RFID a great growth market

A new revolutionary technology is forming called RFID or Radio Frequency Identification. This technology greatly improved the ability to track items, any item. The current leading market solution uses a one way system where, for example, a simple “bar code” at your local grocery store where the grocery clerk has to run the bar code over a scanner. These readings are very man-hour intensive as each individual item must be scanned RFID is a two way system where a reader could scan every item at a Wal-Mart (WMT-48.14) store. Then each item with a RFID tag would respond or “chirp” back to the reader. Using the two way RFID system a single person could take complete inventory of a store almost eliminating all the man-hours of manual inventory. A reader mounted on a fork lift truck would track each item the hyster moves into the warehouse. The RFID will allow a single person the ability to inventory unlimited amounts of items.

Using our simple forecasting theorem which mathematically helps us forecasts how successful technologies will be; our approach signaled that RFID will be revolutionary.

Please refer to forecasting a revolution Multiplication of Moore’s law http://www.durig.com/duriglaw.html .

Here are some of the many uses of RFID. Tracking gamblers at a black jack table so the house knows who’s betting big, tracking prisoners in a jail to see who was involved in a scuffle, tracking prescription drugs for counterfeit, tracking cattle for mad cow disease, tracking cars so police could immediately identify a stolen car or a car with outstanding issues. More examples, tracking passports to see if the picture is correct, tracking products for Wal-Mart to almost any store and warehouse, tracking the Department of Defense inventories for most items, Boeing can track parts for building aircrafts and Ford tracking parts for it automobiles. It appears that both the scope and magnitude at this time is limitless.

Industries tracking consumer goods from shoes to cement blocks to frozen food to cars, including boats, planes, parts and supplies can utilize it in all aspects from manufacturing, inventory and shipping to retail outlets.

Judging from our theorems, RFID will see revolutionary growth to the likes of the cell phone, Personal Computer and the Internet that also at the beginning of their cycles scored extremely high.

IdtechEx forecast

From IdtechEx, the market for RFID is to grow from 2.7 billion in 2006 to 12.3 billion in 2010. The value is expected to be about 26.2 billion in 2016 or ten years to grow almost 10 times.

Selecting the company that could lead that market

Identify the correct market to invest is only part of the challenge. Possibly the bigger challenge is to identify the company that will lead this technology. This is where we have identified Intermec. Intermec is one of the leading companies in bar codes. Over the last few years Intermec has been focused on developing products that would comply with the new Gen 2 RFID standard rather than introduce products that supported the older Gen 1 Class and 0 Class protocols. This strategy has allowed Intermec to utilize its roughly 149 patents to allow Intermec to extract royalties from the entire RFID industry and appear to be essential when utilizing the Gen 2 RFID standard. The Gen 2 RFID standard and Intemec’s patents are very co-depended of each other. In my opinion Intermec is gaining an integration monopolistic position.

Why monopolies have great success

Past monopolies have had great success from controlling the market like Intermec integrating their solution into and then helped become part of the standard. Compared to war it is the equivalent of having the high ground in battles – this approach is extremely valuable. Control in new revolutionary technologies is very rare. Our studies shows that in the past when companies achieved control they are usually able to hold it for 1-2 business cycles or from 9 -19 years. Some past successes that have demonstrated integration and or control of revolutionary products were Microsoft (MSFT-27.13) and Intel (INTC-19.78) in the Personal Computer, Cisco (CSCO-21.44) for the Internet and Qualcomm (QCOM-49.87) currently for Cell Phones. When I was young child IBM (IBM-84.32) controlled the standard for Mainframe and AT&T (T-26.81) the phone business. You can often see companies that are monopolistic in a revolutionary industry have a probability of achieving super wealth. Several monopolies we listed achieved the world’s largest stock value.

Is Intermec a new monopoly?

Intermec or any company for that matter to have a chance to be great monopoly it must have a degree of control. The question is how much control does Intermec have over the RFID industry?

To answer this simple but very important question we devised an extremely effective test. Intermec claim’s to be an integral part of the Gen 2 standard. The definition of de facto standard is recognized by all its peers as the standard.

Does the RFID industry recognize Intermec as the standard?

Companies like Symbol Technology (SBL-10.64), Zebra Technology (ZBRA-45.45), Philips Electronics (PHG-32.38), Texas Instrument (TXN-30.59) are some of the leading companies in RFID space that also have the size, technical background, law staff and other resources to verify or reject Intermec’s claim. Accepting Intermec’s claim means paying royalties to Intermec for years, you must understand if possible all theses companies would NOT want to pay royalties so their preferences is to reject Intermec’s claim.

