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Strategies & Market Trends : Gorilla and King Portfolio candidates - Moderated -- Ignore unavailable to you. Want to Upgrade?

To: BDAZZ who wrote (1870)	4/18/2006 3:55:51 PM
From: Eric L	Read Replies (2) \| Respond to of 2955

Emotional Investing and Gorilla and King Investing ... BDAZ, << One of the biggest mistakes in investing is getting too emotionally bogged down in loyalties to a present or past king. >> I'm sure you have a copy of TFM ot TRFM handy so you might note that in Rule 6, Geoff states that this way: "Hold kings and princes lightly, selling individual stocks on a marketplace stumble ..." ... but I would suggest to you that getting emotionally bogged down in ANY company or its technology is a mistake -- whether that company be a Chimp like QUALCOMM, a King like Nokia. or a dominant Prince like TI, the market leader in both 2nd generation and 3rd generation wireless ICs. Every company has its 'nutball fringe' but as Andrew Orlowski stated ... I get a lot of mail from the nutball fringe of Qualcomm's barmy army of loyal headbangers which is truly in a class of its own. ... Now, not all Qualcomm defenders belong to right-wing militia groups, but a weirdly disproportionate number would seem to qualify. There's an interesting debate about how fringe technologies (such as CDMA) attract nutters, and how nutters are drawn to fringe technologies (such as CDMA), but it's one best left to another place, and more qualified psychologists than me. << At one time analog dominated the present. >> Yes it did, and in 1992 the 1st all digital circuit-switched networks launched in Europe and quickly spread globally. In 1997 NTT DoCoMo launched the 1st all digital network with a packet switched bearer, and they commercially launched the 1st 3G WCDMA network in October 1, 2001. In Q1 2006 -- 4½ years later -- WCDMA displaced CDMA as the 2nd most widely deployed technology in Japan and in the next 8 to 12 months WCDMA will displace PDC as the dominant technology there. Early in the next decade it will likely displace GSM as the dominant global technology, and as early as 2009, and certainly not later than 2010, sell-in of handsets based on 'cdma' based technologies [CDMA+WCDMA] could (should) outnumber GSM handset sell-in. << Investing is about the future, all the rest is BS >> Since you brought up the subject of investing mistakes, one mistake that I think wireless investors continue to make is overestimating the pace and scale of new generation technology adoption and implementation. The future remains the future for longer than we anticipate, and as enticing as that future may be it is sage to not lose sight of the near term present. From and investing decision point of view and particularly as it relates to royalty in a gorilla-less market like wireless, an investor holding a king or dominant prince continuously needs to unemotionally evaluate whether the erosion in the King's market position and any reversal of fortune as to margins, cash flow, etc. ... and in the case of generational transitions whether or not the King or Prince can maintain its market leadership position in the new generation. << Orlowski would probably rather not be continually reminded of who turned out to be the real nutball in the QCOM drama. >> I suspect that Andrew still immensely enjoys driving the nutters nuts by calling a spade a spade or an overly-zealous nutter a nutball. As Rory noted, I sometimes do. <g> It is wise to remember that the "fringe technology" that Andrew was referring to back in 2002 was CDMA, not WCDMA, and at that time the e-mailing nutball fringe he was referring to was extolling the virtues of CDMA2000 and/or GSM1x and referring to WCDMA as fatally flawed. Referring to CDMA as "fringe technology" is certainly a bit harsh. CDMA is after all, the dominant technology in Korea, the USA, and Canada; accounts for >13% of the worlds subscriber base which will exceed 2.5 Billion connections this year; and is still growing in actual terms. That "fringe" is actually a mass market and QUALCOMM is a legitimate gorilla in that market. A milder and kinder appellation would not have gotten the nutball fringe of QUALCOMM's barmy army of loyal headbanger's creative juices flowing, however. Glad to see you on the 3GSM UMTS (WCDMA) bandwagon. I've certainly enjoyed our dialogue (or your monologues) over the years on Fooldom's QUALCOMM board. Cheers, - Eric -