Should my 19-yr-old Son by more Stock in AMD

fkkkjm

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AMD announced awesome Q3 earnings, a new graphics card and an acquisition that should help them grow in data centers -- All great news (unless you think they overpaid on the M&A). Anyways, stock is down this week big time. Broader market getting waxed as well. AMD P/E is skyhigh but so is Amazon -- expensive stock for sure, but man the market is a bitch..shoulda bought some protective puts.
 

dailybuck777

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Jan 2, 2018
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AMD announced awesome Q3 earnings, a new graphics card and an acquisition that should help them grow in data centers -- All great news (unless you think they overpaid on the M&A). Anyways, stock is down this week big time. Broader market getting waxed as well. AMD P/E is skyhigh but so is Amazon -- expensive stock for sure, but man the market is a bitch..shoulda bought some protective puts.
Down from a high of 87 to 76 (79 when my son queried me). Not a huge drop. As I am sure I said -- If he makes money great; If he loses money the lesson learned is worth the money.
 
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dailybuck777

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AMD announced awesome Q3 earnings, a new graphics card and an acquisition that should help them grow in data centers -- All great news (unless you think they overpaid on the M&A). Anyways, stock is down this week big time. Broader market getting waxed as well. AMD P/E is skyhigh but so is Amazon -- expensive stock for sure, but man the market is a bitch..shoulda bought some protective puts.
My son called me yesterday, being very enthused about new AMD products -- says they are better than Nvidia, which was supposed to be cutting edge. He was also aware of their recent purchase Suggested that I buy the stock. (Don't have the inclination to really follow it for my investment purposes now)

It is a good thing that he is so enthused about investing. Will learn a lot, no matter how his investment pans out.
 

Cosmos

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This week I bought puts to insure my entire portfolio from a general downturn in the market in the event Biden wins or the election ends up in the courts. I think it's money well spent. Currently I'm not putting any money into the market until after the election results are known. The markets hate uncertainty.

Except Wall Street wants Biden. Have you not seen their political contributions? Why. Because they want to continue this addiction to cheap Chinese-made stuff, and Trump is getting in the way of that. Also and as you know, options trading is time certain. Not a good strategy in times of uncertainty. Would be better to take some money off the table. But to each his own.
 

tboyer

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Yes and processor chips are going to remain incredibly competitive. ARM technology (used in phone CPUs and just starting to be used in Apple computers and cloud systems) is revolutionary and it remains to be seen how AMD will make use of ARM in its chips.

Intel is down right now but is a huge company with a lot of resources -- probably they will come back and come back stronger. So AMD is a great company, managed by a genius CEO, but the next 5 years could still be very different from the last 5 years because the competitive environment will be different.

My best advice is to buy stocks bases on macro trends rather than micro trends. AMD is hot right now because it’s beating intel, but the PC market is a low single digit growth business. The micro trend here is AMDs hot stock, the macro trend is a slow growth business that’s going to face increased competition from abroad.
 

dailybuck777

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Buck: I'd consider suggesting that he buy some Tesla, but then this thread could go on for pages. :cool:
Since someone reopened this thread recently, I will add that my son's Chinese Tesla (Nio) has gone up 6 times since he bought it a $9. (It is now $45). Glad he is making money but I am afraid that too good of a start can lead to overconfidence and losses down the road. Both of his stocks have done very well, and I am guessing that he is up something like $5-$10,000.
 

roswelllion

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What do you guys think of REIT stocks? Certain REITs, Hotel, Retail, office, mortgage, have lost quite a bit of value due to COVID-19. It seems that it’s only a matter of time until they bounce back so they could be relatively cheap buys these days if one is patient.
stay away
 

marisa45

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Hedge it. Have him buy AMD, NXPI and NVDA. They’ll all double over the next couple of years. The only problem is CHINA and their monopoly on Rare Earth. Course now that Biden’s in it shouldn’t be a problem.
 
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bdgan

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Buck: I'd consider suggesting that he buy some Tesla, but then this thread could go on for pages. :cool:
I've always wondered what Tesla has that can't be easily duplicated. The two things they have are batteries and auto pilot. The Ford Mustang Mach-E is coming out in a few months and it's going to be eligible for the $7,500 tax credit. I suspect they and others will have a pretty complete offering of EVs within 2 years. Tesla will continue to innovate but I'm curious if they will retain their position as the EV leader. Maybe it doesn't matter. Maybe the market will grow and their revenues will increase even if they lose share.
 
