Mark,
I am sorry if I offended you yesterday, but now you have a better sense for how you make me feel, and others who remain very optimistic about IDT's business prospects, when you put down IDT. I put down your college and you get very defensive because you take it personally. In turn, this is because you made a conscious choice to attend that school, a decision you feel good about. You put down IDT and I get defensive because I take it personally. In turn, because I made a conscious choice to invest in this company, a decision that I feel good about.
It might be helpful if, in the future, you direct your frustration inward (i.e. towards yourself) rather than outward (i.e. towards IDT). For example you could voice your frustrations by saying something like..."I am very dissappointed with my decision to buy IDT last May becauses I didn't realize the SRAM market would experience such significant and rapid price erosion. And/or I didn't realize the effect of removing 16 to 20 weeks of inventory from IDT's distribuiton channles would have such a profound impact on 1996 sales levels. And/or I didn't realize the large fixed cost burden of bringing a new state of the art fab online. And/or I thought they were farther down the developemnt path for proprietary new products."
You can see that this approach puts the burden of underperformance on you and not on the company. Making a poor investment decision is never the fault of the company, its the fault of the investor. As investors we not only need to assess the business opportunities available to specific companies, we also must assess managements ability to execute against those opportunities. If potential is not realized it is because we the investors failed in our assessment in one of these areas, which can't be blamed on the company itself. If you are going to take credit for a good stock selection you must also be willing to accept responsibility for making a poor one.
In terms of the four business issues I raised above, I don't fault management for not being able to fully anticipate the combined effect of these factors, collectively they are too extreme to be predictable. However, it is clear that IDT was positioning itself for diversification (specifically in the area of proprietary new product development targetted towards the communication segments) BEFORE the collective impact of these events. They knew a major portion of the SRAM family was becoming a commodity and as such would be suseptible to rapid decay and they began to develop a plan to transition their business to "higher ground". The subsequent decline simply came faster than anyone could have anticipated. Furthermore, IDT has continued to make the right decisions organizationally to establish an infrastructure that allows for highly experienced and dedicated resources targetted towards new proprietary business segments. This will most likely result in these segments becoming as successful as IDT's current niche markets. For those that have taken the time to fully understand the business, these projections can almost be taken as givens. For those that haven't taken the time, the facts will unfold themselves over the next 1 to 6 months and by the time they are readily apparent, it will be too late to fully benefit from this realization. I am not trying to convince anyone that these are accurate assessments, that doesn't benefit me at all. I am, however, willing to defend IDT's business model in a public forum when I feel it is being mis-represented.
Again I apologize, but I also hope you appreciate and understand my point.
K |
