Buy Intel for your retirement

If you have bought Yahoo as I suggested when it was traded at around $15 only 2 months ago, you should be happy now. At $17 at the moment, Yahoo has appreciated by 13% in 2 month, in a market which has declined by about 10%. More importantly, Yahoo has broken out its long trading upper range for over a year around $16. This is very important, which technically often means a much big advance is lying ahead for Yahoo. I won't be surprised to see it go over $25 within a year.

If you were convinced and bought Yahoo when I talked about it, then I think you should also consider to buy Intel (INTC) for the similar reason, that is, its great valuation. I know Intel for many people is a very boring stock, especially those who are looking for a quick win. I agree that Intel will likely not go up 100% in a short period of time. People are also thinking Intel is a dying company, given that it dominates the PC chip market with a 80% market share but the PC industry seems in a descending trend. While PC is not an exciting industry anymore, it won't go away for a long long time. We are still heavily relying on our PC for our work and daily life. You can safely bet that Intel will continue to earn a huge amount of money from the PC chip sector for years. The strategic problem Intel has is that it did not foresee the mega new trend of the mobile industry early enough and it has been greatly lagging behind in the game. But Intel has realized that now and is catching up. I think it is just a matter of time. In addition, Intel is also the main player in the severe sector. So I'm still very much interested in Intel, primarily due to its enormous intrinsic value at this very depressed price around $20. Its P/E ratio is only 8.8, a ridiculously cheap value for such a great company gushing out a huge pile of cash. I'm more interested in its 4.5% dividend yield, which you can bet will continue and increase. I definitely agree that you should not buy Intel for a quick money but I strongly recommend that you should consider Intel for your retirement portfolio with dividend reinvestment. Overtime, you will be very happy that you make this decision today. This is what I'm doing now and I simply add more if Intel continues to go down, although I don't believe it will go down too much further from here.