All the companies mentioned above and more have agreed that Intermec will receive royalties on every Gen 2 RFID product they make. No one wants to pay 2.5-7% royalty to Intermec to utilize the Gen 2 RFID standards. Especially leaders in RFID like Phillips, Texas Instrument and Symbol which all have a major leading position in the market, and their agreements with Intermec greatly validated Intermec’s claims.

It was when the largest company and Intermec’s closest competitor, Symbol Technologies, that created the biggest challenge to Intermec’s claims. Symbol Technologies not only refused to pay early in the process, but sued Intermec asking for Intermec to pay Symbol royalties for their many patents and Symbol wanted their own version of the standard.

Symbol gave up their court fight and agrees to join Intermec’s Rapid Start Licensing program. When your biggest competitor allows you to sign a controlling contract where Symbol has to pay royalties to Intermec every time Symbol sells a RFID hardware product. To me the Intermec/Symbol relationship Intermec has provided validation with a very high degree of control.

Many experts assign a similar agreement to the rise of Microsoft and the downfall of IBM when IBM accepted the Microsoft PC standard. I believe history will say the same thing when Nokia (NOK-20.52) then the largest cell phone company in the world signed and agreed to pay royalties to Qualcomm on all Nokia 3G phones.

It reminds me of a very old saying “the king is dead, long live the king” if you can dictate your will to the powerful companies your have a high degree of control.

Gutter vs. Shingles

Intermec is using their RFID control to establish what I call a gutter business. In Oregon it rains a lot and what we know are roofs. Water from shingles flow into a gutter. In some cases the gutter and shingles are co-dependent and need each other for the roof to work properly. First gutters have tremendous leverage. Second you could measure the number of shingles or measure the square footage of the roof to understand the amount of possible water flow or leverage the gutter might achieve We believe gutter based companies are far better companies to own. If you wanted fill a cup of water would you put your cup under a shingle or a gutter? It’s my believe that by far most companies are shingles business models, but the gutter business model have far great potential to grow profits utilizing and leveraging the shingles.

In a few situations all the shingles combined could flow into a single gutter. A roof with a single gutter or a monopoly has one of the best business models and has a chance to leverage the entire industry to enrich its profits.

Intermec is possibly building this type of business model and has awarded the premier client of Cisco, and IBM while having alliances with Microsoft, Oracle and SAP. Companies that joined Intermec’s Rapid Start Program and agreed to pay Intermec a royalty on every RFID hardware product they sell.

· Accu-Sort

· Avery Dennison

· AWID

· Datamax

· EM Micro

· Feig Electronics

· Hand Held Products

· LXE

· Metrologic

· Paxar

· PSC

· Psion Teklogix

· SAMSys

· Sato

· Symbol Technologies

· Texas Instruments

· ThingMagic

· Toppan Printing

· Zebra Technologies

All of these agreement occurred in 2005 after the new Gen 2 standards for RFID established in early 2005.

If we are right Intermec should have outstanding and accelerated growth for the duration of the Gen 2 RFID standard business cycle possible Gen 2 Standard last about 9 years based on many business cycles we followed.

Risk

Intermec’s placement and degree of control in the Gen 3 RFID standard is very unclear, and will take many years from now to achieve any clarity.

A company could challenge Intermec’s legal position. Even though Intermec has about 149 patents in the RFID industry the largest IP portfolio, a single company could sue making Intermec’s patent unenforceable. Knowing that Symbol Technologies is well funded and a leader in the RFID industry and has attempted this and failed, it makes the hurdle even higher for a smaller less funded company to attempt this knowing that it would be a very costly approach.

Intermec appears to limit the companies that license their technology especially during their Rapid Start Program. If in future years Intermec is found to be a monopolistic company this could be very damaging in a court system. Intermec should give every company an equal chance.

RFIG Gen 2 is still not Intermec’s core profit center and there are no guarantees that RFID will become revolutionary. Most all new technologies have gone through long incubation cycles before becoming mainstream which RFID Gen 2 will probably incur.

In my opinion the great appreciation will come when the royalties are the main profit center, and that may be many years if it ever occurs.

Conclusion

To summarize

1. The RFID appears to approaching a revolution growth cycle.

2. Intermec is the technology patent leader and has degrees of control over the Gen 2 RFID Standard.

3. Intermec is forming a gutter business model combined with a possible monopoly position giving Intermec the ability to have possible leverage over the entire RFID industry

If Intermec could achieve the three items above it has a chance to achieve

a: Modern Monopoly Effect.

