Originally Posted by kaiser_soze
I thought that this was an excellent article, and I am surprised at the number of people who, judging from their comments, seemed not to "get" it.
I would not want to try and reduce something expressed this eloquently to a few simplistic "takeaways", but with apologies to Mr. Zaky:
The market valuation of any stock on any given day is poorly correlated to the intrinsic value of the stock.
The notion of "intrinsic value" is itself a shaky proposition. For any high-tech stock, to the extent that "intrinsic value" is tangible, it is based on the expectation of future earnings, and more particularly, on growth in future earnings.
The market valuation of any particular stock on any given day is highly subject to the market perception of the health of the overall economy. There is no amount of studying of the data that is specific to a given stock, that is going to predict how its market valuation on a given day, week, month, quarter or year will be affected by the market perception of the overall health of the economy.
Even if the overall economy were high predictable, there remains the fact that in high-tech, there are routinely factors that hardly anyone sees coming, that alter the landscape in a way that fundamentally alters the playing field.
By the way, there is reasonable likelihood that the iPad will have disastrous consequences for Microsoft, and more so for Intel. The specific reason may not be obvious, and it isn't because Apple's iPad is going to replace the PC. The reason is that many clones will follow, and most of them will not be running Microsoft software on Intel processors. Given the way that Android is sweeping the smart phone market, it is likely that the greater majority of iPad clones, that will come crawling out of the woodwork in the foreseeable future, will be running Android or else Chrome/Chromium. Devices of this sort will outnumber iPads by probably 5-to-1 if not 10-to-1. Whereas Windows has not been officially ported to any processor other than Intel and the AMD clone, Linux has been widely ported. The most popular processor for all such devices, whether iPad or clones, will almost certainly be ARM.
This spells big trouble for Intel. The more difficult question is the extent to which Chrome/Chromium, once these software platforms take root in iPad-like devices, will make their way into garden-variety PCs. Were it not for the issue of application portability between Windows and Linux, the prospects for Chrome/Chromium to replace Windows as the preferred OS for PCs, would be much greater. But given enough time, this transition is likely to occur.