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roswelllion

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I've always wondered what Tesla has that can't be easily duplicated. The two things they have are batteries and auto pilot. The Ford Mustang Mach-E is coming out in a few months and it's going to be eligible for the $7,500 tax credit. I suspect they and others will have a pretty complete offering of EVs within 2 years. Tesla will continue to innovate but I'm curious if they will retain their position as the EV leader. Maybe it doesn't matter. Maybe the market will grow and their revenues will increase even if they lose share.

I would argue they have very little to build a "moat" around their business. The fanboys would suggest they have better battery technology. I wonder? On the dyno Tesla shows better range, In real world 3rd party tests they do not. The biggest "moat" they have right now IMO is Tesla's brand AND Musk's image.
They will most assuredly lose market share but the EV market due in large part to tax breaks [huge in Europe and China] and regulations against ICE vehicles is expected to increase as fast or faster than the lost market share.
Having said all that it is just about impossible to get a "traditional valuation" under any circumstance that justifies Tesla's stock price. As long as revenues grow profits do not matter and the fanboys will continue to hold up the price.
 

rutgersal

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I've always wondered what Tesla has that can't be easily duplicated. The two things they have are batteries and auto pilot. The Ford Mustang Mach-E is coming out in a few months and it's going to be eligible for the $7,500 tax credit. I suspect they and others will have a pretty complete offering of EVs within 2 years. Tesla will continue to innovate but I'm curious if they will retain their position as the EV leader. Maybe it doesn't matter. Maybe the market will grow and their revenues will increase even if they lose share.

Incidentally, I'm long F. Started buying at $6, its now $8.94, and i think its got a long way to go. They pulled out of the money losing car business and instead are focussing on EVs, SUVs, and Trucks. The new Bronco Sport is a hit and it looks like the new Bronco will be a hit as well, Ford looks well positioned for long term success.
 
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dailybuck777

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What do you guys think of REIT stocks? Certain REITs, Hotel, Retail, office, mortgage, have lost quite a bit of value due to COVID-19. It seems that it’s only a matter of time until they bounce back so they could be relatively cheap buys these days if one is patient.
They will eventually bounce back, but I still think there is a substantial downside. Personally, I would wait. Actions to foreclose mortgages have been discouraged and many businesses have gone under. Ultimately, I believe this hit to the general market has to be reflected in the real estate market -- although at least for now the residential market is very hot.

A substantial portion of what I do is real estate investing (private loans for residential rehabs) and my best educated guess is that there is an 80% chance of a very substantial downturn. Having made a good amount of money following 2008 crash, I am keeping my powder dry now.

Don't follow REITS that much but I would be worried that there is a trend away from working in offices as well a good chance of a substantial downturn which would hurt REITS even more in the near term. Any REIT you would invest in would need very intelligent and nimble management.
 

rumble_lion

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I've always wondered what Tesla has that can't be easily duplicated. The two things they have are batteries and auto pilot. The Ford Mustang Mach-E is coming out in a few months and it's going to be eligible for the $7,500 tax credit. I suspect they and others will have a pretty complete offering of EVs within 2 years. Tesla will continue to innovate but I'm curious if they will retain their position as the EV leader. Maybe it doesn't matter. Maybe the market will grow and their revenues will increase even if they lose share.

Interesting chart, the transition appears to be well under way.

613x-1.png
 

bdgan

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Interesting chart, the transition appears to be well under way.

613x-1.png
I thought profits were for losers and losses were for winners. XOM is losing a lot of money this year but their stock is in the tank. What went wrong?
 

stater02

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Dec 28, 2007
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Incidentally, I'm long F. Started buying at $6, its now $8.94, and i think its got a long way to go. They pulled out of the money losing car business and instead are focussing on EVs, SUVs, and Trucks. The new Bronco Sport is a hit and it looks like the new Bronco will be a hit as well, Ford looks well positioned for long term success.

I love Ford. Bought at 6, sold at 9. Bought back in at $8.65 after a small dip. It saw mid $10+ this week. I will throw another couple thousand at it next week.