A Modern Monopoly Effect is when a single monopolistic company achieves a stock market value roughly equal to all the companies’ market value that supports the standard. In Intermec’s case Intermec could achieve stock market values about equal to all RFID hardware partners businesses that supports Intermec Gen 2 Standard for RFID.

The water from all the shingles on a roof could roughly equals the water flowing into a gutter, a single monopolistic gutter named Intermec.

If Intermec becomes a Modern Monopoly Effect possibly it will become the fifth time we have identified and owned a Modern Monopoly Effect.

For future information about Monopoly investing please visit http://www.manage-money.us, For investment news, articles and forum go to http://www.durig.com,& http://www.investment-investment.us

Successful traders learn to follow a set of rules consistently. These set of rules are called a trading system. When using stock options, it is very important to use a stock option trading system. Traders really need to backtest several stock option trading systems and avoid commonly taught systems that result in a net loss over time. A ‘fun’ stock option trading system involves high flying stocks Google, CME, or RTP. I call this a ‘fun’ system because you should only trade with money you can lose. In this system, you should really trade no more than three contracts. The system is for illustration purposes. Remember - options involves risks - including losing your whole account if you do not manage your risk and size you positions properly.

The leverage of stock options can cut both ways. You can lose faster as well as win faster with stock options. Therefore, you want to get past the point of trading because of emotions or addiction and trade by your rules. Of course, your stock option trading system needs to be backtested with lots of samples to ensure you have positive expectancy.

Positive expectancy means that when you trade many times over the long run, you will have a net profit. You will be surprised that some stock option trading systems being taught or sold may have a NEGATIVE expectancy in the long run. That is, you will be trading at a net loss. They may have worked in a strong trending market a few years ago but they do not work in our current 2005-2006 stock market.

One way to see explosive results is to focus on stocks that are expensive and that have a high intra-day range – or average true range. Google, CME, and RTP are in the $200 to $500 range. In fact, there are not many other stocks over $200 that have options besides those three. Normally, options two strikes out of the money are relatively expensive for these stocks – except during the expiration week. Remember, options basically trade on the stock price difference, whereas stocks trade on the total stock value. A $200 stock with a 5% intra-day range has a ‘difference’ value of $10. That $10, in absolute terms, can cause some wild swings in option prices during a certain time of the month.

Let’s look at a stock option trading system that tries to take advantage of expensive stocks fluctuating during the time of the month when options are the cheapest:

1. On the Monday before option expiration, buy three strangles on Google, CME, or RTP that are 2 strikes out of the money for that expiration. For example, on Monday, May 15th, with expiration Friday on May 19th, Google is at 400. Buy the 420 call and the 380 put. If it is not earnings month, the strangle should cost around $300 to $350.

2. You’ll have to watch the price quote most of the day for Tuesday, Wednesday, Thursday, and even Friday

3. Try to estimate based on chart patterns whether a certain time is close to the high or low for the day. Better than that, if the price of the total strangle is profitable by $60 or more per strangle, sell one. That’s a 20% profit. The normal intra-day range for these three stocks swings enough to cause some profit.

4. Repeat step 3 on Wednesday and Thursday. Many times a year, there is a news event that can cause a $10 to $30 move on a single day. These are the home runs you are looking for that can more than cancel the strike outs of the relatively inactive days.

This stock option trading system has precise definitions for entry and relatively precise definitions for exit. Trade like a robot one week a month. In future articles the detailed backtesting results of this system may be presented.

Steve Burke http://www.breakthroughbacktesting.com

Steve Burke is president of Perazzim Capital Management, Inc.
Perazzim Capital Management strives to give you the confidence to trade stock option trading systems that have a high probability of profit based on backtesting with lots of samples. An e-Book is available that describes how to use backtesting results for three common stock options trading systems to trade profitably & remove fear.

On Friday, flash media maker Lexar Media (LEXR) received a higher revised takeover bid from Micron Technology (MU). The revised bid places the all-stock exchange offer at around $10 a share, up marginally from the initial bid.

But major shareholders including billionaire investor Carl Icahn along with hedge funds and portfolio managers have deemed the initial bid to be inappropriate. Elliott Associates believes the initial bid "significantly undervalues Lexar," and feels Lexar is worth between $1.5 billion and $2.4 billion. The estimate is well above the revised takeover bid of about $827 million.

I must concur and say the revised takeover bid is way too low and needs to be rejected by shareholders. Micron wants to pay around 1.10x sales for Lexar while the market leader SanDisk (SNDK) is trading at 4.35x sales. Lexar also has a $400 million patent infringement lawsuit against Toshiba that it had previously won but is now subject to an appeal by Toshiba.

