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Technology Stocks : Wi-LAN Inc. (T.WIN) -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (6393)	3/25/2001 1:05:02 AM
From: Dexter Lives On	Respond to of 16863

Hi Jim. That is a very tough question and I apply my usual test (for my own investing - everyone should develop their own). Where do I see the stock price in 1 year based on the fundamentals that I've ascertained about the company, industry and the general economy. In a bull market, that question is much easier to answer, since the tide is generally rising. In a bear market, one has to be aware of historical extremes to get a sense for the risks one is taking. The Nasdaq market has corrected some 63% from its peak. This exceeds by 5% the 73-74 drop. So if you're in a tech. stock that moves with Naz is it safe to go in? Clearly the answer is different if you ask my 1 year question above, or ask yourself if you're picking the bottom. I never ask the second question. I'll average in below a price I think is CLEARLY undervalued. Now, will the markets come back? For me that is the trickier aspect since you have to assess the truth of what the market is discounting (and properly gauge what it's pricing). These are difficult questions for the best trained economists and market strategists in the world - let alone some guys trying to increase their retirement bundle. My own opinion is that the Nasdaq is pricing a medium recession; demand in telecom is forecast (implicitly) to drop off until a significant consolidation takes place. Hence my repeated calls for the death of 3G. Wi-LAN's promise lies in its potential payoff. Rightly or wrongly, I view a share in Wi-LAN as a piece of a very desirable market in a company that may hold a special advantage therein. I don't know if you caught the OFDM Forum Feb. 2001 minutes but there were some interesting bits: Breezecom: "What do you mean by fair?" Wi-LAN: "The intent to go to the lowest point in the value chain has been demonstrated as has the willingness to license to semiconductor manufacturers or anyone else wanting to implement ETSI or IEEE." ofdm-forum.com You know as well as I the potential market here. You know better than I (since you've been in Wi-LAN longer) that the payoffs can come fast and furious if it's IP is validated and accepted. This is no ordinary company and to view it that way (as the market has done) is somewhat silly. One thing I will say is that Wi-LAN is taking longer than the market expected to have its technology adopted, but given the scope of what they're trying to achieve, I believe that it's understandable. In a vicious bear market though, people leave their patience at the door. A problem with Wi-LAN that I see is that it is misunderstood. On one hand it's technology and industry are highly technical and the regulatory impact greater than many industries; on the other hand it is a product company and an IP company. The latter is very difficult to value (watching people on the QCOM threads trying to justify the valuations against this bear backdrop is almost sad and definitely painstaking) and will inherently result in very volatile prices. The problem with investing IMO, especially with a company such as this one, is timing. Do you want to be there if a big deal is struck? How high can it go? Will you ever have such a good opportunity to get in? One thing to take away is that some of the best strategists say to buy when people are claiming the fundamentals are at their worst. I think this has been true in every downturn since the 30's. I'm betting that this one will be no different, but I'm not near retirement and don't need liquidity. My approach would be more conservative if those two things were different. Regards, Rob