AMD stumbled this week on news that Intel replaced their CEO. It’s going to take a year for them to turn that battleship. AMD may still back up with this small market pullback, but I like it to get to $125-$140 by late summer.
 
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Nbergbuck

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Mar 31, 2004
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Thanks much for your insights. Do you know what the earnings per share (I am assuming expected increases) are?
This is the advice I game my sons who are a bit older but in the same generation. Buy index funds, preferably total stock index funds.
 
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bdgan

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My son is very involved in film making and believes that AMD computer chips are much higher quality than Intel Chips and that the AMD chips are much more economical. He bought a $1,000 worth of AMD at $31 per share and it is currently worth about $79 per share. He is thinking of buying another $5,000 worth of the stock. (He has about $30,000 of his own money -- mostly given to him by his Chinese aunt and uncle)

I am leery of buying stock on a strong upswing, but people have obviously done well with stocks like Apple and Amazon which have gone up and up and up. In any event, without much knowledge of this stock on my part, I am currently neutral. If people have ideas or special knowledge of AMD or the computer industry, I would like to hear their suggestions.
People buy a stock because they think it's going up. The problem is they're buying it from somebody who thinks it's going down. There's a lot of information available out there and people who think they can out guess the masses are usually wrong.
 
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dailybuck777

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People buy a stock because they think it's going up. The problem is they're buying it from somebody who thinks it's going down. There's a lot of information available out there and people who think they can out guess the masses are usually wrong.
I agree with that 100%. That is the lesson my children have to learn.
 

fkkkjm

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I agree with that 100%. That is the lesson my children have to learn.

a lot of the time this is true, but not always. There are lots of reasons to sell stock you don’t think is overvalued

Portfolio rebalancing
Tax purposes
Liquidity - retirement income, cover margin calls,
Day trading on technical analysis.

People need to make a judgement call : is the intrinsic value of a share worth more or less than the price. The market is efficient but far from perfect.
 
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PSUSignore

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Just to recap... BTC is at 60k. Was at 10kish. So 6x return.

AMD... down about 20 percent.

LdN
Even a simple S&P 500 index fund is up 15% from the date of the OP. Just my opinion, but I'll take the slow, steady lower risk and low expenses index fund approach all day.
 
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bdgan

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a lot of the time this is true, but not always. There are lots of reasons to sell stock you don’t think is overvalued

Portfolio rebalancing
Tax purposes
Liquidity - retirement income, cover margin calls,
Day trading on technical analysis.

People need to make a judgement call : is the intrinsic value of a share worth more or less than the price. The market is efficient but far from perfect.
Two stories:
  1. Back in the late 70s I saw a player for the Jets come back from knee surgery in just a few weeks. They did this new thing called arthroscopic surgery which was less invasive and allowed for quick recovery. I invested in a company that was a leader in the cameras used for this type of operation because I saw it as the future. Arthroscopic surgery took off just as I expected but my company went out of business in about 3 years.
  2. I have a friend who ran a mutual fund for a bank. One day I called him about a golf date and took the opportunity to ask him what was new. He tells me that he was working with an analyst in Texas who turned him on to this company in California who manufactured eximer lasers used to create smaller feature sized in semiconductors. What a small world. I knew more about this company than he did because my company manufactured the key component that went into the lasers. In this case the laser company did very well because they were eventually acquired by ASML. The point of my story is that a mutual fund manager and his analyst didn't know as much as I did.
Thousands of people have access to the same information. It's extremely difficult to outguess the masses. There's a reason why most mutual funds underperform the index. IMO it's much better to stick with broad market ETFs. The exception would be if you can get bargain prices on a stock through an ESOP plan, stock options, or stock grants.
 
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The Spin Meister

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An altered state
A couple of considerations. Several chip makers....Intel, Samsung, and Taiwan Semiconductor.....are going to spend over $40 billion in the next five years buildings chip plants in the US. Phoenix Arizona has already been selected for two plants of $12 billion each. That means they will be state of the art facilities and AMD will have to keep up.
 

bdgan

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A couple of considerations. Several chip makers....Intel, Samsung, and Taiwan Semiconductor.....are going to spend over $40 billion in the next five years buildings chip plants in the US. Phoenix Arizona has already been selected for two plants of $12 billion each. That means they will be state of the art facilities and AMD will have to keep up.
You know that and so does every other investor/analyst. That knowledge is already baked into the stock prices.
 