Think about it this way, a successful $400 million settlement in favor of Lexar would equate to around $4.83 per share in additional cash to add to the current $0.54 in free cash after debt that Lexar has. This means Micron would pay less than $5 a share for Lexar’s assets, which is low.

There is also speculation that SanDisk is seriously thinking about taking a run at acquiring Lexar. This would make sense since SanDisk would solidify its leadership position.

Moreover, SanDisk has a close working relationship with Toshiba, which could see SanDisk drop or reduce the settlement if it managed to acquire Lexar.

Stay tune. A special shareholder meeting to review the takeover bid has been moved to June 16. In my view, the $10 bid undervalues Lexar. Question is will a white knight surface?

George Leong is the founder of Investornomics.com (http://www.investornomics.com) - a provider of independent stock and option trading commentary. He has a degree in finance/economics and offers over 15 years of research experience in investing and trading.

Under Armour, Inc. (UAI) debuted on November 18, 2005 at $31. The maker of branded performance clothing is growing its brand recognition via the use of hip brand promotion that is trying to wrestle away interest from the traditional buyers of Nike (NKE).

Under Armour has targeted the youth and athletic market where it competing with the established and strong Nike brand. Under Armour has a projected five-year annual earnings growth of 22.50% versus 14% for Nike. But on the valuation side, Under Armour is discounting in significant premium growth over that of Nike. Under Armour is trading at 46.19x its FY07 and a PEG of 2.75 versus 14.27x and a PEG of 1.06 for Nike. Clearly, Under Armour will need to perform to its lofty expectations going forward; otherwise, the stock will sell off. Nike is a superior value play.

Vonage Holdings Corp. (NYSE/VG) debuted on Wednesday at $17, the mid-point of its estimated IPO pricing range of $16-$18. The provider of Voice over Internet Protocol (VoIP) is an early entrant into the rapidly growing area of VoIP and presently has about 1.6 million subscribers but the company has yet to turn a profit. VoIP uses a broadband connection to make phone calls.

High advertising costs to acquire customers have hindered margins. Vonage is the current leader due to its early entry into the VoIP business but I see the company facing a difficult uphill climb as intense competition surfaces from major cable companies and the Skype service from eBay (EBAY).

The reality is Vonage has to spend extraordinary money on acquiring customers whereas for cable companies and eBay, there is already a significant customer base to market to. Vonage will soon realize this.

Hedge fund manager and the host of the hugely popular ‘Mad Money’ show on CNBC said Vonage is a “piece of junk,” which I have to concur with. And with Vonage currently trading down at $13, the market may also view Vonage as over hype and not enough substance.

George Leong is the founder of Investornomics.com (http://www.investornomics.com) - a provider of independent stock and option trading commentary. He has a degree in finance/economics and offers over 15 years of research experience in investing and trading.

It has been over four years since Arthur Anderson was indicted for destroying Enron-related documents in order to deter investigators. Anderson’s indictment on March 14th, 2003 set off a string of events that would forever change the face of corporate America. Once Anderson was convicted on June 15th, 2002, the indictments and convictions in the Enron case quickly grew. Between October 2002 and April 2003, seven individuals were indicted for various crimes relating to the Enron scandal, including Andrew Fastow, Ben Glisan and Dan Boyle. On January 14th, 2004, Andrew Fastow plead guilty to two counts of conspiracy in exchange for no more than ten years in prison. On July 9th, Kenneth Lay surrendered to the FBI and was indicted on accusations of being a participant in a conspiracy to manipulate Enron’s quarterly financial results, making public statements about the company’s financial performance that were false and misleading and omitting facts that were necessary to make financial statements fair and accurate. Although Lay surrendered to the FBI, he maintained his innocence on all counts.

On October 19th, a federal judge granted Lay a separate trial from Skilling and Causey on the charges of bank fraud and deceiving banks about using loans to buy Enron stock on margin. However, the judge ruled that the they would be tried together on the other charges. Before the trio could be tried together, Richard Causey plead guilty to securities fraud three days after Christmas in 2005. Causey entered a plea deal which called for a reduced prison sentence of five years in exchange for full government cooperation and forfeiture of over million dollars. If Causey had not entered the plea bargain, he could have faced ten years in prison.

