Anal Reprieve

Just for fun. I noticed tonite a portfolio holding, GIVN, announced something to be construed as negative on their path to greater internal diagnostics. This is a profitable company with a proprietary and leadership position in a minimally invasive and necessary diagnostic field. The stock is already significantly umdervalued IMHO. If it prints down tomorrow I am a buyer. Please do your own due diligence but I regard this as a significant buying opportunity. regards. shb

Out With The Old, In With The New

I have to say I like to see CSCO and INTC and MSFT falling apart. I have been against these names as bloated and done for years. That these names remain perennial go-to tech favorites is a major hurdle to the market going higher in my opinion. When I started in this game in 1996 those companies were the leaders but at that point were small and went up 10 and 20x. That was then, where is a $200 billion company going to go?, up and down 15%. That isn't the leadership we need for a bull run in tech, we need new companies that represent the early stage of a cycle that these names did 10 years ago. Below are my favorite areas and stocks to lead a new tech bull.

Rapid manufacture/design
Software DASTY
Printers/manufacture equip SSYS, TDSC
3D Laser Measurement FARO

New Vaccine Production
CRXL, VICL

Next Generation Surgical/Radiation Tech
TOMO, ARAY, HNSN, GIVN

Nanotechnology
NANX,UTEK

Power Efficiency/Clean Tech
ELON, OIIM, MBLX, LYTS

RFID/Wireless Transaction
ZBRA

Advanced Military Unmanned Vehicle
AVAV

Home HIV Test
OSUR

Display Tech
MVIS

This is a small sampling for the time being. Some are more speculative than others but represent a group of potentially disruptive new technologies at small cap prices and market position to lead in the coming years. Good weekend to all. These are just ideas I like and certainly no recommendation, if interested do your own due diligence please. Support some music and buy something online this weekend. Music is good for you in these rocky market times. Lamb of God?

Evening Rules and Rant

Here is rule number one; don't game events. Watching TV is retarding. These people have no idea whether the market has factored Mylie Cyrus into DIS estimates or not. I say adamantly - WHO CARES!. One the music is just awful and 2 you shouldn't be buying stocks hoping some small element of a business is not factored into earnings. What is $30 mil in ticket revs for Hannah Montana and the gang worth to a $60 billion company? I don't know; neither does anyone else. Buy stocks for long term catalysts that the market isn't considering. Since my contemporaries seem to be gaming non-events as discussed, this isn't tough. If you buy a company for longer term broader themes, a short term misstep, like taking your kids to see Hannah Montana(I sent the wife) won't matter. Second mistake I will highlight tonight is the commodity semi component supplier. SIRF is down after hours, big! Don't buy these companies, ever, as a rule. These are never long term stories. Please find me one - ZRAN, GNSS, SGTL, TRID, CRUS, PLAY(I am leaving out hundreds) and now SIRF. If you find a semiconductor company that sells into one consumer niche - DON'T BUY!!!!!. If you are trading it and have insight into the demand cycle and specific design wins, go for it. If not, there are always going to be a bunch of new sheep to be herded off to slaughter with every new consumer gadget, extrapolating infinite growth. EX. If every person on earth buys a flat panel tv multiplied by Y billion people, blah and blah and blah. NO! The end market prices of the products(flat panel, cell phones, DVD, MP3, GPS, etc. etc.) comes down so fast these component plays always end up in the garbage. Please, I challenge you to find otherwise. Couldn't help myself from ranting bout this, its a mistake made over and over again, one I have made myself, but never again. Today my portfolio held up very well. After a disastrous year last year and beginning to this one, we are heating up. I believe we have exposure to all the technology areas with the most potential at what I consider cheap prices because everyone is still infatuated with GOOG and INTC and RIMM. When we go higher its lead by a bunch of new tech and tomorrow I give it all away. Every hot new area and every company I own for exposure. Just know I change my mind a lot :) Rock and roll.

