Chip-giant Intel (INTC) is about to go in a different direction. The WSJ says Intel's goal is to become a "virtual cable operator" by striking deals with "real cable operators" and studios. Customers would then be able to view this content via a branded box running Intel software fueled by the company's chips.

Reaction on the Street has ranged from confusion to rage to shame. As an Intel shareholder, I'm feeling all three. So is Gary B. Smith of thechartman.com, a fellow shareholder and my guest in the attached clip.

It's easy to grasp the general idea of Intel wanting to diversify its revenue stream, but the Chartman lays out three of the seemingly infinite reasons why this isn't the way to do it.

1. The field is jam packed. Intel can have the set-top box business. No one else wants it. Streaming and pushing content over the web to other forms of hardware is a different story. In bidding for content to be streamed Intel is putting itself in direct competition with Apple (AAPL), Netflix (NFLX), all potential cable company partners, and Google (GOOG).

"Intel is way behind the curve," says Smith, largely because he's more polite than I am.

2. They're going the wrong way. Most of the above companies want to drive content to more devices, enabling consumers to watch television from tablets, phones or PCs. Intel is going in the other direction, apparently planning to put the 'net on your television.

We've seen this movie before and it's a tearjerker.

3. It's a move born of hubris. Smith notes a move into branded consumer electronics and set-tops are outside Intel's field of expertise. Citing Starbucks (SBUX) music label Smith says these initiatives very seldom work and there's little reason to think this time is going to be different for Intel.

"At best it's a one or two year write-off and they move back to their core competency," he suggests. When shareholders' upside goal is that your new product be written off within 24 months there just may be a problem.

So Gary and I disapprove of Intel's new strategy. Trading isn't a support group for the downtrodden, we both have the option of selling the stock. So why don't we?

Beyond the fact that Intel has cash flows sufficient to pay for scores of idiotic follies, the chart is about a nine on a scale of 1-10. For the better part of the last 2 years Intel has moved sharply higher, consolidated then resumed its climb. The stock started the year with a big run then paused, trading between $26.50 and $27.50 since January 23rd. Smith say this price action "tells" him Intel wants to go up to the next level.

"I don't think it's going higher because of this particular marketing implementation, but I do like the stock," he says.

Sometimes that's enough, at least I hope so given that I added to my Intel long position this morning.

Does Intel have any hope of becoming a virtual cable company and why would they want to? Share your thoughts in the space below or Tweet me @Jeffmacke