Take my idiot motley
Advanced Micro Devices is a promising company in the semiconductor industry, whose price has fallen recently amid the overall market downturn. The company also warned that the next quarter’s results will be disappointing. If you can stand the turmoil and plan to hold your stock for a few years, this is a technical stock to consider buying.
AMD, a group of semiconductors long considered a second fiddle to Intel, has been gaining momentum for more than a decade now after ditching its manufacturing business to focus on chip design. This has given AMD the resources to steadily capitalize on Intel’s leadership in processors—not only those used in consumer electronics such as PCs and laptops but also in the lucrative and rapidly growing infrastructure of cloud computing.
AMD’s massive program with Xilinx (the pioneer in field programmable gate arrays) in early 2022 opened a new front against Intel. Meanwhile, AMD’s gaming GPU cards are priced competitively against Nvidia’s industry-leading offering.
The semiconductor industry is undergoing rapid change and expansion at the moment. It is estimated that global demand for chips will reach $1 trillion annually by 2030, more than 60% higher than global sales today. There are ups and downs ahead, but in the long run, AMD can thrive. (The Motley Fool Company owns and has recommended shares in Advanced Micro Devices.)
ask the fool
From PY in Morgantown, W. Va: Is the best way to invest just to “buy and hold”?
The fool responds: This approach is certainly hard to beat. Even better, buy to me Wait: Instead of just blindly buying and holding, you buy while planning to keep the company as long as the company remains healthy with great growth prospects. This paraphrase reflects the fact that you should, ideally, keep up with your holdings, read their quarterly and annual reports and follow them in the news.
The exception to this would be if you invested only in a broad, low-fee index fund, such as one that tracks the S&P 500 Index. If that’s the case, there’s no need to read financial reports or news; Just aim to keep adding money to it over time, and keep it – for many years, if possible.
From CI in Gilbert, Arizona: Do small companies have low stock prices and large companies have high stock prices?
The fool responds: not at all. The stock price itself doesn’t tell you much. Suppose, for example, that Comcast recently had a market capitalization close to $133 billion and a stock price close to $30, while defense company Northrop Grumman had a much lower market capitalization, at $75 billion, but its stock was at $485. (Market cap, or market capitalization, is simply the current stock price multiplied by the number of shares.)
To get a sense of how fair a stock is, you need to correlate its price with other numbers such as earnings. The price-to-earnings ratio divides the current stock price by the earnings per share over an entire year. Northrop Grumman’s P/E ratio has recently been around 13.5, while Comcast has been near 10. Overall, the lower P/Es reflect stocks that are not highly valued by the market.
school of fools
Many people make a big mistake when planning for retirement: they fail to plan for significant health care costs.
Fidelity estimated that a 65-year-old married couple retiring in 2022 will spend, on average, about $315,000 on health care expenses in retirement. Yikes! And that doesn’t even include over-the-counter medications or most dental services or long-term care.
Speaking of long-term care: That can be another big cost to retirement. You may not need long-term care insurance if you are wealthy and can pay for care if you need it. And you may not be able to afford insurance if you are only managing to cover your expenses. But if you’re somewhere in between, consider covering LTC.
So how do you prepare for hefty healthcare costs? Here are some ideas:
- Get healthy and stay healthy. If you eat nutritious foods, exercise regularly, routinely see health care providers and get preventative checkups, you may end up spending less on health care.
- Be smart about medical care. Late registration (more than three months after your 65th birthday) can cost you a lot of fines – for the rest of your life. (Don’t delay!) Consider purchasing a supplement plan to reduce personal expenses. Consider a Medicare Advantage plan, too; It provides as much coverage as traditional Medicare (which includes Part A and Part B) and often includes more, such as dental, vision and/or hearing benefits. Medicare Advantage plans also limit your personal spending each year.
- Consider using a health savings account or a flexible spending account to pay eligible expenses on a pre-tax basis. HSA is preferred, as it allows the accumulation of funds in the account; You can invest that money, and you can withdraw it when you retire.
It’s hard to avoid paying for health care in our later years, but if you take some time to read and learn more about it, making some smart moves can cut costs.
From the UK, online: I bought shares of Zoom Video Communications early in 2020 for less than $100 per share. Posts exceeded $120, and around that time, the term “Zoom bombing” appeared in the news: People uninvited to video calls were able to get into them, often sharing fees and/or disturbing photos. There have been potential lawsuits, some organizations have started to ban the use of Zoom, and the stock has come under some pressure. I sold for $115, thinking I got out in time. You know what has happened since then.
The fool responds: Zoom shares soared in 2020, topping $580 as suddenly millions of people were working from home and often participating in Zoom-hosted video conferences. I lost some big gains. But as soon as vaccines became available and many people thought life might soon return to normal, the stock started dropping — in fact, it recently traded for around $78.
You were right to note this phenomenon of zoom bombing. The question asked by Zoom investors at the time was whether the Zoom bombing was likely to be a major intractable or temporary problem that the company could curb. Zoom ended up paying $85 million in a class action lawsuit related to the Zoom bombing and agreed to improve its security procedures. Today the company is still growing, and many believe that it has a promising future.
who am I?
I trace my roots to the discovery of oil in Pennsylvania in 1859. In 1870, John D. Rockefeller and others founded Standard Oil, an important early company in my dynasty. By 1911, it was so large that it had to split into 34 different companies, such as Jersey Standard, Socony, and Vacuum Oil. Today, headquartered in Irving, and with a recent market capitalization in excess of $425 billion, I am one of the world’s largest integrated fuel, oil and chemical companies. My current name reflects a major merger in 1999. Who am I?
Don’t you remember last week’s question? You can find it here.
Last week’s trivia answer: Harley Davidson