c2,
<< Thanks from a lot of us for your recent posts concerning market share, growth, etc. I know it takes a lot of time to get the information together, format it, and then make some sense out of it. >>
You're welcome.
The habit really grew out of my wireless days when I had to forecast sales across technology and product segments, determine budget, and manage and allocate sales and technical support resources. I had better tools at that time (paid subscriptions to research agencies data and reports and access to professional business planners). The basic methodology has had a positive carry over to investing.
<< I know your style is to dig through facts and figures and then try to make a call for the future based on what this tea-reading process leads you to conclude. >>
That is, in fact, one aspect of my investing style.
In wireless I rely on my own research to a greater degree than other's research (but most certainly not ignoring theirs). In other sectors I rely on the research of others in the early going of doing DD, then overlay my own research and instinct. Regardless, I do not make investment decisions quickly, seldom "trade", and for the most part have a LTB&H mentality, although I also focus on entry and exit points, and portfolio balance. Silicon Investor happens to be, IMO, a great resource for distributing the DD task amongst a number of different individuals, and benefiting from their perspective.
As for "tea-reading", I'll drop back to my professional/vocational experience, and admit that strategic analyses, trend analyses, forecasting, and tactical and strategic decision making, are indeed every bit as much of an art as they are a science, but I would add that the more experience one has with a specific market, and with the technologies, initiatives, and other forces that enable or govern the market, reduce the "artistic", "emotional", or "gut-feel" component.
As for the digging into the "figures" (before overlaying facts), that helps me abstract a case, and minimize my preconceptions. I never know exactly what end result I am going to come up with as I drill down. Sometimes I am surprised, and modify my "behavior" or plan as a result.
Underlying all this (as you know from occasionally visiting my home thread) I invest exclusively in market leaders, or what Geoffrey Moore would call Gorillas or Kings.
<< My style is a little different. Though I naturally consider the past few quarters' facts and figures to be important, as a LTB&H investor, I also try to seek out trends. In my view, these are equally significant. >>
We all have different styles, backgrounds, disciplines, viewpoints. Again, that is where active (or depending on the board - passive) participation in the Silicon Investor boards can potentially be a real benefit.
We are both in agreement, it would seem, that "seek[ing] out trends", is pretty fundamental to LTB&H, although a Buffettologist would probably say (at least to a greater degree than you or I might say), to heck with trends - once you've made that original decision stick with it.
I would like to add one comment and that is that in the wireless industry I think that looking back just a few quarters at abstracted "figures", financials, market share, growth, etc., is entirely inadequate, to deal with trends.
First, there is the seasonal nature of wireless (particularly in handsets), with each quarter having its own historic personality, and anything less than a one year peek providing less than really significant indicators as a consequence. Added to this are product cycles, channel stuffing, "breaks" in the supply chain, replacement cycles, etc, etc. etc.
<< Nokia is going to have some serious problems with its Asian competitors, particularly Samsung ... Historical facts and figures with respect to Samsung are admittedly few. Making an accurate call concerning its future is therefore difficult. >>
There are certainly any number of competent Asian competitors that are attempting to be major players in wireless handsets (and infrastructure).
My general feeling is that before these Asian competitors hurt Nokia, they are going to hurt each other, and before they hurt Nokia they are going to hurt the lower tier Europeans, then impact up the "Big Three" ladder. Of the "Big Three", my feeling is that Motorola is the most susceptible to impact from the Asians. The "up and comer" looks to me like the Sony Ericsson JV, right at the moment, and Siemens looks like they need a (Asian) partner if they are going to stave off Samsung. I sense that the gap between Sony Ericsson and Samsung, is going to widen this quarter and next, and I would be the 2nd to say (Tero said it first and best) that Nokia faces tough competition for the next 2 quarters (at least).
I have great respect for Samsung and Samsung's wireless unit for a number of reasons, but Samsung illustrates what I mentioned above about looking back more than just a few quarters.
If you look at Samsung's market share performance this year, you say wow, they went from 4.8% to 7.5% in just 6 months on a quarterly basis (and 5% to 7% on an annual basis). Digging deeper you say, wait a minute, they were at 6.2% on an annual basis in 1999 and now they are at 7% on an annual basis. They have gained < 1 point of market share in 2 years (13% growth) while Nokia has gained 7.1 points (26% growth) in the same period and the market share gap between Nokia and Samsung has widened by 6.1 whopping points.
The question now becomes whether Samsung can continue to grow market share on a sustained basis while NEC, Matsushita, and LG attack them from below, and Nokia, Motorola, Sony Ericsson and Siemens counter-attack from above.
As you say, we don't know as much about Samsung as perhaps we should. For that reason we now have a Samsung thread, and hopefully you'll help contribute to a better understanding of Samsung Wireless and their potential.
On the surface of things we know that Samsung's success in the last 6 months has been due to some degree to their pioneering efforts in 1xRTT (where they will face more competition as others come up to speed), but it is also obvious that their success is due in no small part to being first to market, and best to market with (their own) color displays (another area where they will have plenty of competition. In addition we know that they had some success in TDMA, a market they have recently entered.
Beyond this, there is a lot we don't know. We don't know, for instance, how well they are faring in GSM, 2.5G GSM (other than the fact that they were a woeful 6 months late from initially promised GPRS shipments based on their formal release - unlike Nokia who shipped "on time" if only by the whiskers on their chin), and contracting for 3GSM handsets.
We also don't really know how profitable the Samsung wireless unit really is, because nobody has examined their financials.
All this good grist for the Samsung thread mill.
<< Not selling, but keeping a weather eye on Nokia at this time. >>
LOL! Whether you invest in Nokia or not is your business, but I'll be darned if I can figure out whether you are a Nokia investor or not - which again is your business. In one post you indicate you are and, in the next you indicate you are not. Are there 2 carranza's posting under the same name here or are you slightly schizoid? <g>
<< I see a few trends that should worry Nokia LTB&H investors. >>
Carranza, you list 3 trends (2 that are worrisome) that worry YOU.
They shouldn't, IMO, "worry Nokia LTB&H investors".
The reason I say that is that you seem to be looking at this through darkly QCDMA tinted glasses. In addition you don't often demonstrate much evidence that you have spent time familiarizing yourself with Nokia to any great degree, despite the amount of time you invest in this thread wearing those glasses.
In general, Quidiots seem to spend an abnormal amount of time "worry[ing] Nokia LTB&H investors", which makes me wonder if they don't worry just a little about Nokia ... which they should, IMO.
If I have time over the weekend I'll comment back, giving my perspective on the 2 trends that worry YOU and explain why what worries YOU doesn't worry ME.
Best and Happy Thanksgiving,
- Eric - |
