Is Texas Instruments Worth The Investment? [View article]
TI Seems to be losing market share in key areas like mobile. Stock is trading about 15% below intrinsic value. Not bad but not great either. QCOM may have some supply issues but they are the tiger in mobile which is where you want to be. Valuation there even more attractive.
Why I've Changed My Mind About Zynga [View article]
The article and comments certainly raise questions about the management and process at Zynga which is cause for concern. Zynga has a great business though based on return on invested capital and they have a track record of creating very engaging content for mobile and social users. The valuation at these levels is pretty compelling as well.
That said I think it's a good time to take a step back and look at this one anew to confirm that this it's an investment worth making here.
The valuation of Amazon is high. In fact the 2012 IV for $AMZN is $220 so it's there now. However the 2013 IV will be higher. We'll have to run it soon. Suggests not buying it here if you are looking for 2012 returns.
If Vringo Was The Inventor Of Google Search, They'd Have Invented Google Search [View article]
James is correct in that this conversation about patent law doesn't apply directly to Vringo but lately we are seeing much more widespread attention to using patents as a business instead of to build a business.
It seems like everything is patentable and there is little review of prior art from a deeply fundamental view. As long as *something* in your application is different it gets approved. Or the famously broad patents that seem to represent more of a way to tax things than anything else. The amazon "one click order" comes to mind.
In short it feels like there is not enough rationale in how the system is run and it's an important system. Huge corporations file for thousands of tiny little patents for things that they clearly don't need "protection from" but it's part of the game. If a new drug gets invented and requires $1B of development it needs patent protection. A different kind of thread on a bolt for a particular type of fastener doesn't seem at all similar yet gets the same patent. Just rambling now I know...
Voldemort's Got Nothing On Jeff Bezos [View article]
The question of necessity may not be the right one. I mean books and movies are not necessary. But we like them. Getting them in an easy and efficient way is also appreciated. iTunes and Amazon are big helps there and as a consumer am happy for these companies to make some money in making my life easier. As a publisher I'd day the exact same thing. It's really an agency model that works for most things and that's what Amazon is.
If Vringo Was The Inventor Of Google Search, They'd Have Invented Google Search [View article]
Okay then if you don't have the resources to develop it you have to make it available for licensing via a fee, royalty, auction, something. Right now there is no recourse for anyone and the whole thing is just a gooey mix of IP that inhibits activity and growth.
It doesn't have to be "one size fits all" but rather a process that is redesigned to do what it is supposed to do, encourage innovation and investment while protecting the rights of the inventors. We act like "it can't be done" and are ready to live with this silly and massive system.
When the system gets to a point where massive companies are just buying blocks of patents by the thousand you know it's past the point of fixing.
Maybe patents should not be considered property or assets but only a temporary (and fee generating) right to use or license. Feels like the risk/reward has tilted against the entity that is willing to do the hard work to turn something into an economic business in favor of those who patented an idea which they have no intent on developing.
If Vringo Was The Inventor Of Google Search, They'd Have Invented Google Search [View article]
I hope the patent system evolves. Everyone agrees that it's broken. One aspect that is really missing is the obligation to invest and attempt to develop it. It's too easy to just file patents to protect and defend an idea and not do anything with it. When you search the patent filings on ideas you have it's often astonishing how many patents exist for some obscure but basic idea (like tracking where a tennis ball bounces on the court). It prevents you from attempting to develop a new product because it looks like some number of these could be used to sue you even though the holders are just sitting on them. The rule should be that if you don't show some verifiable investment and activity in the development of a patent for a some period of years you should lose it.
Vringo Stock Doubles On Patent Potential [View article]
I'm not a fan of Mark Cuban but I don't think he is dumb or wants to throw money away (even though he can afford to make lots of mistakes and still be rich.)
The Cuban stake is generally encouraging because it implies a bit more due diligence and some broader awareness of what Vringo is up to. However it should be viewed with some caution since it's impossible to know how serious Cuban is about holding these shares. If he decides to remove his bet all those shares will be coming back.
First Solar Has Been Facing Cloudy Weather [View article]
I think the problem is that nobody believes the revenue forecast or the "E" in the P/E of 5. Expanding A/R and Inventory into what will be a soft year is ominous.
Some investors are also worried about warranty costs but I suspect they are overblown. We wrote more of an assessment of the company about a month or two ago and I think the stock is down 20-30% since then.
One name I think is intriguing is Enphase $ENPH which recently stumbled out into the public markets at a discount from their proposed price. They seem to offer revenues that scale more directly with units rather than the prevailing "more units, less revenue" dynamic of the cell and panel makers.
