I can imagine that you are all very wise and know how and know well but with stock market there so many variables. Any person who is playing stock will tell you that there so many things that will influence stock market and of course things that you wont be able to predict that will have which may have a huge impact on the stock for this or other company. I got a lot of savings in the stocks and play it recently. Maybe you have a different approach but nobody will tell you that the forecast is 100% accurate. just like weather. I think you have missed the point of my previous post but that's ok
But that's the whole point of forecasting. A 100% sure result is not available - that's why we're estimating the outcome
.
You're way to concentrated on "playing stock" (why not analyze instead of playing?
).
Sure, there are many variables, but it's still just a dynamical system. It can be analyzed, quantified and forecasted just like anything else.
Stock investing is not easy, but it's still just a job: people can be trained to do it - just like they're trained to make pasta or design CPUs.
So going back to the Intel/AMD thing.
In a very general case, you have 3 components of a price time series: a background (general market or segment condition), fundamental trend of the company and noise coming from trading.
1) Unless you're interested in day-trading, you want to exclude the "noise" part (and you learn how to do that during your math studies).
2) Then there's the backgound. Intel and AMD make similar products, are registered in the same country and are listed on the same stock market. The key difference is in manufacturing. Intel makes their chips and it's mostly done in USA (a bit in Israel). AMD outsources production to companies outside US (Germany and Taiwan) - this sometimes can have an effect on the stock, but nothing dramatic.
3) And now we get to the trend. Honestly, there are many ways to analyze this (fundamental and technical), but this is simply the value of the company, i.e. a present value (PV) of future cashflows.
If you look at the simplywall.st link I've posted earlier, you'll see that AMD is priced well above PV at this point. In other words: it'll need something extraordinary to reach these expectations (e.g. getting +10% market share in server CPUs). This may happen or not. Personally, I try not to bet my saving on "may happen", so I'd at least wait until they release Naples and it delivers what they promised.
Also think about scale. AMD and Intel fight for the same amound of sales in CPU markets. But since Intel is 15x larger, the price changes will be 15x smaller (more or less).
Looking at the last year (since June 2016) Intel is +14%, AMD is +160%. Without Zen hype, Intel stock could get to +20%, but this was still a great year for Intel investors, as they're "just" +44% over last 5 years.
As an investor I'm simply not ready to take the risk of buying AMD at this point.
If Naples performs under expectations (in sales, not in benchmarks), the stock will go down by maybe 20%.
If total Zen sales (including consumer stuff) are poor, the stock could be down 50% or more.
Just think about the scenarios that could make Intel stock drop by 50%: III World War, end of Internet, proof that semiconductors cause unwanted pregnancy, AMD CPUs work without power supply.
I can live with that. ;-)