The Spin Meister

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Nov 27, 2012
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An altered state
Two stories:
  1. Back in the late 70s I saw a player for the Jets come back from knee surgery in just a few weeks. They did this new thing called arthroscopic surgery which was less invasive and allowed for quick recovery. I invested in a company that was a leader in the cameras used for this type of operation because I saw it as the future. Arthroscopic surgery took off just as I expected but my company went out of business in about 3 years.
  2. I have a friend who ran a mutual fund for a bank. One day I called him about a golf date and took the opportunity to ask him what was new. He tells me that he was working with an analyst in Texas who turned him on to this company in California who manufactured eximer lasers used to create smaller feature sized in semiconductors. What a small world. I knew more about this company than he did because my company manufactured the key component that went into the lasers. In this case the laser company did very well because they were eventually acquired by ASML. The point of my story is that a mutual fund manager and his analyst didn't know as much as I did.
Thousands of people have access to the same information. It's extremely difficult to outguess the masses. There's a reason why most mutual funds underperform the index. IMO it's much better to stick with broad market ETFs. The exception would be if you can get bargain prices on a stock through an ESOP plan, stock options, or stock grants.
Had a friend years ago that was telling people to buy a couple high tech stocks. I knew very little about them....knew the names and what they did but didn’t know enough to understand how they would change their field. He bought them early on and continue to buy over the years. He retired at age 45. Runs a farm with his father and brother. Buys up farms all around when they go up for sale and pays cash.

Those stocks he bought? Microsoft and Apple.
 
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fkkkjm

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Two stories:
  1. Back in the late 70s I saw a player for the Jets come back from knee surgery in just a few weeks. They did this new thing called arthroscopic surgery which was less invasive and allowed for quick recovery. I invested in a company that was a leader in the cameras used for this type of operation because I saw it as the future. Arthroscopic surgery took off just as I expected but my company went out of business in about 3 years.
  2. I have a friend who ran a mutual fund for a bank. One day I called him about a golf date and took the opportunity to ask him what was new. He tells me that he was working with an analyst in Texas who turned him on to this company in California who manufactured eximer lasers used to create smaller feature sized in semiconductors. What a small world. I knew more about this company than he did because my company manufactured the key component that went into the lasers. In this case the laser company did very well because they were eventually acquired by ASML. The point of my story is that a mutual fund manager and his analyst didn't know as much as I did.
Thousands of people have access to the same information. It's extremely difficult to outguess the masses. There's a reason why most mutual funds underperform the index. IMO it's much better to stick with broad market ETFs. The exception would be if you can get bargain prices on a stock through an ESOP plan, stock options, or stock grants.

I have a lot in VOO, so agree with you that it is a safe diversified approach. However, there are still pockets of behavioral finance at play. Why did Target stock shed $20 per share when they announced a huge Capex plan, only to have the stock bounce right back in 30 days? I made some nice money on that dip. Obviously other big institutional folks did too, since the price came right back. There are pockets of opportunity if you want to day trade - just don’t get out in front of your ski’s.
 

rumble_lion

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A couple of considerations. Several chip makers....Intel, Samsung, and Taiwan Semiconductor.....are going to spend over $40 billion in the next five years buildings chip plants in the US. Phoenix Arizona has already been selected for two plants of $12 billion each. That means they will be state of the art facilities and AMD will have to keep up.

That means they will be state of the art facilities and AMD will have to keep up.

Uh, no. AMD does not manufacture chips.

Intel is the one that is in trouble as they haven't been able to move to the new smaller circuit sizes despite spending billions of dollars trying. Intel is the one that hasn't been able to keep up.
 

bdgan

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May 29, 2008
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I have a lot in VOO, so agree with you that it is a safe diversified approach. However, there are still pockets of behavioral finance at play. Why did Target stock shed $20 per share when they announced a huge Capex plan, only to have the stock bounce right back in 30 days? I made some nice money on that dip. Obviously other big institutional folks did too, since the price came right back. There are pockets of opportunity if you want to day trade - just don’t get out in front of your ski’s.
VOO is good but it olnly tracks the S&P 500. I prefer a broad market index that includes some mid and small cap companies.

