Whether there was or was not a Markman ruling against Rambus yesterday seems more a matter of fact than the rumor floated last November that Intel had considered dropping Rambus?
Is Rambus denying that the Markman hearing ruling from the court limited the scope of its patent claims? (Yes, perhaps RMBS can appeal, but it would have been better for Rambus to win at the trial court.) If no such ruling occurred, as you almost suggest, why didn't Rambus issue a release today?
Help me understand the point you are trying to make.
Hi Saukriver. Here are the points I'd like to make:
-EBN is extremely unreliable. I'd sooner trust the Oracle company newsletter's take on SQL Server than EBN's take on RMBS. Whether due to a reliance on advertising from RMBS foes or for other reasons, they have demonstrated a tremendous bias against RMBS. That doesn't mean that they're wrong, but it does mean that an anti-RMBS story from EBN is a non-event. They constantly run stories saying that "unnamed sources" said [insert random dreadful thing about RMBS here] before (RMBS defies the laws of physics, RMBS costs much more than DDR, INTC is dropping RMBS, RMBS killed kennedy, RMBS stole 12,000 votes from Gore in Florida, etc.). In every instance I can think of, these are never confirmed later. They are deceptive FUD-mongers. Just to give you a hint, here's the title of a really incomprehensible and misleading article they recently published (by the same author as this one, BTW): "Documents Reveal Rambus’ Secret Scheme; New Evidence Re-Ignites JEDEC Debate"
-I find it highly, highly unlikely that a journalist or an analyst would have any access to an undisclosed ruling. If they did, whoever got them access would soon be out of a job, and maybe a licence.
-FUD articles are careful not to say things that are demonstrably false. Instead, they say things that are true, but irrelevant, and stated deceptively. They also quote "unnamed sources" saying really inflammatory, often false things. So:
--A clerk says that a ruling is forthcoming. True, but uninteresting, as we don't know what it says.
--An "unnamed source" says that Infineon is claiming the patents don't apply to them, and the judge is going to agree. I imagine the "unnamed source" is a member of Infineon's legal or PR teams. Now, if this were true, why wouldn't they just wait until the Judge said so tomorrow (when the ruling will apparently be released?). Let me tell you what I think is going on:
1) FUDsters say: "Rambus is going to be destroyed. The judge is going to rule that X is true." The FUDsters know, since they've been involved in the trial, that the judge is probably going to rule that X is true.
2) Analysts and investors panic. Rambus is going to be destroyed! Oh my god.
3) Rambus says, "These are FUDsters. They're totally overstating the impact of X. It's bunk."
4) It comes out that X is true.
5) FUDsters say, "We were right. X is true. Rambus is going to be destroyed!"
6) In fact, Rambus didn't deny X. They denied that X was a big deal. But this distinction is lost on most people. The perceive that: a) the FUDsters were right, because the only factually verifiable statement they made (X) was in fact true. That lends them credibility, and all of a sudden, their analysis of that fact is favored. b) RMBS looks dumb, and deceptive. This leads to the general impression that RMBS is not to be trusted, and likely to fail. This helps to make other firms uninterested in partnering with RMBS, and in supporting their standard. It also randomizes RMBS, and forces them to spend valuable time, money & energy fighting this FUD.
-The war between RMBS & its foes is at least as heavy on FUD as the war between QCOM & its foes. This is not to say that RMBS would win, but it pays to recognize that opponents of a nascent standard will go to extreme ends, including the recruitment of shady journalists, to undermine the nascent standard. IMO, these situations can present the best short-term investments there are, if your side wins in the end. I think that the RMBS foes think "Well, we've got a 1 in 10 chance in killing RMBS if we can convince everyone in the world that they're already dead." And they're right.
-When you explore QCOM ca. 1999, or RMBS now, you will enter a reality distortion field. Supporters and opponents of the potential standard tend to be fanatical, and seriously exaggerate the truth. If you're going to consider such an investment, it's very important to explore the facts in a rational and detached matter. It's also important to always keep the big picture in mind, and to develop a thick skin for FUD, whether for or against your company. Good long-term investors always say, "Know why you own a stock. Know it's story, and know what will cause you to sell." Me, that trigger is "RMBS loses the trials and RDRAM looks like it won't win out over DDR, SDRAM & other standards. Or RMBS hits $200 - $300." That hasn't happened, so I'm still buying. In fact, RMBS is all that I'm buying for the forseeable future, and I was thrilled to find it down 30% this morning (once I found out why).
-I, personally, am resolved to keep investing in RMBS even if they lose the trial. That's because I have faith in INTC's support for RDRAM, so even if RMBS doesn't get paid for DDR or SDRAM, at the end of teh day, they'll get paid for the winning technology (RDRAM), IMO. I have also decided to dismiss reports I hear from known FUDsters (EBN, Tom's Hardware, etc.). They may be right occasionally, and that's a risk, but I won't trust it until I hear it from a reputable source.
-No one in the world should follow my lead. My IRA is composed purely of NTAP & RMBS, and has swiftly fallen from $5000 to $2000. My non-IRA account has stayed steady at $3000 for months, but that's because I've been pumping in $800 a month...
Let me also tell you all why I'm buying RMBS. This isn't a recommendation, but just to explain my behavior. In particular, why am I only buying RMBS, and not JDSU or NTAP (the other two stocks I own)?
I believe that JDSU & NTAP are the two best stocks out there, in the long term. I have some concerns about RMBS long-term, as they have a significant probability of hitting a brick wall in 10 years, when their patents expire. But even counting only their cash flows through 2010, I think RMBS is worth a fair amount. (Note to Pirah, and other DCF folks: I think this is a reasonable time to use DCF, as the important cash flows are in the near-term, and relatively predictable). Like NTAP, RMBS is in the midst of a tremendous FUD war. But I think that RMBS' cloud of FUD is thicker. The bad thing about FUD is, it's scary. The good thing is, when it's lifted, it's lifted quickly, and there's a tremendous bandwagon effect. People who invested in QCOM in 1998 know what I'm talking about. Of course, so do people who invested in any number of Gorilla Candidates that died.
But I think that candidates in the midst of a FUD war (MSFT in 1990, NTAP or RMBS today) are safer than candidates in the chasm. For the latter, the issue is, "It's unclear whether they'll win, but if they do, they'll win big. So the market is rationally pricing them low." For the former, the issue is (I hope): "It's pretty likely that they'll win, and win big. But other companies are trying very hard to talk down the prospects, so the market is pricing them low due to misinformation."
Anyway, I think there's a very good chance that RMBS will bounce back very quickly, and very strong, once it's clear that they've won. I think that JDSU & NTAP will also do incredibly well long-term (much better than RMBS, actually), but their marches upward will be slower and more steady. For that reason, I'm investing in RMBS for now, although should RMBS pop, I'll put my money into NTAP, or maybe JDSU.
So now you know: for all my preaching about long-term investing, I'm a short-term-aholic. And an insanely optimistic permabull.
ardethan |
