racemize Posted January 8, 2014 Share Posted January 8, 2014 IP law - 8 years. focus on wireless as of late. Ever look at Straight Path Communication? It is a spinoff from IDT Corp. They are litigating against some of the biggest names in the tech space based on their patents related to communication over the internet. I've spoken with the CFO and it is obvious that the patent litigation has near term catalysts. I like the way how they structured the spinoff and outsourcing their litigation expenses on a contingent basis. Their philosophy is to minimize cash burn. Over $100mm of NOL will shield any patent litigation rewards and spectrum licensing revenue. I haven't--the issue I have with the patent field is that it takes an extraordinary long time to figure out if a patent is valid, much less an entire portfolio. Then you have to understand the competitor's product and what arguments will hold in court (takes a very long time). Then the actual court or licensing results are very hard to predict. If there are a few key patents that have survived litigation already, and gotten high licensing or verdicts, then it starts to get easier. Overall though, I view the other stuff on the forum easier to understand and invest in than anything in my own field. What do you think of the valuations that value investors attach to patents? Well, it depends on the situation I guess. I tend to think the wireless portfolios have been in a bubble since the great patent war of the 10's started. I figure when everyone calms down quite a bit, there won't be any big buyers left. Particularly for companies that are trying to get their portfolios built up--once they are done, there won't be big wallets around to pay up for any new portfolios up for sale. That being said, whenever there is a big company that was in the forefront in the standards meetings and has a huge portfolio, it is pretty easy to guess that there are at least a few patents of significant value. A lot of times the value of a patent portfolio will come down to a relatively small number patents that can't be (or aren't) invalidated and hold up in court. I think attaching a certain value per patent and assigning that to any patent is ridiculous, though. Most patents are not very valuable at all. Link to comment Share on other sites More sharing options...
compoundinglife Posted January 8, 2014 Share Posted January 8, 2014 Architecture for me. PS...In the design and engineering field, Autodesk is a monopoly, and has always been. Their moat is an ocean. They have complete pricing power, there are no alternates for us. This has been the case for decades. Adobe as well but not to that extent. Yeah, I recall that Autodesk is the goto software for the drawings. Is there a price point where people say I'll try something different? Kind of like what's happened with Gillette's razors? What do you think is separating them from the #2 and #3 guy in the space? Is it kind of like Excel for investment bankers? You're not going to send your clients a file in google docs Excel. Autodesk is doing a ton of research in genetics right now and I believe is trying to position themselves similarly in that industry. Link to comment Share on other sites More sharing options...
onyx1 Posted January 8, 2014 Share Posted January 8, 2014 IP law - 8 years. focus on wireless as of late. Ever look at Straight Path Communication? It is a spinoff from IDT Corp. They are litigating against some of the biggest names in the tech space based on their patents related to communication over the internet. I've spoken with the CFO and it is obvious that the patent litigation has near term catalysts. I like the way how they structured the spinoff and outsourcing their litigation expenses on a contingent basis. Their philosophy is to minimize cash burn. Over $100mm of NOL will shield any patent litigation rewards and spectrum licensing revenue. I haven't--the issue I have with the patent field is that it takes an extraordinary long time to figure out if a patent is valid, much less an entire portfolio. Then you have to understand the competitor's product and what arguments will hold in court (takes a very long time). Then the actual court or licensing results are very hard to predict. If there are a few key patents that have survived litigation already, and gotten high licensing or verdicts, then it starts to get easier. Overall though, I view the other stuff on the forum easier to understand and invest in than anything in my own field. STRP Business Update scheduled for tomorrow, January 9, 9:30am EST http://finance.yahoo.com/news/straight-path-communications-hold-general-154600671.html Link to comment Share on other sites More sharing options...
Guest valueInv Posted January 8, 2014 Share Posted January 8, 2014 IP law - 8 years. focus on wireless as of late. Ever look at Straight Path Communication? It is a spinoff from IDT Corp. They are litigating against some of the biggest names in the tech space based on their patents related to communication over the internet. I've spoken with the CFO and it is obvious that the patent litigation has near term catalysts. I like the way how they structured the spinoff and outsourcing their litigation expenses on a contingent basis. Their philosophy is to minimize cash burn. Over $100mm of NOL will shield any patent litigation rewards and spectrum licensing revenue. I haven't--the issue I have with the patent field is that it takes an extraordinary long time to figure out if a patent is valid, much less an entire portfolio. Then you have to understand the competitor's product and what arguments will hold in court (takes a very long time). Then the actual court or licensing results are very hard to predict. If there are a few key patents that have survived litigation already, and gotten high licensing or verdicts, then it starts to get easier. Overall though, I view the other stuff on the forum easier to understand and invest in than anything in my own field. What do you think of the valuations that value investors attach to patents? Well, it depends on the situation I guess. I tend to think the wireless portfolios have been in a bubble since the great patent war of the 10's started. I figure when everyone calms down quite a bit, there won't be any big buyers left. Particularly for companies that are trying to get their portfolios built up--once they are done, there won't be big wallets around to pay up for any new portfolios up for sale. That being said, whenever there is a big company that was in the forefront in the standards meetings and has a huge portfolio, it is pretty easy to guess that there are at least a few patents of significant value. A lot of times the value of a patent portfolio will come down to a relatively small number patents that can't be (or aren't) invalidated and hold up in court. I think attaching a certain value per patent and assigning that to any patent is ridiculous, though. Most patents are not very valuable at all. Thank you, that's what I thought . Do you think the new efforts by the govt to squash patent trolls has any bearing on the general values of patents? Link to comment Share on other sites More sharing options...
