REALITY CHECK: Of AMD, and life. (It’s all about expectations)

Nicholas told me to buy AMD because he was sure their coming product was a blockbuster and the stock would “rally big”. I don’t know a thing about AMD, can’t even spell it. But I cautioned him, “Based upon where the stock currently is (highs), and the run it has taken, I bet it goes down on the news.” He told me I was wrong. Out of respect, I bought the 500 shares he asked me to buy for him.
AMD reported earnings results last night and they were “AS EXPECTED”…(hold that thought)…and the stock is looking down 13% and over 30% from “our entry price”.
it’s not the facts, it’s the REALITY vs. EXPECTATION that matters.
Remember I asked you exactly this… “What part of what you are telling me about the coming new AMD product that others don’t know? Is it going to be better than what the press and internet sites say?”
With stocks, it’s always, “What do I know that others DO NOT?”
And importantly, “What is PRICED IN?”
It’s “the edge”.
Another lesson that is equally important…the best TRADES are often SMALL LOSSES!
Nicky, no worries, I cut back 80% of the AMD almost immediately after I bought it at $15.06…because it didn’t “act right”. That means, no matter he thought good news was coming, it was reflected in the price action…and alas, it was.
So, I sold the small remainder that I had after that (the part I call, “respect for my son” amount) because it still acted poorly.  So there is zero damage from today’s sell off…except YOUR ego!
If you take this email and staple it to your forehead, take it to heart, and learn from it, it could be the single most important lesson in investing you will ever get. I mean that…and It’S FREE!!!
As once again you learn, “your dinosaur dad may not know much, but what he DOES know…” 
Oh, and even if I still owned it, and lost $$$, I’d STILL LOVE YOU just as much!
As Zedo taught me, “Lessons will keep coming… just try and keep the tuition to a minimum.”
Finally, from the “applied dad file”… it’s not just stocks, it’s life. How YOU view outcomes is often dependent upon YOUR expectations. If you maintain an even keel and keep emotions in check, your chances of “upside surprise” are greater. Measured and thoughtful are always in vogue.
And Boo Boo my son, one final VERY important question: Down at THESE prices today, is the “bad news” priced in?

Advanced Micro Devices, Inc. (AMD) Stock Tanks After Earnings Results

Where does it come from? Where will it go?

One day it’s just Legos.   The next day it’s Minecraft.   Then one day they say, “look what I built!”

And you watch those fidgety hands in the video. The ones about which teachers in France say, “he can’t sit still”. The ones which can drive parents crazy at the dinner table, like say in Sydney, when that fidgeting nearly killed a guy (a story for another days post).

I once said in passing, “i’ll spend as much money as you like on two things…books and technology”. And then comes the request. “I know I’m 12, but I want to build my own machine. I’ve done the research and figured out the configuration, and… and… can I…?

Off they go. Like getting on the school bus for the first day each September. A mixture of pride and sadness, as each step forward is a step further away. Or is it?

Perhaps a step closer. With Mom, straight from the techno-brain of her dad, a nerd at heart. The perfect combination of brains and beauty, there to support, maintain calm and to encourage.

After much dutiful research, patience, and perseverance. Weeks to study, days to build.



et VOILA! 



“It’s ALIVE!”

This machine has now been constructed and deconstructed so many times I worry about slot leakage and loose contacts. But in the end, the blurt, “I would do this 24/7 if I could”, made the experience priceless.

And then you realize that that lovable geek, that proper nerd, is our geek. Our nerd.  And you think about the Dr. Seuss book you read to the kids as babies…(thank you, Butch)

“You have brains in your head.
You have feet in your shoes.
You can steer yourself
any direction you choose.
You’re on your own. And you know what you know.
And YOU are the guy who’ll decide where to go.”

Oh, The Places You’ll Go — Dr. Suess

And you realize, he’s not ours at all, he’s simply on loan. He’s really all his own.

And that makes all the difference.

Much respect to Nicholas “Clickolas” Balog. 2017.