Go GigOptix Go

Go GigOptix! Go! In the last few days, GIG stock has gone up over 50%. Come on, tiny GIG. Keep that up and I might stay out of foreclosure. Don’t worry though. You don’t have to do it all on your own. AMSC, MVIS, and RSOL are helping too. Sort of. Well, maybe I shouldn’t mention it. Thinking that my public opinion can jinx a stock suggests more power than I think I have. Yet earlier celebrations stalled after posting the hurrah here. But hey, good news is happening, and maybe these stocks are having stuttering starts,  like the punctuated rumbling of dragsters before they release the brakes. Okay, my race is begun. Go GigOptix! Go!

For those that follow my stock activity, there’s been little to follow for the last year or so. On a macro scale, the markets have surged as big money went into big stocks, which is why the market indices hit new highs. My style of investing in much smaller companies languishes at such times, but eventually should succeed because small companies making progress become big companies which is eventually reflected in their stock prices and market caps – theoretically. Unfortunately, theoretically is working with the later part of eventually rather than the sooner part. That disconnect happening simultaneously across my portfolio at the same time that jobs are tight and houses were hard to sell meant that my semi-retired status radically retreated.

GIG now joins the group of AMSC, MVIS, and RSOL that have abruptly risen. The extrapolation of those successes is a fun exercise, but in each case the abrupt rise significantly slowed. Stocks don’t rise forever. Their prices are driven by investors who, until recently were mostly human. Investors take breaks. They also take profits. They also take time to decide what to do next. They wait for more news. And frequently, they wait to see what the other investors will do. Almost all of those stocks have recovered back to where they were in May 2012, only a year ago. A year ago I was already scrambling to find a life-sustaining income because my stocks had dropped so far. I require a greater recovery.

If you’ve never heard of GigOptix and wonder why I own shares, I have some other posts that describe GIG and all my stocks. The quick story on GIG is simple and dull, unless you’re a nerd, but key to the now everyday experience of streaming videos. GigOptix makes switches. See, I said it was dull. But they make some of the fastest switches in the world that allow for the increase in network bandwidth. The switches have very few moving parts. And GigOptix has very few competitors. As telecoms advertise 2G, 3G, 4G, and more, they are also advertising higher bandwidths which operate at higher frequencies which require faster switches. Sounds great.

I even think there is good data behind much higher valuations for GIG. The stock price is about the same as the revenue per share. A price to sales ratio of one is typical for a construction company, not for an electronics firm, not for a high tech firm, not for a leader in their industry, and not for a company in an expanding market with little competition. I usually use a conservative price to sales ratio of about six for a mature tech firm. Usually such a well-positioned company commands a premium and the price to sales can be as high as, well as high as the expectations of the investment community. Back in the days of bubbles, a price to sales of twenty wouldn’t be a surprise for such an investment. Within the world of my small cap stocks, we’re just coming out of the negative mirror image of the bubble.

About two months ago, my old posts about GIG and its earlier trading symbols of GGOX and LMRA began getting unexpected and international traffic. What community was interested and why? They didn’t leave notes, but I picked up hope.

I like my portfolio, despite its recent performance. AMSC’s superconductors and Tres Amigas projects are what the nation needs for improving power transmission efficiency. GERN may yet prove that at least one of their innovative cancer treatments radically improve and change the health care industry. You’ve heard about GIG. MVIS is always on the cusp of something stellar with their projectors that are so small that we may see them proliferate the same way cameras are part of so many devices. RSOL is in the solar industry, which should be an emerging market. If rational valuations had remained the norm, I believe that Dendreon’s success with Provenge wouldn’t have resulted in a crash in DNDN, the rest of my portfolio would be healthier, and I’d be spending more time volunteering for non-profits. Instead, I’m helping to run them (thank you HCLE as Project Director and NRM as Information Manager) for a fee.

My experience of the last few years is why I contend that my style of investing (Long Term Buy and Hold, LTBH) is only for those who can tolerate risk. I didn’t expect my tolerance to be so painfully tested. Of course, I hoped to demonstrate that tolerating some risk provides the opportunity to experience above average rewards. That style had been successful for thirty years, and then I wrote a book about it (the basis for this blog), and it came out as the financial system radically changed and imploded. Dream. Invest. Live. With timing and seemingly jinxing like that, you might understand why I am reluctant to publicly celebrate investing success.

This blog is becoming known for its openness. That openness is intentional because so much of our lives are defined by the flow of money, and yet that’s where we hold many taboos. Some of the most passionate people, artists, are very aware of the positive emotional value of compliments and good graces, and simultaneously the necessarily unpassionate value of sales. I’m fortunate enough to have some small portfolio remaining. Its contribution to my financial recovery is necessarily part of my story; therefore, I tell it.

If my recovery relied solely on my portfolio, then my portfolio would have to grow twelve-fold to get back to where it was when I started looking for jobs. The greatest reduction has been my sales of DNDN which ran out about six months ago, which is also when I stopped paying my mortgage. (The mortgage and foreclosure news is so confused, good and bad and odd, that I can’t find a way to write about it, yet.) The part that is hard to believe emotionally is that logically my portfolio can be worth much more than a twelve-fold growth based on mathematical analyses of the companies’ potentials. MVIS’s potential valuations are so high that most investors are embarrassed to mention them, especially considering how many times MicroVision has postponed their success. But it isn’t hard to imagine such a pervasive technology becoming a $5,000,000,000 company, which means a hundred-fold increase in the stock. (See, I told you it was hard to believe.)

If my recovery relied solely on my consulting and art business, and on my part-time jobs, then some radical raises in sales and rates are required. It is possible. Walking Thinking Drinking Across Scotland Best-sellers do happen and Walking Thinking Drinking Across Scotland continues to slowly increase its sales. Larger consulting jobs continue to arrive. Unexpected opportunities can work wonders.

Selling my house actually doesn’t have as large of an effect on my recovery because it doesn’t add wealth. The house sale limits the debt I’m accruing. The weaker effect is why selling my house is one of my later backup plans.

I don’t expect GIG to be my sole solution. I don’t expect anything shy of a lottery jackpot to take on such a role. But I will cheer on each positive, hopefully adding energy and enthusiasm into my life emotionally, and financially. So, Go GigOptix! Go!

About Tom Trimbath

consultant / entrepreneur / writer / photographer / speaker / aerospace engineer / semi-semi-retired More info at: https://trimbathcreative.wordpress.com/about/ and at my amazon author page: http://www.amazon.com/-/e/B0035XVXAA
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3 Responses to Go GigOptix Go

  1. Jim Cain says:

    Tom,

    Did you see this in LinkIn?

    Intellectual Venturesposted a job you might be interested in: Sr. Program Manager OCTO, The Office of the CTO, is developing a number of long-range programs that will expand IV’s ability to leverage its talent, assets, and capabilities. Each program is a new business model that creates ways to invest and monetize intellectual… Bellevue, WA Jim Cain (425) 647-6661

    ________________________________

  2. I’ve applied there a couple of times because I am definitely interested in what they do. Thanks.

  3. An update on GIG: Nothing phenomenal, which may explain the lack of action in the price. http://finance.yahoo.com/news/gigoptix-reports-third-quarter-fiscal-200500396.html

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