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What Happened to Cash-King?
The Weekly News
Intel speeds up Celeron line
By Rob Landley ([email protected])
Austin, TX (Dec. 22, 1998) -- Winter has finally arrived in Austin, and the weekly news has finally arrived in the Rule Maker portfolio. Wall Street's haggling pits were a bit distracted last week by the impeachment of the president and the bombing of Iraq, but they managed to agree on some semi-random short-term prices at which they'd be willing to buy and sell shares of our companies anyway. Let's see where the roulette wheel stopped, shall we?
Intel (Nasdaq: INTC) had a lot of news. It's working to speed up its Celeron line (what a surprise) to defend against vigorous low-end competition from companies like Advanced Micro Devices (NYSE: AMD) and National Semiconductor (NYSE: NSM). Personally, I still think the whole Celeron line is a horrible idea, a distraction from Intel's original market advantages of the best price to performance ratio and rapid product cycle time due to manufacturing skill. All of Intel's products start at the high end and migrate to the low end during their life cycle. Starting a product at the low end is just dumb. Intel can drive AMD out of business anytime it wants to by cutting prices, but Intel allows its competitors to thrive and grow in order to maintain margins.
Still, so far the company has successfully maintained its margins without much impact on volume, so I can't complain too much. But I think revving the development cycle faster and migrating the high end chips down to the low end more rapidly is a better idea than backing up the flow with Celerons, unless Intel is worried about its ability to produce new high-end processors like Xeon and Merced.
Speaking of new high-end processors, new developments are occurring on what techies refer to as "the bleeding edge." (That's beyond the "cutting edge" -- technologies into the stuff that doesn't reliably work yet.) This article is about the successful testing of photonic circuitry at a university lab. You know how fiber optics are a heck of a lot better than copper wire for carrying data? Well the same thing applies to photons vs. electrons in microchips, but it's still years away from mass production. Still, the process will probably interest Intel well before our ten year holding period comes up for renewal.
The new Diet Coke advertising campaign is a cross-promotional deal with several book publishers. It features sneak peeks at new romance and suspense novels, excerpts of which will appear in Coke's packaging. Coke continues to sell itself, but The Coca-Cola Co. (NYSE: KO) is doing its best to help the process along.
A sales analyst at Prudential initiated coverage of T. Rowe Price (Nasdaq: TROW) on Friday. Ooh. Wow. How do we get them to stop again? The TROW dividend will be 10 cents per share for everyone who owns the stock as of December 28, with the checks mailed out on January 12.
Finally, Cisco (Nasdaq: CSCO) had a good day Friday, announcing the availability of new software: IOS version 12. Cisco was the subject of a recent "Dueling Fools," which is worth a read and you can vote for the better argument at the end of it.
Personally, I'm out of eggnog. I think I'll go make some tea instead (British style, with milk in it, of course,) and try very hard to catch up on our strategy board. Beats going outside, it's COLD out there.
|Recent Rule Maker Portfolio Headlines|
|12/28/00||Cisco's Aggressive Call|
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Stock Change Bid AXP + 7/8 101.63 CHV - 1/4 83.75 CSCO - 7/8 93.81 KO +1 11/16 67.44 GPS +1 3/16 52.31 EK - 9/16 73.44 XON + 1/8 74.94 GM + 3/16 73.88 INTC -3 5/8 119.06 MSFT -2 138.44 PFE +2 1/8 117.19 SGP +1 1/16 53.44 TROW + 1/4 36.00
Day Month Year History R-MAKER +0.24% 6.08% 29.16% 29.16% S&P: +0.06% 3.43% 19.64% 19.64% NASDAQ: -0.80% 8.79% 27.28% 27.28% Rule Maker Stocks Rec'd # Security In At Now Change 2/3/98 24 Microsoft 78.27 138.44 76.87% 6/23/98 34 Cisco Syst 58.41 93.81 60.61% 5/1/98 55.5 Gap Inc. 34.06 52.31 53.59% 2/3/98 22 Pfizer 82.30 117.19 42.39% 2/13/98 22 Intel 84.67 119.06 40.61% 8/21/98 44 Schering-P 47.99 53.44 11.34% 2/6/98 56 T. Rowe Pr 33.67 36.00 6.91% 5/26/98 18 AmExpress 104.07 101.63 -2.35% 2/27/98 27 Coca-Cola 69.11 67.44 -2.42% Foolish Four Stocks Rec'd # Security In At Value Change 3/12/98 20 Exxon 64.34 74.94 16.48% 3/12/98 20 Eastman Ko 63.15 73.44 16.30% 3/12/98 17 General Mo 72.41 73.88 2.03% 3/12/98 15 Chevron 83.34 83.75 0.49% Rule Maker Stocks Rec'd # Security In At Value Change 2/3/98 24 Microsoft 1878.45 3322.50 $1444.05 6/23/98 34 Cisco Syst 1985.95 3189.63 $1203.68 5/1/98 55.5 Gap Inc. 1890.33 2903.34 $1013.01 2/3/98 22 Pfizer 1810.58 2578.13 $767.55 2/13/98 22 Intel 1862.83 2619.38 $756.55 8/21/98 44 Schering-P 2111.7 2351.25 $239.55 2/6/98 56 T. Rowe Pr 1885.70 2016.00 $130.30 5/26/98 18 AmExpress 1873.20 1829.25 -$43.95 2/27/98 27 Coca-Cola 1865.89 1820.81 -$45.08 Foolish Four Stocks Rec'd # Security In At Value Change 3/12/98 20 Exxon 1286.70 1498.75 $212.05 3/12/98 20 Eastman Ko 1262.95 1468.75 $205.80 3/12/98 17 General Mo 1230.89 1255.88 $24.98 3/12/98 15 Chevron 1250.14 1256.25 $6.11 CASH $120.62 TOTAL $28230.53 *Please note: On 8/4/98 $2,000 cash was added to the
portfolio. $2,000 will be added every six months.
*The year for the S&P and Nasdaq is as of 02/03/98
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