constructive Posted January 8, 2014 Share Posted January 8, 2014 Architecture for me. Same here. PS...In the design and engineering field, Autodesk is a monopoly, and has always been. Their moat is an ocean. They have complete pricing power, there are no alternates for us. This has been the case for decades. Adobe as well but not to that extent. Yeah, I recall that Autodesk is the goto software for the drawings. Is there a price point where people say I'll try something different? Kind of like what's happened with Gillette's razors? What do you think is separating them from the #2 and #3 guy in the space? Is it kind of like Excel for investment bankers? You're not going to send your clients a file in google docs Excel. If you are doing something simple with 2D CAD or 3D modeling, there are plenty of cheaper alternatives to Autodesk. They are probably not earning large returns here. On the other hand if you are designing a non-residential building, you probably need a Building Information Modeling program. This lets the architects and engineers create a comprehensive 3D model & drawing set containing all data about the building. The complexity of these models, programs and workflows is orders of magnitude greater than Excel. The whole design team which often involves several companies generally need to use the same program. If you don't use Autodesk, you could lose work because other companies will not want to team with you. I'd say the ecosystem effect is stronger than Office. If you want to work in OpenOffice and send and receive Office files you can do it. Not really with BIM. Link to comment Share on other sites More sharing options...
west Posted January 8, 2014 Share Posted January 8, 2014 Yet another engineer. Systems software engineer for networking hardware. Woot internet! Link to comment Share on other sites More sharing options...
racemize Posted January 8, 2014 Share Posted January 8, 2014 Thank you, that's what I thought . Do you think the new efforts by the govt to squash patent trolls has any bearing on the general values of patents? Maybe for the invalid ones. I tend to think high value patents will still hold their price. Or said another way, I don't think that change will have much effect on the demand for the large wireless portfolios, but the factors I earlier above might. Link to comment Share on other sites More sharing options...
warrior Posted January 8, 2014 Share Posted January 8, 2014 Accounting – audit, Investment Portfolio management over 10years Link to comment Share on other sites More sharing options...
Guest valueInv Posted January 8, 2014 Share Posted January 8, 2014 Thank you, that's what I thought . Do you think the new efforts by the govt to squash patent trolls has any bearing on the general values of patents? Maybe for the invalid ones. I tend to think high value patents will still hold their price. Or said another way, I don't think that change will have much effect on the demand for the large wireless portfolios, but the factors I earlier above might. Cool, thx. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted January 8, 2014 Share Posted January 8, 2014 Otsog and warrior... I have some accounting questions. I'm shorting Avid, which is currently deliquent in its financial filings. The company stated yesterday that it is likely that the stock will be delisted from NASDAQ (and move to OTC/Pink). Here's what I don't understand about the accounting: 1- They fired their auditor (Ernst and Young) and are replacing them with Deloitte. Will this impact the length of time that it takes for the audit to get done? I assume yes. So it seems to me that this move will delay Avid's ability to file audited financial statements. 2- Avid paid $4,069k in audit fees for YE2011. Audit fees represent 1.6% of Avid's current $322M market cap. Autodesk and Adobe paid similar audit fees, but their market caps are >34X Avid's. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted January 8, 2014 Share Posted January 8, 2014 Software -- stress testing I was thinking about this the other day. Every company you buy that relies on rolling short-term debt -- it will eventually fail to be able to do so under a stressed environment. Same goes for a software program that relies on a system resource allocation without a backup plan to fail gracefully. Then there are multiple paths (an execution tree) that run through the code. We had software that would point out bugs in samples of such paths (it would simulate the execution via static analysis) -- this is a bit like the way you think about your investments when you are trying to grasp an estimate of that one true IV. You effectively execute a static analysis of a sampling of possible execution paths. You often at that point walk away if it's "too hard". You need more stable, predictable, boring businesses with long histories to more effectively utilize these static analyses. The more paths you can analyze statically (as a percentage of all possible paths), the more confident you can be that you'll have solid execution (as you can't test all possible paths in highly complex systems). Thus, the method works best when you can reduce the complexity (Buffett style businesses). Somewhat similar types of work. Link to comment Share on other sites More sharing options...
gokou3 Posted January 8, 2014 Share Posted January 8, 2014 Structural engineer -- thinking about margin of safety all day long! ;) Link to comment Share on other sites More sharing options...
