Thursday, April 17, 2008

Little gamble

I am not invested in AMD anymore. Thank god!

I wrote a while ago that AMD is a reactive position and since its future is determined not by its own actions, but the actions of other entities, I think those entities have too greater advantages to get information about the real state of the company as compared to "pedestrian investors" such as myself. Not only I still think the company is not viable, but I see plenty of confirmation in the latest events that this crisis may be of bankruptcy.

However, I think that I could indulge in a little gamble, since AMD appreciated over $6 due to Intel's results that dispel the economic crisis in the processor market (which I still doubt as explained in "Intel good investment?"), made me think that at least a portion of Intel's good results involve market share gains on AMD. That, together with the rather soft reaction to the news of 10% workforce reduction and worse than anticipated quarter, indicate that what it is to be announced today is ugly, so, I went ahead and acquired 5 may @6 puts at $0.40, just a little gamble. I do not recommend to do this play for anything but amusement, 'cos the implied vol. of those puts is astronomical.

Speaking of which, the reason I am not blogging much is because I am losing interest on the market, I am downsizing all positions: This business of the impending recession/depression is uncharted territory, so, it is difficult to anticipate what is Wall Street going to do to protect its money. I don't think I can perceive emerging trends and make money because just like it happened with Bearn Stearns, deux et machina a big player shows up and intervenes making irrelevant the market trends work; since I am not a Wall St. insider, I fear it will not be possible for me to guess exactly how Wall Street is going to protect itself.