When I tell people that all my money is invested in just one stock, they usually say something like, 'whoa, that's too risky for me'. And, it pretty much goes against every tenet of the generally accepted wisdom to concentrate years and years worth of savings in one unprofitable (as yet) technology company.
But for me, I see the whole issue of risk from the opposite angle. My idea of exposure to risk is not owning enough MVIS by the time it fulfills its promise to investors.
I see a convergence of forces in business and technology in the near term:
the emergence of pervasive high-speed wireless
hundreds of millions of cell phones sold annually
mobile, cell phone delivered TV
location-based, context-aware software
the proliferation of RFID technology
the unstoppable juggernaut of faster and smaller CPU chips
and the following basic principles are always on my mind:
change is constant but the rate of change is accelerating
those who can divine what the future holds will make a lot of money
(I talk a little bit more about some of these types of ideas in a post I wrote about a month ago: 'Roll The Bones'. )
I decided several years back that the area I wanted to invest in was new display technology. This was because for some reason I started looking around at the world with the point of view that it was already archaic and outmoded. Like I had gone back in a time machine to reach the present. Seeing the bulky cathode ray tubes and unimpressive LCD screens everywhere led me to think that something new, something better had to be in the works to come along and render them both obsolete.
When you consider that 'information wants to follow the path of human activity', and see the millions of people with their cell phones and their tiny LCDs, it's easy to imagine that the cellular service providers, handset makers, and the cell phone crazy consumer public would go nuts for a cell phone that could provide a totally personal, large-screen, high-resolution viewing experience -- without compromising the phone's form factor or ergonomics. And this is of course but one of the many applications that the company is pursuing.
So, I can live with the pretty dramatic ups and downs of a concentrated position. I try not to think too much about what the value of my position is on a day to day basis. I instead focus on what portion of the company's future cash flow belongs to me. What percentage of the outstanding shares belong to me? Is the company executing on their plans to commercialize their technology? Could I really own more of this company than Morgan Stanley, Bear Stearns, Bank of America and Merrill Lynch?
I've been doing this blog since April and have put in a pretty significant amount of research well before then. Every sign along the road that I can see points to the company's ultimate success. There will be some challenges along the way, and there have been and will be some days when I think 'jeez, why can't I just buy an index fund like a normal person'. Maybe I've drunk the Kool-Aid and have lost my marbles. But I really don't think so.
The possibility of loss is the usual definition of risk -- and I don't really think there's any investment that can offer total insulation from risk. Returning less than the market averages is a loss, too. So, decisions have to be made. Questions have to be asked. How can I invest my money to earn the maximum possible return over my lifetime? Perceived 'safety' is an illusion. There is only risk. And the risk of not owning my share of the money generated by Microvision's technology is one I'm not willing to take.
But for me, I see the whole issue of risk from the opposite angle. My idea of exposure to risk is not owning enough MVIS by the time it fulfills its promise to investors.
I see a convergence of forces in business and technology in the near term:
the emergence of pervasive high-speed wireless
hundreds of millions of cell phones sold annually
mobile, cell phone delivered TV
location-based, context-aware software
the proliferation of RFID technology
the unstoppable juggernaut of faster and smaller CPU chips
and the following basic principles are always on my mind:
change is constant but the rate of change is accelerating
those who can divine what the future holds will make a lot of money
(I talk a little bit more about some of these types of ideas in a post I wrote about a month ago: 'Roll The Bones'. )
I decided several years back that the area I wanted to invest in was new display technology. This was because for some reason I started looking around at the world with the point of view that it was already archaic and outmoded. Like I had gone back in a time machine to reach the present. Seeing the bulky cathode ray tubes and unimpressive LCD screens everywhere led me to think that something new, something better had to be in the works to come along and render them both obsolete.
When you consider that 'information wants to follow the path of human activity', and see the millions of people with their cell phones and their tiny LCDs, it's easy to imagine that the cellular service providers, handset makers, and the cell phone crazy consumer public would go nuts for a cell phone that could provide a totally personal, large-screen, high-resolution viewing experience -- without compromising the phone's form factor or ergonomics. And this is of course but one of the many applications that the company is pursuing.
So, I can live with the pretty dramatic ups and downs of a concentrated position. I try not to think too much about what the value of my position is on a day to day basis. I instead focus on what portion of the company's future cash flow belongs to me. What percentage of the outstanding shares belong to me? Is the company executing on their plans to commercialize their technology? Could I really own more of this company than Morgan Stanley, Bear Stearns, Bank of America and Merrill Lynch?
I've been doing this blog since April and have put in a pretty significant amount of research well before then. Every sign along the road that I can see points to the company's ultimate success. There will be some challenges along the way, and there have been and will be some days when I think 'jeez, why can't I just buy an index fund like a normal person'. Maybe I've drunk the Kool-Aid and have lost my marbles. But I really don't think so.
The possibility of loss is the usual definition of risk -- and I don't really think there's any investment that can offer total insulation from risk. Returning less than the market averages is a loss, too. So, decisions have to be made. Questions have to be asked. How can I invest my money to earn the maximum possible return over my lifetime? Perceived 'safety' is an illusion. There is only risk. And the risk of not owning my share of the money generated by Microvision's technology is one I'm not willing to take.
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