices (AMD, news, msgs) is going to be a real problem this year, and that will become clear once Dell (DELL, news, msgs) finally endorses AMD. And, I believe that the PC market is weak and getting weaker.

The cents that come from consensus

I also recognize that, in order to get paid, I need other people to come to my conclusion about Intel, which is why I opted to buy plenty of time with my January 2006 put position. My plan had been: Once Intel announced its quarter, to expand my position (my outright short position is very small) if the stock rallied on the company's waxing poetic (which it did), or if the stock declined because Intel started to get realistic (which it did not).

Intel's inventory enigma

Much was made of the fact that Intel whittled down its inventory. I spent a good deal of time trying to piece together their cost-of-goods-sold with the decline in inventories and the year-on-year increase in revenues. But I couldn't make the numbers tie out.

In a similar fashion, I cannot make Intel's revenues for the quarter tie out with the lackluster data we've seen from Best Buy (BBY, news, msgs), Circuit City (CC, news, msgs) and market-researcher NPD -- or any other circumstantial PC information I've been able to pull together.

In short, at least by my reckoning, the top line doesn't tie, and the numbers under the hood don't tie.

Fred Hickey looks under the hood

They also don't tie for my good friend Fred Hickey of the High-Tech Strategist, who, as I'm sure most folks know, is the best tech analyst by a mile. As Fred and I went through these numbers last Tuesday night, Fred correctly pointed out that in the past, when things had not tied out or when Intel was saying something that didn't fit with everything else, they paid for it the next quarter. In a brilliantly worded e-mail to me, he summed up his thoughts as follows:

"Early in 2004, when you and I were worried about the inventory buildup (as it was clearly a problem), Intel wasn't worried. Then in mid-year, Intel had an epiphany: They had an inventory problem (which led to the surge in cost-of-goods-sold and plunging margins, just as we had predicted). Now they're telling people on the conference call that they think they're a little light on inventory.

"This gibberish is from a company that had a very bad sales quarter in Q3 (which they didn't forecast) and then a very good sales quarter in Q4 (which they also didn't forecast). I can't think of another company that preannounces more often (both up and down). They've been the patron saint of bad forecasting for at least a decade. Why anyone puts any credibility into their forecasts is beyond me. And then to take their forecasts and apply it to the rest of the semiconductor industry -- even though it contradicts every data point we can find -- is sheer lunacy."

Looking askance at sustainable strength

Following up on what Fred had to say, what really matters is: Do you think the quarter that Intel had is sustainable? And do you think that Intel is telling you the whole truth and nothing but the truth about what's going on? It's no surprise that I don't think Intel's quarter is sustainable, nor do I think they're telling us everything that one might like to know about their inventory, cost-of-goods-sold, etc.

It is conceivable to me that they wrote down inventory in the third and fourth quarters. You can try to back into that by looking at the cost-of-goods-sold. This line item is up about $1 billion-plus year-over-year when the incremental sales should only put it up about $450 million, plus or minus. So, there is a large bulge of $600-$700 million in that quarter.

Similarly, in doing the math last quarter, I saw that their cost-of-goods-sold bulged by around $300 million, which at the time I thought was a write-off. On its call Tuesday night, Intel said that these changes were not caused by write-offs. Whether that's literally true or a function of semantics, I don't know, nor will we ever know.

The whiff of write-off

Another astute analyst friend of mine summed up the aforementioned $600 million to $700 million this quarter and $1 billion over the two quarters -- which he concluded was a write-off -- as follows:

"How can Intel write off between $600mm and $1bb of inventory, and then say their inventory position is lower than they would like it to be? Well, they can say whatever they want. But at the end of the day, the earnings call is also a 'sales' call. I think they're pulling a John Chambers special to preserve the notion of tightness in the market (aided and abetted by production snafus in certain parts) that's leading to double ordering, and potentially firmer pricing as well. Why they do this, I don't know, because it will always go the other way and make things worse (à la Q3 2004), but maybe they want to send Barrett out on a high note. . . ." (CEO Craig Barrett plans to retire in May.)

A 'revival' rings hollow

Back to the bottom line: One can choose to think this is the start of a big-time turnaround in Intel, the semiconductor-capital-equipment industry, the PC industry and chips at large. Or one can decide that this is some sort of anomaly that doesn't fit with anything else (recognizing that Intel has had anomalous quarters in the past). And in fact, Intel is one of the few companies I know that has preannounced both positively and negatively in the same quarter. As Fred noted, they are notoriously bad forecasters and not a good barometer.

I have made my bet with the Intel LEAPs I own and my Intel shorts, as well as my short in other chip stocks. My strong belief is that, by the time the first quarter is over, we'll see that however it occurred, the fourth quarter of 2004 was a complete outlier for Intel and that they are indeed on borrowed time. That is my view and I'm sticking to it.

Intel currently trading at $25.41
<img src=http://stockcharts.com/def/servlet/Sharp...

-- posted by Kirk