Post of the Day
October 19, 2000

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Rambus

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Subject:  Amazing Positivity
Author:  dripton
This board is really entertaining.

Intel's CEO Craig Barrett (not a mere VP like some of you think) said some negative things about Rambus to the Financial Times.

This board took a very short time to go from denial (get that market-manipulating FUD out of here, infidel!), to acceptance (Intel really is bashing Rambus, but that's okay because they're just covering up their own screwups), to glee (Rambus is gonna hit Intel up for big SDRAM royalties, and they're gonna win.) The possibility that Rambus's biggest partner bashing the company might be a warning of really bad news ahead seems to have been ignored. (Not just here: the stock was up today.)

Someone posted a two-year-old article about AMD signing a license agreement for RDRAM. Several people recommended the post or responded gleefully before anyone noticed that it was two years old.

My point? This board seems incredibly quick to believe anything positive, no matter how unlikely and silly, and incredibly hesitant to believe anything negative, even if it comes from a very trustworthy source.

I saw a lot of this cheerleading attitude from AMD investors in the spring. The stock had gone up 500% in less than a year, with no end in sight. Why not margin to the limit and then buy some calls on top of that? Free money, right? Needless to say, things are a lot more sober these days, with the stock back down, even among those who still strongly believe in the company's chances.

I saw, and still see, a lot of the same cheerleading attitude among Intel longs. Intel has provided great returns for a long time, therefore it will always provide the same returns. News doesn't matter. Competition can't exist, because Intel is a Gorilla. Every dip is a buying opportunity. There's no need to analyze what the company's doing, because it can do no wrong. People with differing opinions can't be right, so ignore them, shout them down, and get them banned from the board.

Don't drink the Kool-Aid, or the bus's brake fluid for that matter. It's a stock, not a cult. Try to get your news from a variety of independent sources. Try to pay attention to all of it, even the negative parts. Consider what might happen if you're wrong. It might save you some serious money.

Oh, and congrats on the strong earnings report.


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