"Hard Landing" and Advanced Micro Devices (AMD)
All these talk and worries about the economy having a “hard landing” is all nonsense. In fact, I’m hoping we get a few more bad economic data so the FOMC would ease on interest rates. A reduction of .25 basis point would absolutely drive the market higher.
In this current market environment, it is important to keep your cool. Don’t panic and start unloading all your positions. Instead, look through your positions and sell off some of your gain. There is no sin about taking money off the table. Only sin is leaving money on the table in the hope it will continue to grow and ending up with a lost. Look for opportunities to add positions that are undervalued.
One stock which comes to mind that is undervalued is Advanced Micro Devices (AMD). This stock is trading is priced incorrectly at $20/share. My view is this stock will be in the high 20s in 6 months; the upside outweighs the downside risk at this price. The chip sector should do well in 2007 as Microsoft Vista will force many companies to start upgrading. Ignore the noise about AMD and the DOJ. It is purely just noise. AMD’s deal with Dell will propel AMD to greater profits in 2007. In fact, Dell has already started shipping their PC with AMD chip, which is much faster and cheaper than Intel’s chip. IBooyah’s price target for AMD is $26 by April 2007.
