Hi michael, ad & all - I don't follow Michael Murphy [of California Technology newsletter frame,] but while one should view people's backgrounds as part of their trustworthiness considerations, we all make stupid mistakes. Admittedly, I am an idealist --- probably a downright bleeding heart :), but there are enough legacy of ex-offenders turned philanthropists to warrant my idealism. I don't know enough about MM to make the judgement though.
Back to CDO, I agree with you about the tax loss selling situation. That said, PRISM is indeed a disappointment and it will weigh on CDO valuation in the near term.
Also, CDO is also associated with venture type business. So, when it is hot, it is hot. When it is not, it is downright cold. I do not believe it will return to the heady days, but I think it is still a very profitable business, if it is done wisely and if it is fully diversified. In this kind of -ve perception environment, CDO actually has an leg up on the incubator pure plays like ICGE, CMGI and SFE [which I also own, to my discomfort.] I would guess CDO would do nicely even if one out of every ten of her investments see the light of days.
CDO core business in disaster recovery and continuous services will not go away. This is the other side of business insurance. No one in the corporate whos who will leave their data center exposed to fire, hurriane or even earthquack without some sort of an offsite. Sure, CDO is not the only game in town. However, she is one of the few noticeable players.
Finally, ad, while I revere people with great educational background [my niece just finished her PhD from Princeton :),] there are a lot of dropouts in the whos who of corporate titans. In the UK, you ve the Virgin guy. In the US, Gates and Jobs have been quoted again and again. Mr Nike Pontikes actually cut his teeth by being a failed financier after his sting on Wall Street. And maybe you are right, CDO financials are not that pristine. But, think about it, maybe it is intentional. If you want greater reward, you have to take greater risk. Nothing is a no brainer!
Just a friendly academic exchange :)
best, Bosco |
