Rick,
If the Ericsson thing came out differently or dragged on another year (and it very well could have)...none of us would be so smart right now.
That's very nice of you to mention that.
Many of us (especially those of us who come from the G&K thread) were very aware of Qualcomm and decided to refrain from investing until their status of domination was more predictable. We did that based mostly on understandings of concepts detailed in The Gorilla Game that address risk and reward.
For us, the Ericsson deal was an historic event, not just in the life of Qualcomm but in our lives as investors. In our opinion, the deal was a real-time example of an idea expressed in the book about a product crossing the chasm. For most of us, it was the first example we could reasonably, assuredly define as a definitive event in the adoption cycle of a product. That's because we've gathered that most changes in the adoption cycle are very difficult to pinpoint and because the book had only been published six months earlier.
Having seen that the product had crossed the chasm, we jumped on the research band wagon and revisited our due diligence of the past to make sure we understood the company and its prospects. In so doing, someone from this thread pointed me to the CDMA Group web site, which I had been previously unaware of. At that web site there was compelling evidence for me that, not only had the product adoption crossed the chasm (in gorilla-speak), the product adoption had very recently entered the tornado phase.
Voila!
According to gorilla-game thinking, there simply could not have been a better time to invest in Qualcomm -- not before and not after. (That is not to imply that there isn't or wasn't a better time to invest. I only mean that using criteria of gorilla-game thinking, there is no better time.)
Back to your astute comment. After the Ericsson announcement was made, you might be surprised at how how many, many people were mentioning that they had already been invested in Q because they "knew" Ericsson simply had to cave eventually. We were told that, for those who truly understood the issues, the idea that Ericsson wouldn't cave was simply not plausible.
There were a number of people who, frankly, were patting themselves on the back. Meanwhile, those of us who subscribed to a different investing philosophy were of the thinking that those people had taken on significantly more risk by investing so much sooner than we did. We were thrilled that they were reaping the greater profits in return for the risk. However, that isn't to say that many of us weren't also enjoying huge profits with less risk in other stocks while we waited for a better time (as defined by a different set of investing criteria) to jump into Qualcomm.
Again, thanks for your comment. It's nice to know that the Qualcomm religion allows for different points of view about when to make an initial investment in the stock.
--Mike Buckley |