frommi Posted January 8, 2014 Share Posted January 8, 2014 3 years electrical engineer and then software coding&design for 16 years. I own a small software company since then together with a colleague and work as a freelancer. Studied 4-5 years technical analysis with minor success, i was once a daytrader. (And lost a lot of money) Link to comment Share on other sites More sharing options...
tyska Posted January 8, 2014 Share Posted January 8, 2014 Wow lots of engineers, and here I farm with no degree. But I do have a son in 2nd year engineering so I can fit in a little. ;D Link to comment Share on other sites More sharing options...
enoch01 Posted January 8, 2014 Share Posted January 8, 2014 Structural engineer -- thinking about margin of safety all day long! ;) Me too. Autodesk has a moat, but I expect it to shrink. For example, Trimble has been making lots of acquisitions recently (Tekla, CSC, Sketchup) in an attempt to have a complete analysis, design, and documentation suite that can all talk with one another. The Rhino / Grasshopper community is also developing interesting products. Link to comment Share on other sites More sharing options...
goldfinger Posted January 8, 2014 Share Posted January 8, 2014 Trained as a generalist engineer and software engineer. Been in the tech business (silicon valley and before Paris) as manager, developer and architect for more than 15 years. Link to comment Share on other sites More sharing options...
SharperDingaan Posted January 8, 2014 Share Posted January 8, 2014 O/G Engineering, Manufacturing, Fin Services, Government (MOF), Academia, & Brewing ;) Always close to the money, operational, & governance focused. SD Link to comment Share on other sites More sharing options...
HJ Posted January 8, 2014 Share Posted January 8, 2014 Structured Finance / Securitization 17 years Link to comment Share on other sites More sharing options...
cubsfan Posted January 8, 2014 Share Posted January 8, 2014 Enterprise Software Sales & Sales Management - 28 yrs Link to comment Share on other sites More sharing options...
jouni1 Posted January 8, 2014 Share Posted January 8, 2014 where's the working class? ::) no degree here. i'm an electrician, i like to think i understand the construction business, electricity and power grids. Link to comment Share on other sites More sharing options...
goldfinger Posted January 8, 2014 Share Posted January 8, 2014 where's the working class? ::) no degree here. I work hard! ;D Link to comment Share on other sites More sharing options...
benhacker Posted January 8, 2014 Share Posted January 8, 2014 BS in EE, Minor in Business. 10 years as EE in communications / networking products. Started my RIA business a little over 6 years ago. Given that I've always seen basically 80%+ in either engr or finance backgrounds (this is true of other investment boards i've been on over many years too), I have always wondered if engineering minds are more attracted to investing because of their brains (problem solving, good with numbers, etc) or the mere fact that for most people investing isn't as interesting because they don't make a ton of money (the assumption being that engineers are well paid)? I think it's a combination of the former, with the filter of engineering people being more comfortable with forums / computers / message boards in general, but I'd be curious to hear others' thoughts. I went into engineering not because so much it was what I wanted to do, but mostly because my family kind of turned me away from my business / finance passion and it took me a while to find my way, so I'm not sure I'm a typical engineer on this board (if there is such a thing as typical). Side note, this is always why tech threads suck the most on investing boards, because half the folks talking don't have any humility because they are literally already experts (or think they are) in the topic at hand. When everything thinks they are right, a discussion board is more like a urinal. Just some idle musings... Ben Link to comment Share on other sites More sharing options...
goldfinger Posted January 9, 2014 Share Posted January 9, 2014 Side note, this is always why tech threads suck the most on investing boards, because half the folks talking don't have any humility because they are literally already experts (or think they are) in the topic at hand. When everything thinks they are right, a discussion board is more like a urinal. You hit it on the head! Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 9, 2014 Share Posted January 9, 2014 So many white-collar professionals here. I thought we have a bunch of students/ppl just starting here. Link to comment Share on other sites More sharing options...
west Posted January 9, 2014 Share Posted January 9, 2014 Given that I've always seen basically 80%+ in either engr or finance backgrounds (this is true of other investment boards i've been on over many years too), I have always wondered if engineering minds are more attracted to investing because of their brains (problem solving, good with numbers, etc) or the mere fact that for most people investing isn't as interesting because they don't make a ton of money (the assumption being that engineers are well paid)? For me personally (an engineer, as mentioned) I like both investing and engineering because there's the puzzle of how things work. Whether you're looking at a business or, say, a bike, they both behave certain ways for certain reasons. Once you understand those reasons, you know how the system works as a whole. Part of the reason why I'm more drawn to investing than engineering these days is because, sticking with the bike example, once you know how a bike works, you know how a bike works. There's not *too* much more you can learn about it. (Note: There *is* always something to learn, if you really, really want to try. It's just a question of how useful that knowledge is actually going to be.) With investing, it seems like it's a never ending rabbit hole, as far as learning how stuff works goes. And, if you do it right, *all* of the knowledge you accumulate is useful. As far as this board having a lot of engineers on it, I think part of that might come from the population it's selected from: The Internet. Link to comment Share on other sites More sharing options...
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