Any thoughts on a long term (2+ years) short of ARMH started some time this year? They basically own the design for a particular and commonly used type of low power mobile processors used in most current phones and tablets, but long term I don't like their prospects. The upside is limited by mobile device growth. There isn't big money in licensing (hence their P/E of 83) and Intel is going to catch up and exceed them because Intel are soon (next six months) going to have better performance at a similar price point, which will eventually remove ARM designs from the market in favor of more powerful and versatile and cross compatible x86. Increasing miniaturization and battery power are going to further make ARM's limited low power designs irrelevant. And they don't have the talent, integration, profit possibilities or unique abilities of other chip makers - they're a designer and licenser.

I think this idea is very likely to be +EV overall, but only marginally.
ARM is currently taking market share away from INTC in the server space (which has much higher margins) and they dominate the mobile market because INTC never bothered with it, and INTC recently transitioned to a new CEO. If ARM continues to take server market share from INTC, then the present price is justified, even if INTC captures some of the lower margin mobile market away.

Thanks for a very useful answer.

Perhaps the following changes things. Intel launched Silvermont late yesterday, which has taken five years and looks like enormous news. The specs make ARM processors look very inferior in mobile, tablet and server spaces for both performance and power use. Intel have also outdone their previous low power Atom by 3x in peak performance and 5x in lower power usage, which is very big news for Windows products. As far as ARM goes, this is the key image:



Without a response, and there won't be one in time, that's game over for phones and tablets.

From their press release it looks like Intel are deliberately targeting servers as well with low power configurations which outperform ARM by a big margin. Dell doesn't think that ARM will move serious numbers in the server space until 64 bit chips in 2014, and by then it's too late, as there's an enormous ecosystem around x86-64, and with upcoming Intel chips being cheap and superior on both power and performance, there's no reason to buy ARM chips and many reasons not to.

I don't know what this development means for Intel, but for MSFT this seems like very positive news (x86 is finally viable in a tablet/phone format; the Windows ecosystem can finally viably embrace these form factors) and for ARMH this seems like pretty bad news.

I'm actually working on BayTrail which your article link mentions. Definitely cool technology. Wish I could say more.

INTC has always been a generation ahead of its competitors, and I see that as more of mantaining that lead rather than doing anything special that should cause ARM any concern. ARM will still take the cheaper lower end market, especially since the only other player, AMD, is in the process of FOADing.

Look at ARM's past 5 years and price history; they've had some pretty good successes, from both AMD dropping the ball and INTC not bothering with the low margin mobile space. Although I think it could still be +EV to short ARM because I don't think they will continue to take away market share from the server space (INTC is not going to let ARMH just take away its cash cow), I just don't really like the idea of shorting the only real competitor left in the industry. I might do it if I had some extra cash and felt like being speculative. There just has to be easier ways to make money than doing this.

Intel definitely wants to be a factor in mobile computing including smartphones. They have made some inroads outside the US.

Bought LEE one week ago, had a good day with DXM.

Yay SIAL hit it`s all time high today after bouncing off it for a couple days(got in quite cheap at around 72)

How do you track his holdings?

Anyone looking at the Precious metals miners? Seem like they are probably the primo value play right now.

Hello all new poster here. I am currently invested in AIG, INTC, CA, BBL, RDS, and WFC. Im a graduating college student so the amount invested in these companies is relatively small. My question is that I am worried about the systematic risk in the market. Assets are being propped up by QE money and when that stops, and interest rates rise, stocks and other assets should retreat. Any thoughts on this? Or is this already priced in?

Aren't their fortunes tied to the value of metals in a big way?

Yes it's priced in, but no that doesn't mean you're protected from systemic risk. To protect yourself from systemic risk in the market, you have to invest in assets that are outside the market.

Yes.

Welcome, at least a couple of those (the ones I know) are good choices imo.

Assuming the thesis on QE is correct (plenty of smart people agree with it) I don't think the market does price in the end of QE. The whole point of QE and low interest rates is that people have lots of spare money around and they want it to return more than 0%. So it goes into the stock market. When that changes, it goes out. There's no way to price that in.

