Tuesday, September 26, 2006

Buying Intel...and clarifying the blog a little:


First off...just shipped in some Intel...$19.96 was the offer, I bought
£20/tick = ~£20,000 of stock.

Why? Because lets face it, there are 2 chip companies in the world,
Intel and AMD. And Intel is the one that GENERICALLY people want in
their machines...yes I know IT geeks may say AMD is
cheaper/faster/better, but Intel marketing has made it a must have. And
Microsoft are on the verge of releasing its new Vista operating system,
meaning a necessary (probably) upgrade of computers worldwide. How can
Intel fail to make money in this scenario?

Also I continue to believe in a revolution for braodband communications,
where anyone anywhere will be able to connect wirelessly to the
'net...and that equals more computer demand = higher chip sales.

Also I am nervous on being too short the equity markets...while I think
they will go down as the US slowdown unfolds, I have played in enough
markets in my time to know they can get irrational for long enough to
make it unbelievably painful having the wrong side of the "right" (ie.
sensible) trade. At the moment, I am short ~£132,000 of S&P futures and
£111,000 of DOW futures (through my sale of 11,500 calls)...so £243,000
of equity. Against that I am now long £162,000 of individual stocks
(£51k BT, £40k Pipex, £28k IAC Corp, £23k Cisco, £20k Intel). I would
like to maintain a bearish bias, and try to outperform with individual
stocks.

And finally...I am going to simplify my description of trades...since
not all of you will be spreadbetting, I'll reference the spot price of
whatever I trade rather than the price of a certain contract date, as in
the Intel above. Although I will be keeping an exact track of my P+L.

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