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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Mike Buckley who wrote (18020)2/15/2000 8:51:00 AM
From: FLSTF97  Read Replies (2) of 54805
 
Rambus Chasm Crossing

Mike,

My comment was more to cause people to think in the terms of time and scale of adoption (and hence the level of risk, even if it has crossed the chasm). I think the various releases of computers with RMBS bode well for it being able to claim having crossed the chasm. Here's my question: how long does one need to be on terra firma to claim a successful chasm crossing? A minute? A Day? A year? A decade? It's probably not a decade, but perhaps it could be over a year. ...And that is probably more determined by the level of adoption than pure time.

Now relate that to when a displacing standard is announced. It seems to be a classic strategy to pre-announce products to destabilize the competition (and all the memory manufacturers see RMBS as taking money out of their pockets). At a minimum it would probably give the various manufacturers leverage to renegotiate some royalties. I would also guess that Intel as part of that group would join in on leveraging RMBS to capitulate.

Now if that happened, don't you think that at least RMBS's chasm crossing status(or at least their ability to capitalize on that status) would appear at risk to the market? There is already precedent as to what will happen to RMBS's valuation in such a situation.

I think that potential investors in RMBS should consider that even chasm crossing is not a guarantee of Gorilladom nor future gains in valuation.

The recent Williamette announcement strengthens RMBS future prospects. OTOH, perhaps they've just given AMD another potential marketing tool to us against Intel? (Please save all those replies about AMD's ability to execute, I know. I'm just pointing out a broader scope of risk)

Anybody on this thread employing G&K investing strategy should really try to think through these points before making a RMBS investment.

FATBOY

P.S Nobody should think I'm infallible: I elected not to buy JDSU last year and one former (admittedly high risk) investment proved its riskiness by filing bankruptcy early this year.
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