My solution is to very cheaply short (~5% of portfolio) low volatility or ugly looking stocks using 2 month - 2 year puts to cap my potential losses to ~10%, and profit from a decent sized crash. There are other ways.

Truthsayer, thank you for the prompt reply. Unfortunately, options are not an option for me now (don't have a margin account). I was thinking about shaving a bit off my positions but I dont want to incur the fees and taxes (Im quite a bit in the green on AIG and its the only one of my bunch thats not in an IRA.) i have a long term value investing philosophy so I prefer to just do nothing. However, the recent runup and the end of QE looming makes me want to protect my profits. Fish thinking?

2 days ago Warren Buffett was speaking to CNBC and he said (paraphrased):

"I bought a farm in 1985 and haven't had a quote on it since. I bought a piece of real estate in New York in 1992 and haven't had a quote on it since. I look to the performance of the assets. Maybe my farm and my piece of real estate have had pullbacks, but I don't even know about it. People pay way too much attention to the short term. If you're getting your money's worth in a stock, buy it and forget it."

People pay far too much attention to Buffett too. It is well-knows that he usually does the complete oppositre fo what he says.

The other day he was talking about how bad bonds are to own, yet guess how much BRK-A has?

That`s an incredible stupid quote.

I think the context was that people buy companies and then worry about their price quote everyday.

I'm a fan of Buffett. I still have a lot that I'm trying to learn. Maybe I'm just naive to what he does, though.

What exactly is stupid about the quote?

Tesla went up 26% today following their Q1 results, EPS was expected to be .04 and came in at .12. Tesla was also awarded a 99 out of 100 by consumer reports (highest rating for a car company ever) today. It is now trading at about $70/share and many analysts have set price targets between $100 and $200.

I'm a huge fan of renewable/carbon neutral energy and own a few different stocks in this segment. What do you guys think of Tesla's long-term viability? Seems like they have a bright future as they began developing their less expensive models and now have proven to be profitable. Even though the Model S is quite expensive now, you do save a fair bit of money in gas by buying one (depending on how much you drive) as well as a $7,500 tax credit from the federal gov't (and additional credits from a number of states).

The major downside right now is charge times and taking road trips, which wouldn't affect me personally but I could definitely see the downside for someone who drives 200+ miles day or makes long trips frequently.

It is a lot more difficult to make a car cheap to get the kind of growth they expect. If they can get decent range in a car less than $30k, and make money, then they'll make a lot.

Also why are we talking about a growth company in a value thread?

News are so important you just can`t sit back and chill nowadays. That`s maybe possible with a stock like Coca-Cola or McDonalds.


My Stocks performing really well:

SIAL up 8% since I bought them last month. ACET just jumped around 10% this morning after the Earnings-Announcement, up 6.5% at the moment but I feel like it`s gonna hit it 52 Week-High sometime this month.

edit: Just saw that SIAL broke trough 80$ after it bounced off it yesterday. (Dance)

Max,

Phil Goldstein runs Bull Dog Investors and while he's gone activist in 2 positions I've been involved in (GYRO and IFT) he typically focuses on closed end funds. As you may know closed end funds often trade at fairly large discounts to NAV. Goldstein simply tries to get them close the gap by doing tenders etc.

He has a fund called SPE (fund of closed end funds) he himself has a super low management fee but of course the funds he is buying don't necessarily. I use SEC.gov for most of my research.

By the way over the last couple days sold out of IFT (entry was in the low 3s) and SILC (SILC probably still has a ton of room to run though). Really like BCOR -- I think someone talked it up recently -- but if the market decides to give the TaxAct business a better multiple It can really move.

I'm building a position in a couple of other small caps if I get around to it I might mention them here when I'm done.

Tesla shoudl really not be in this thread (IMO) , but a good growth company can be an excellent value.

Also I'm sure there are great compounders I'd like to own for the next 10-20 years -- but man -- I think the talent/skill/knowledge/luck to identify those without hindsight is much harder than finding companies with temporarily depressed values. I'd love to find my GEICO.

Yeah but thats not the right context. Ofcourse news/the evolution of a company matters. Its not that buffet never sold any of his holdings.