Break My Rules Buy a Semi

Heading into the weekend I have a thought or two. First,learn something from this yhoo deal. Last nite on Fastmoney the pundits were talking about GOOG suggesting it was cheaper than YHOO with the sell off after earnings. That is only a partial truth. P/E is only one measurement of value and yes on this comparison goog is cheaper. By any other metric it is much more expensive; price/book, price/revs, price/you-name-it. P/E is a simple way of trying to make all stocks equal and blanket assess valuations. It is also useless without context such as market valuation and balance sheet considerations. GOOG is pushing the limits of size for any company and trading 15x + revenues is ridiculous and the p/e is more a function of creative accounting than value. GOOG may end up being the greatest company in the world, but at these prices it has to be for the stock to go higher. It is a $150 billion company on $11 bil in current year revs. Instead of treading in these dangerous waters, let's look for opportunity where expectations are lousy and prospects good. That is where risk is diminished and upside equal or better than situations like GOOG. Everyone hates semis since INTC disappointed and as usual the market has thrown out the baby with the bath water. I generally shy away from semis as sellers of commodities but prices in some spots are just too low. Look at OIIM and UTEK. Both companies trade about 1x revs ex-cash and 1.5 x book. OIIM is a fabless semi with a huge amount of patents and great 5 year growth and is trading less than 10x forward earnings. With products for minimizing power consumption in computing and LED back lighting this company should continue to grow. UTEK sells semi cap equipment for next gen nano fabricated semi products. Trading 15x froward earnings and roughly half of that ex-cash this is a low risk play on nano, a huge area that for the meantime has been left for dead by investors. Further, when you compare valuations with these companies' larger peers both are cheap on relative valuation metrics and would make interesting acquisition candidates. I dwell where others don't to mitigate risk as there are discounts in out of favor areas as opposed to premiums like in the GOOG complex. In my opinion OIIM has a significantly better chance to double from current prices than goog and significantly less risk. Unlike GOOG where the future hope is Content being king, I say Context is king. The market uses single valuation metrics like p/e as a way to distort this reality, don't fall prey. Good weekend to all.

The Economy and Stocks to Buy Now!

Good day.
Here we go. Today the market is wavering. Is the creation of new wealth and prosperity in emerging economies enough to offset US bubble hopping(stocks to real estate to commodities and back...?). That is the question and as much as I think the US housing market is a disaster created by horrific policy; my answer is a resounding yes! In spite of everything in the mortgage markets, we will overcome and prosper. I believe we are on the cusp of a multi decade global boom led by the global proliferation of the consumer. The US is no longer in a vacuum and if some of our poorest elements are house poor(or even without) for a few years, it ain't gonna matter. The world is growing and the US continues to develop the best technology in the world, from software to medicine and everything in between and overlapping. Beyond that, the rest of the world still covets westernism and everything culturally American. Couple that with American greed and patriotism and this empire is far from crumbling. Until other societies prove they will support and endeavor massive financial and personal risk to innovate and create for the sheer benefit of wealth and recognition, The US will continue to lead. It didn't happen with Japan and it won't happen with the new challengers. The best and most innovative and therefore profitable products will continue to emerge from the US and that means our markets will go higher after we get over this housing debacle. The government will fix the housing problem because they created it. I believe not a single subprime loan is ethical. These loans were sold to people that had no concept of what they were getting into. There is a legal term 'unconscionable' meaning 'shockingly unfair or unjust', which succinctly describes these loan products. Mortgage companies behaved as predators preying on the informed and lying to them about the continued and infinite appreciation of their homes in support of any transaction. In any other business or contract negotiation all parties involved need to be properly informed and of equal position informationally to enter into a binding agreement, hence you must seek legal advise prior to signing. If you enter into a mortgage contract that you don't understand and will ruin your financial existence, no problem? Come on, Government and Wall Street got carried away and screwed this one up and they know it. Why else was Bank of America proactively seeking out troubled borrowers to restructure mortgages?, out of kindness? Please. The involved parties know this is on their head and they will fix it.

Given this, the rest of the world is set to boom for a long time and several new technologies have the potential to be disruptive and change our world. This is where I try to dwell. No MSFT or INTC for me. I believe in limitations of absolute valuation. In other words there is only so big a company can get and there are only a few $200 billion companies; so why bet on the big getting bigger when odds are against you and size is limited by the finite nature of any economy. Let's bet on companies that can grow for years without challenging for largest and most unlikely company in the world.

Digital manufacture changes the way we design and manufacture products. Software helps us design products faster and collaborate more efficiently. Here I own the leader DASSAULT SYSTEMs (DASTY). 3D laser measurment devices for reverse engineeering and quality control, Faro Technologies (FARO). Systems for Rapid Prototyping and Digital Manufacture; Stratasys (SSYS) and 3D Systems (TDSC). I believe these Nasdaq listed companies are all good values with exceptional growth prospects going forward that are misunderstood by the broader market. Digital design and manufacture has the potential to become pervasive and embedded in our culture. I believe one day these products are as common as a ruler or 2D printer in every home and handyman's possession. At these valuations I think these are the greatest opportunities to participate in a technological revolution I have ever seen. Have a good day and good luck.

First Post

Hello all(any echoes?)
I run a portfolio of small cap companies with market leading technology in each particular area. My goal is to identify underappreciated companies before they are over appreciated so we can make some money. I am generally contrarian and sickened by the majority of stock commentary in the media. It seems to me the majority of these 'experts' don't understand what the companies they talk about even do. I have in the past written for one of the major financial websites and now hope to continue to offer ideas on stocks and the market unfettered by traditional media's rules. Everyday I hope to comment on what I believe are opportunities and what I believe to be nonsense in the machine of the market that we should be wary of. Please contribute your thoughts, I am new to this format so if I make a cyberspace gaffe please fill me in. Let's rock.