Trading Micron Stock - Bought MU on Warren Buffet book value comment:-)

Thursday, March 8th, 2005

I bought back into MU today, 300 shares at $10.64, or $0.26 lower than I sold out my 500 shares. The way I want see it, that's the same as having made $72, but I'm having trouble convincing myself. Unfortunately, it's a hard selling job, even to myself. MU isn't expected to report until March 24th, but I found an excuse in the news for buying it today. Warren Buffet, in explaining for the lack of performance at Berkshire Hathaway last year, pointed out that book value was up 10%. MU has the highest price to book ratio I've seen for a tech stock at 1.12, $9.43/share for a stock trading at $10.64. AMD has a P/B ration of 2.2, the Intel ratio is 4.03, Dell is 15.39! However, before I get too excited about price to book, I checked some stocks with famously low P/E's, and found GM's P/B is 0.67 - in other words, GM's book value of $50.60 / share is higher than it's stock value of $34.55 /share. Maybe that's why it's up a half a buck on the day.

The big overnight news is that AMD has announced a 64 bit mobile computing CPU, the Turion (yes, it's trademarked, though I wish they'd consult me before naming these things:-) News of major new product releases from AMD often gives the stock a bump up, even though it was no secret that they were developing and testing a CPU to compete with Intel Centrino (Intel's trademarked mobile CPU) technology. AMD's market share in notebooks is lower than its market share of desktops, so if the CPU finds acceptance with manufacturers (no hobbiests building notebooks), it could be a major win for them. I was actually surprised to see AMD fall yesterday on news that Intel in Japan had received an official notice from the Japan Fair Trade Commission (JFTC). I couldn't find the details, but from the CNBC commentary, it sounded like pricing practices that punished manufactures who strayed from the straight-and-narrow. Intel's mid-quarter report comes after the bell today, and changes in revenue estimates at this point often move INTC shares.

I kept a close eye on IOM today, which is getting very near to my 5% band. I'll was out 5% interday when it reached $4.47, a quick $240 loss. When IOM hit $4.47, I put in a sell limit order at $4.47, and for the next half-hour, the offer price stayed under it (low volume stock). When I canceled the order, the price jumped to $4.48 - reminds me of e-bay psychology. unfortunately, I forgot to put the stop loss in once it was over the 5% envelope, and it closed the day at $4.43. Must sell on Friday.

Starting Portfolio Cash on 2/14/2005 was $25,000
Symbol/Index # Shares or Cash Purchase Price Day High Day Low Today's Change Closing Price Closing Value

AMD 200 $17.13 $17.12 $16.72 +0.08 $17.02 $3,404

IOM 1000 $4.71 $4.56 $4.40 -0.08 $4.43 $4,430

SYMC 100 $21.19 $21.35 $21.02 +0.04 $21.17 $2,126

MU 300 $10.64 $10.71 $10.56 +0.09 $10.69 $3,207

Portfolio¹ $11,185 N/A $24,352

Dow Jones (DIA) 230.251 $108.45 $109.23 $108. +0.46 $108.47 $25,005

S&P 500 (SPY) 206.254 $121.21 $122.29 $120.98 +0.27 $121.24 $25,006

Nasdaq (QQQQ) 658.241 $37.98 $37.93 $37.47 -0.05 $37.52 $24,697

¹Portfolio balance is after all trading costs in SEP brokerage account with BrownCo

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