A colleague recently asked if I knew why semiconductor stocks significantly underperformed the market over the past five years, even though chip sales have seen double-digit growth during the same period. Being a veteran of the industry, I surprised both of us by not knowing the answer. So I decided to find out.
First, the facts. The PHLX semiconductor sector index (SOX) declined at a rate of 2.9 percent per year over the past five years, while Merrill Lynch's semiconductor index exchange-traded fund (SMH) declined 1.0 percent per year.
The Nasdaq, on the other hand, experienced a 4.8 percent compound annual growth rate (CAGR) during the same period. Likewise, the Dow and S&P 500 respectively grew 3.7 percent and 3.9 percent annually.
Indeed, the semiconductor sector has significantly underperformed the broad market.
... Read more
(Credit:
Qualcomm Inc.)
Intellectual property (IP) companies are unique business entities. Theirs is a complex, controversial world characterized by huge capital investments, epic legal battles, rollercoaster stock rides, fanatical investors, and of course, lots of patents.
Why should you care? Because, their technology helps almost all your gadgets work the way they do. And for that privilege, their executives, employees and investors go through hell. ... Read more
How do we value technology companies? Ingenuity and invention, quality of service, brand loyalty, manufacturing muscle, operating efficiency, supply-chain management, price, great place to work. There are lots of metrics.
For those unfamiliar with the wily ways of Wall Street, the stock market has its own way of expressing what it thinks of companies. It's called market capitalization or market cap for short. ... Read more
The proposed Patent Reform Act of 2007 will be coming up for a vote in the Senate in a few months. A similar version of the bill has already passed in the House.
The bill has certain relatively benign provisions, but let's ignore them since they just cloud the argument and are of little interest to either side in the debate.
United States Senate
Let's instead just cut to the chase. In lay terms, the bill makes it easier to challenge issued patents and harder for patent holders to obtain compensation through the U.S. legal system.
Regardless of how that sounds to you, make no mistake - this debate is between two opposing sides with their own interests at heart. ... Read more
Have you ever, I mean ever, copied software, a CD, a DVD, or a video tape without permission or paying? How about downloading music, video, pictures, or art?
If you answered yes, congratulations, you're just like everybody else.
On the other hand, you probably also think U.S. screenwriters are being screwed by the studios. And that China and other countries shouldn't be illegally copying and selling material copyrighted in the U.S.
That, my friend, is called a double standard.
Something else to consider:
Did you read this post about Trend Micro suing Barracuda Networks for patent infringement. Do you agree with the blogger? Do you think companies like Qualcomm, Rambus, or Trend Micro are patent trolls that unjustly enrich their shareholders at the expense of consumers? ... Read more
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