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Hi J. I've not yet sold any calls against IDTI. That only starts once I've fully funded my "cash reserve" for any particular stock. IDTI's rises have always stalled short of my getting to that point.For a stock like IDTI, the goal is to achieve a 50% cash reserve near the current price cycle peak.
If you look in Value Line at IDTI's Book Value growth, I think you'll see that it is actually adding value for the shareholder, but that value isn't yet showing up in the stock price. It's doubled twice in the last ten years. Not bad on a compound basis. It would appear that it has stalled a bit in its growth as this new plant was being built. That plant has to generate profits and cash flow to pay for itself now.
Yes, these semi stocks are frustrating. My VLSI shares have made me nice money since starting in 1990, but it's like a ride at SIX FLAGS!!! It must be why there's really no "buy & hold" types that hang around these boards.
My own M.O. is to have a core position in a stock that has good long term (3 to 5 years minimum) potential and trade a small amount of shares around that core for fun and profit. So far, IDTI has fit the bill perfectly. It's classic "Plant and Harvest" work, while all the time the silo gets more and more full.
The shares I own in VTSS I fully expected to cycle in an upward maner similar to IDTI, but alas, it's been nearly a rocket ride since I started at about $3.50 per share. That stock frustrates me in that I rarely get a chance to do the "Planting" part of the cycle. Just "Harvest." Well, I usually can find something to complain about in each of my investments!
I've very much enjoyed the IDTI board. I've learned more about the "commodity" end of the semi business than ever before. It compares to the disk drive mfgs with the boom/bust cycles. What's fascinating is that there's so much "guilt by association" involved. Some semi mfgs that have nothing to do with memory chips get slammed right along with the SRAM/DRAM guys. According to David Dreman, that's just herd mentality taking over. It's difficult to break free of the market psychology, but once done, these odd stocks can be profitably owned.
Sorry for the keyboard ramble!!
Best regards, Tom |
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