If Vringo Was The Inventor Of Google Search, They'd Have Invented Google Search [View article]
Research should indeed be separate from trading, that's for sure. However online they get mixed up and it's hard to have a discussion because nobody knows how to define "research."
For some research is looking over thousands of charts and coming out with "going long XYZ at 40.14 with a stop at 39.40."
For others it's more like "we've tested the new ABC mobile application and it required a string of nine manipulations with an average latency of 800ms on a 4G network which makes it 10x slower than currently available offerings from Foo and Bar. We conclude the new offering will not contribute to revenue and earnings in the next 12 months despite expectations that this will drive an incremental $2-4M in online subscriptions."
Compounding all the challenge here is that IP/patent legal analysis is hard and more binary than fundamental growth. As I said before I think knowledge of any "research" or analysis that includes knowledge that it will be published in a major media outlet constitutes material non-public information so one must be careful there.
Is Texas Instruments Worth The Investment? [View article]
The Promise Of B-Corps [View article]
Why I've Changed My Mind About Zynga [View article]
That said I think it's a good time to take a step back and look at this one anew to confirm that this it's an investment worth making here.
Amazon: Now Comes The Hard Part [View article]
IPO Preview: Edgen Group [View article]
If Vringo Was The Inventor Of Google Search, They'd Have Invented Google Search [View article]
It seems like everything is patentable and there is little review of prior art from a deeply fundamental view. As long as *something* in your application is different it gets approved. Or the famously broad patents that seem to represent more of a way to tax things than anything else. The amazon "one click order" comes to mind.
In short it feels like there is not enough rationale in how the system is run and it's an important system. Huge corporations file for thousands of tiny little patents for things that they clearly don't need "protection from" but it's part of the game. If a new drug gets invented and requires $1B of development it needs patent protection. A different kind of thread on a bolt for a particular type of fastener doesn't seem at all similar yet gets the same patent. Just rambling now I know...
Voldemort's Got Nothing On Jeff Bezos [View article]
If Vringo Was The Inventor Of Google Search, They'd Have Invented Google Search [View article]
It doesn't have to be "one size fits all" but rather a process that is redesigned to do what it is supposed to do, encourage innovation and investment while protecting the rights of the inventors. We act like "it can't be done" and are ready to live with this silly and massive system.
When the system gets to a point where massive companies are just buying blocks of patents by the thousand you know it's past the point of fixing.
Maybe patents should not be considered property or assets but only a temporary (and fee generating) right to use or license. Feels like the risk/reward has tilted against the entity that is willing to do the hard work to turn something into an economic business in favor of those who patented an idea which they have no intent on developing.
Amazon Stock Analysis: Strong Sell [View article]
If Vringo Was The Inventor Of Google Search, They'd Have Invented Google Search [View article]
Vringo Stock Doubles On Patent Potential [View article]
The Cuban stake is generally encouraging because it implies a bit more due diligence and some broader awareness of what Vringo is up to. However it should be viewed with some caution since it's impossible to know how serious Cuban is about holding these shares. If he decides to remove his bet all those shares will be coming back.
On balance I'd say it's a +.
First Solar Has Been Facing Cloudy Weather [View article]
First Solar Has Been Facing Cloudy Weather [View article]
Some investors are also worried about warranty costs but I suspect they are overblown. We wrote more of an assessment of the company about a month or two ago and I think the stock is down 20-30% since then.
One name I think is intriguing is Enphase $ENPH which recently stumbled out into the public markets at a discount from their proposed price. They seem to offer revenues that scale more directly with units rather than the prevailing "more units, less revenue" dynamic of the cell and panel makers.
If Vringo Was The Inventor Of Google Search, They'd Have Invented Google Search [View article]
For some research is looking over thousands of charts and coming out with "going long XYZ at 40.14 with a stop at 39.40."
For others it's more like "we've tested the new ABC mobile application and it required a string of nine manipulations with an average latency of 800ms on a 4G network which makes it 10x slower than currently available offerings from Foo and Bar. We conclude the new offering will not contribute to revenue and earnings in the next 12 months despite expectations that this will drive an incremental $2-4M in online subscriptions."
Compounding all the challenge here is that IP/patent legal analysis is hard and more binary than fundamental growth. As I said before I think knowledge of any "research" or analysis that includes knowledge that it will be published in a major media outlet constitutes material non-public information so one must be careful there.
Harris And Harris Group: An Undervalued Technology Stock [View article]