Intel Stock Is Not A Value Trap
It’s a value play
It’s no secret that people are talking about Intel stock (INTC) being a screaming deal, and there’s been plenty of articles and videos exploring Intel as a buying opportunity. However, some people are bearish, so I want to go in a different direction in this article. If you go into any comment section, you will inevitably see someone saying that Intel stock is a “value trap.” First off, is it? Why would someone think a thing like that? So far, I haven’t seen any reason given. Therefore, it’s hard to take the claim seriously if there’s no follow-up.
Steelmanning the case for Intel being a value trap
Perhaps one could argue that since most value stocks are value traps, it follows that Intel is probably a value trap, all else being equal. But Intel investors do not think that all things are ‘equal’! They would point to the new CEO, financials, growing industry, etc. We have to update those probabilities in light of new data, including the data about Intel stock (see Bayes’ theorem). Therefore, if a person claims that a stock is a value trap or specifically calls Intel a value trap, they need to give actual reasons. Otherwise, we don’t have a (bearish) case but just an assertion. Being indifferent or neutral about a stock is fine, but that’s not the same thing as a bearish claim…
