Hi John,
You're dragging me into this SI "thing" again :)))
Regarding Intel making investment in some company, I don't think that the future of those companies are warrantied. Check Xircom (XIRC) for instance, Intel bought in 20% at about $20, stock is now below $10. Similarly, Intel has a stake in SystemSoft at $15-$20, I believe, stock is now around $7.00. Intel, with its deep pocket, will invest in any company that will help sales of its Pentium. Kind like Microsoft investing $500M in Web TV and never expect to make any money. Anyhow, that does not necessarily mean that Intel's investment in MRV is bad. I think in this case, Intel has a winner.
But I should be concerned that MRV is serving Intel's purpose by making those low end networking equipment. In the long run, it's the high end products that will bring in more profit margin and keep the company away from the competition. That's why I said, if I am a long term MRVC investor, I should call Noam and find out what his vision for this company is about for the next five years.
Despite this GE slowdown, MRV is still strong in the Fast Ethernet market (which has no problem), and may be in the IP switching (I say may be because I'm still not convinced yet that MRV has resolved all the QoS issues).
I hear you John, regarding your concern about aging. I am not getting any younger either. Every day goes by and our stock is down 50% does not give you and me any good feelings. All the stock gurus would say invest for the long term and the stock will recover, don't worry, be happy. Man, I have no idea what the world or US economy will be in the next few years. I read an article in my local paper last week and it gave me a scary wake up call. They did a survey of people and asked what do people expect for yearly gain in the stock market? Well, all these baby boomers who have never experienced a real bear market, answered they expect a 34% yearly gain. 34% yearly gain doesn't sound very bad, knowing that you can invest in INTC or MSFT with no brain and get 40% gain per year. But do you know that if the Dow has a yearly gain of 34% compounded for the next 10 years, what its value will be? It will be 140,000 in 10 years!!!! Do you think that the Dow will get there? My take is that we will have just a few more years to make money in the stock market before a major crash will happen and T-bill will be the only safe investment.
Back to this MRV "thing", I think you and I can sit here and speculate about this GE problem and the future of MRV, and we could be 100% wrong. Personally, if I own stock in this company, I will give Mr Noam a call and hear from the source. Noam is an honest and decent man and I fully expect him to give you a straight answer.
Good luck to you and to everybody.
Mike. |