According to the stock platform Etoro, they found that a whopping 80% of day traders lose money over the course of a year with the median loss of -36.30%! It's no surprise more than 75% of all day traders end up quitting within just two years.
 

rumble_lion

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I've always wondered what Tesla has that can't be easily duplicated. The two things they have are batteries and auto pilot. The Ford Mustang Mach-E is coming out in a few months and it's going to be eligible for the $7,500 tax credit. I suspect they and others will have a pretty complete offering of EVs within 2 years. Tesla will continue to innovate but I'm curious if they will retain their position as the EV leader. Maybe it doesn't matter. Maybe the market will grow and their revenues will increase even if they lose share.

The Ford Mustang Mach-E is coming out in a few months and it's going to be eligible for the $7,500 tax credit.

Unless something has changed, Ford is planning on building 50,000 Mach-E's the first year. Most of those are going to Europe to help them meet emissions requirements.

Hopefully it turns out to be a great car and they figure out how to scale up production.
 

rumble_lion

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I would argue they have very little to build a "moat" around their business. The fanboys would suggest they have better battery technology. I wonder? On the dyno Tesla shows better range, In real world 3rd party tests they do not. The biggest "moat" they have right now IMO is Tesla's brand AND Musk's image.
They will most assuredly lose market share but the EV market due in large part to tax breaks [huge in Europe and China] and regulations against ICE vehicles is expected to increase as fast or faster than the lost market share.
Having said all that it is just about impossible to get a "traditional valuation" under any circumstance that justifies Tesla's stock price. As long as revenues grow profits do not matter and the fanboys will continue to hold up the price.

I would argue they have very little to build a "moat" around their business. The fanboys would suggest they have better battery technology. I wonder? On the dyno Tesla shows better range, In real world 3rd party tests they do not. The biggest "moat" they have right now IMO is Tesla's brand AND Musk's image.

Tesla is trying to figure out how to build a million car battery packs in 2021. Most of the others trying to figure out how to build 50,000.

They will most assuredly lose market share but the EV market due in large part to tax breaks [huge in Europe and China] and regulations against ICE vehicles is expected to increase as fast or faster than the lost market share.

And the EV's are just better cars than the ICE vehicles at the same price point.

Having said all that it is just about impossible to get a "traditional valuation" under any circumstance that justifies Tesla's stock price. As long as revenues grow profits do not matter and the fanboys will continue to hold up the price.

Well if you think the future is EV's then they best bet right now.
 

bdgan

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I would argue they have very little to build a "moat" around their business. The fanboys would suggest they have better battery technology. I wonder? On the dyno Tesla shows better range, In real world 3rd party tests they do not. The biggest "moat" they have right now IMO is Tesla's brand AND Musk's image.

Tesla is trying to figure out how to build a million car battery packs in 2021. Most of the others trying to figure out how to build 50,000.

They will most assuredly lose market share but the EV market due in large part to tax breaks [huge in Europe and China] and regulations against ICE vehicles is expected to increase as fast or faster than the lost market share.

And the EV's are just better cars than the ICE vehicles at the same price point.

Having said all that it is just about impossible to get a "traditional valuation" under any circumstance that justifies Tesla's stock price. As long as revenues grow profits do not matter and the fanboys will continue to hold up the price.

Well if you think the future is EV's then they best bet right now.
Car and Driver EV rankings:
1. Hyundai Kona
2. Mustang Mach E
3. Tesla Model 3
4. Chevy Bolt
5. Volkswagen ID.4
6. Kia Nero

Tesla has a head start but competitors are coming quickly. Tesla hasn't been profitable w/o govt credits but competitors might not be profitable either. They will have the advantage of the $7,500 tax credit and local dealerships.

I'm a Tesla fan but I don't think it's a slam dunk that they're going to be the most dominant player long term. New EVs expected within a year include: Audi Q4, BMW i4, BMW iX, and Cadillac Lyriq. Time will tell.
 
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SoParkLion

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Sep 23, 2001
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Realize that in that in the stock market, you are essentially playing chess against a few hundred people with degrees in finance, years of experience, and a lot more resources than you do...