Hello Hassell,
Not to enter into the midst of this, but I did want to point out a couple of issues.
I am a great follower of George Gilder and his analytical style. I truly respect the way that he disassembles the technology into simple "building blocks" that can then be looked at as, what I call, "Inevitable Technologies". What I mean by this is that if you take a high-level view of the industry and the evolution that is occurring, I believe that it becomes easy to pick the "ascendent companies" as George does.
With that said, I also believe that George relies on numerous technologists in the industry to gain his insights and form his opinions. I can only say that I agree with some of them ... and disagree with others. We all know that the "best" technology is not a "sure win".
Your statements took me by surprise:
> I acknowledge all of these risk factors associated with TERN. Do
> you really think you are the only one who is aware of these issues?
I'm glad that you do recognize the various issues that can potentially effect the future of these companies and the industry. None of them seem to be so bad that they can not be overcome ... it's all a matter of costs. Along with this, I'm sure that you realize that Pat doesn't believe that she is the only one aware of these issues.
> The market is aware of these issues and has placed a significantly
> higher value on TERN than CMTO. The market is telling you that
> there is a higher probability that TERN will be successful than
> CMTO. If you want to ignore what the market is telling you, be my
> guest.
This is where I am truly surprised. As we both know (I think), George Gilder carries a lot of weight in the industry as a visionary, and has close ties with the "Forbes" crowd. I do not try to mislead myself into believing that this doesn't have a great effect on the valuations of the companies that George discusses. If you were to chart the stock prices of George's "picks", I believe that you would see a spike in any stock, the day after he mentions them in his news letter. And these stocks seem to continue to hold a higher value as more people communicate the news of George Gilder and his thoughts.
I have to express my opinion (and that's all it is ... I could be wrong) that when I analyze the stock price of TERN, I see direct correlation to the emphasis placed on their company by George Gilder. So I don't believe that the majority of the folks investing have done the type of due diligence that others have ... they have simply bought because George said so.
If this is the case, I'm not one to throw out conspiracy theories and such. I would propose that George has listened to the technical arguments and examined the companies involved and simply stated that he thinks they have great technology. He is a *big* fan of CDMA ... and Qualcomm. But that in itself has no real relation to the politics and competition that get involved in the real world.
If I were to look at stock prices and think "Because the price is high, the majority of shareholders must have done their due diligence and determined the potential for success ..." I would probably be in error. I *do* think that many of these tech stocks have gained huge amounts of money that they can (and should) use to "backfill" and "enhance" their vision. But I'm not sure that I agree the thinking of the average investor is as sophisticated as yours.
I'm not one either side of the "battle" ... I simply see a market where several companies are going to do well. I believe that investors in TERN have done well, and that CMTO will also make progress. I do question the S-CDMA argument when it comes to cable, but like you state other people do not yet seem concerned over the CableLabs decisions. The key word "yet" ... maybe never ... but "never" is a very long time.
I wish the best to you since you have decided to invest in both companies. However I would have to say that some of the calls that George has made have taken much longer to spin up than others ...
Scott C. Lemon |
