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The Chairman
Victor Niederhoffer

11/22/04
Anatomy of an Old Time

The following are the key news stories that appeared on Intel during the  rundown and up of its stock similar to the Wyckoffian books (all from Bloomberg), together with the company's stock price.

7/13  "Needs 90 days to reduce inventory, Bryant says"     26.1

7/14  "Intel drops on fears margins will decrease" 23.3

7/26  "Cuts chip prices by as much as 35% " 23

8/23  "More chip prices cut" 21.9

8/31  "Shares slip as proof estimates cut by MS" 21.3

8/31  "3 RD quarter sales may lag highest estimates anal. say" 21.3

9/02  "Profits may shrink as prices drop, invent. rises"' 21.6

9/03 "Forecasts raise concern of global chip demand"   20.0

9/12  "Intel's struggles to test new chief apparent Ottelini"   20.6

9/15  "We're seeing slower growth than we had initially anticipated."    20.6

9/24  "Cancels wireless option in personal computer chips" 20.1

10/12  "To report slowest sales growth in 5 quarters" 20.3

10/13  "Revenues tops estimates, inventory reduced" 21

10/15  "Cancels version of pent chips, cuts prices" 20.5     

10/16    "Barron's says it lags in cell phones" 20.6     

10/18     "Lowers chips prices by another 35% " 20.8     

10/19 "Analysts cite mumbo jumbo in inv. layers discussion" 20.8     

10/20 "Cancels project to develop flat screen TV chip" 21.7     

10/25 "Chief begs forgiveness says was too relaxed, says we ate crow, gets down on knees before 6000 tech." 22.7     

11/05 "Intel and Wachovia have lowest profit gains since 2003"  23.4     

11/10 "Doubles dividend, to buy back 50 million shares, inches out slight increase in net income in q3" 23.2

11/12 "Barrets says timing sucks about departure" 23.7

11/18 "We are on target for improved perf. in qrts. 1&2 in 05"   23.8

11/23 "AMD takes market share from Intel. CSFB cuts INTC to underperform." 23.8

All I can add to this is a " damn my broker " on 10/12, "Sell  regardless of price."  Like a Scriabin prelude (No. 111?) Beautiful. Both. Note* while not relevant to the anatomy, I own Intel shares as of this writing.

11/22/04 Allan adds:

I completely agree with the chair that the concept of a Wyckoffian casts and "corners" is valuable these days (has been for a few years). To see this, read Bernard Baruch's description of the Northern Pacific Corner and look at a chart of the A/D line side by side with the large growth stocks and mutual funds from 1998 through today.

More recently, notice that the market cap of each of the stocks owned by one reclusive, but now more public hedge fund manager. The market caps are less than the size of his fund. He truly could take the companies private, but he doesn't because private companies sell at discounts to public companies because of liquidity. He has figured out how to create a stock supply shortage, and hence a lack of liquidity premium. He tempts the shorts by buying troubled companies and makes them howl the whole way up.

"Collusion" need not be as overt as a group of bankers sitting in a room after the demise of a large hedge fund. It can result from a number of activities like large funds sponsoring/corning certain small stocks or money flowing heavily into a particular "style box" area where the managers all use similar strategies, and hence chase and punt the same stocks at the same time. Even the best pools failed when the fundamentals did not support their activities.