*Robert, Do you have an estimates on the size of company Vari-l will be in 2000, 2001 and 2002 by market cap?*
Please read all of this post, I really put a lot of though into it.
No. Who knows how the market will price VARL? I do know that VARL should be earning vastly more than it is now, and that in return trickles into retained earnings, which translates to ROE, which is what we really should be looking at when investing in a company - that it is actually growing its intrinsic value. There are several folks on the thread and other places on SI that can attest to my methods . . . this whole thing of the greater fool theory is really bugging me. Take fiber channel - it probably won't be much of a player in a few years (I ranted about this well before George Gilder published his report) yet that segment of the market is valued in the $$$Billions with hardly any money flowing to the bottom line. Do you really want to be in that business? I had a chance to buy Ancor, Brocade and all the others earlier this year, but decided that the standards fight was too close to call and did not fit rational though . . . instead I bought QCOM for 16X (at that point) earnings and 1X sales. While I missed out on the 500%+ run in those stocks, I got the 1200% return in QCOM, which incidentally will earn what the street is estimating for the whole company on royalties alone (the street is looking for ~$4, royalties should earn at least $4.40, no kidding). Anyway, my point is that who cares what the street values a company at? All I care about is that sometime in the future I get my $$$. For VARL it has been along three years, but I earned my 325%+. But why worry? Time rarely allows great companies to remain ignored for long. Folks really should have a 5-year time horizon minimum. Not this stupid, I must chase fiber channel related companies because it's going up attitude. Fiber channel is effectively a lost standard, effectively dead – I pity those shareholders long term (if there is such a thing) billions will be lost*. SONET is facing a similar destiny. Read my posts on the GBLX thread for more information related to that.
Anyway, I'm ranting again. Hope this helps! (Seriously)
*This is not to say that these companies will not make money, only that it is nowhere near the streets expectations over the long haul. |