The much awaited trial of Kenneth Lay and Jeffery Skilling began on January 30th, 2006 in Houston, Texas. During the trial, the defense argued that there was never any wrong committed, but that the collapse of Enron was caused by a failure of market confidence. The defense also stated that thirteen of the sixteen Enron executive who pleaded guilty to crimes were actually innocent, but confessed because of the pressure exerted by federal prosecutors. On the other side of the spectrum, the prosecution argued that Enron’s leaders lied to investors and Wall Street about the true state of their financial affairs. During the course of the trial, eight former Enron executives testified against the Lay and Skilling, including the prosecution’s star witness Andrew Fastow. After almost a four month trial, the jury reached a verdict on May 25, 2006.

The jury found Jeffery Skilling guilty on nineteen of the twenty-eight counts of securities fraud and wire fraud, while acquitting him of an additional nine counts. Kenneth Lay was found guilty on all six counts of securities and wire fraud. Lay was also found guilty on four counts of fraud and false statements in a separate bench trial which began on May 18th. Skilling and Lay will be sentenced during the week of September 11th, 2006. Skilling faces up to one hundred and eighty-five years in prison, while Lay faces a total prison sentence of forty-five years.

More articles like these can be found at http://www.gotalkmoney.com

Discuss money, bank deals, and more at http://www.gotalkmoney.com

NASDAQ: SFUN 26.88

Do you think the market for smart phones, digital audio (MP3) players, consumer solid state drives (SSDs), portable media players, digital video cameras, GPS devices, multimedia and music handsets, memory cards and USB flash drives are growing? All these products provided a disruptive position taking away market share from their predecessors.

One market segment that could see even stronger growth than these separate products we mentioned, and include other growth products, is the flash memory market. Flash is a root component used in all the above products and more.

Based on history we are forecasting that flash is the memory medium of choice for a plethora of devices in the consumer electronics in wireless devices and that flash will grow faster than the wireless devise market. It appears that in the past, memory for computing devices has grown faster than the device that utilizes the memory. Memory of the Personal Computer (PC) and the Internet has grown faster than their supporting platform. With the PC creating tremendous growth and history as our guide the demand for both memory and disc drives for the personal computer was often the impetus of many upgrade cycles. The Internet with the many millions of new web pages created a tremendous growth in storage. I’ve seen in many reports that forecasted storage of the internet has been one of the fastest growing subsets of the internet as a whole.

With a decrease in price per gigabyte (GB) of more than 80 percent over the past three years and with the high growth in wireless data the need for new and addition memory could exceed the growth of the hardware device market that uses flash for its memory. The current market in flash memory is about $25 billion annually and its forecast is about 40 billion by 2010.

With each new product cycle the advantages of flash have become more disruptive allowing it to become about 30-40% cheaper every year. Many experts are forecasting this disruptive curve to replace the disc drive market for PC’s. Flash has already replaced hard drives in most MP3 players.

Currently the flash memory is designed to support two types of flash memory. One type of memory supports your machines internal usage or operating system, the other type is for more external storage needs. The internal memory often uses the architecture of NOR, which has been established for years and Intel (NASDAQ:INTC) considered by many as the market leader. The NOR technology is a more complex technology and is starting to see the market mature.

Often you will find both NOR and NAND in the same mobile device.

The much faster growing market is for external memory market needs or NAND and the one of the leaders is SanDisk. SanDisk Corp. (NASDAQ: SNDK), founded and managed by president and CEO Dr. Eli Harari. SanDisk and Toshiba jointly launched the multi-level cell (MLC). This technology made it possible to divide the cell and store two bits of data on the same piece of silicon (x2, as it were), which significantly improved the profitability of manufacturers and fabs, basically doubling the price performance curve.

This process has become the leader and allowed NAND MLC to become disruptive to the predecessor NOR architecture and in 18 months penetration has been so great that MLC is becoming dominate force in flash.

We believe that this new curve of double captivity on a single cell technology will become the single most important factor for next generation flash memory, and it will become essential as flash is staring to see possible limits in the reduction of its die size as many experts are starting their forecasting. If flash is going to continue on its curve of lowering the price of a gigabyte by 80% over the next three years, it is my opinion they will need an architecture that’s designed specifically to establish this goal. There is a proprietary NROM architecture that has many advantages toward increasing capacity of bits per cell. The NROM is close to production of 4 bits of memory in each cell or quad flash.

The company we believe has a unique position and leads the NROM approach in the flash memory market is an Israeli based company called Saifun (NASDAQ:SFUN).

Saifun is an intellectual properties company which its revenues come in three forms: licenses, royalties and support. This type of model has been very successes for our model portfolios in the past. The three previous companies that had core business from intellectual property we investment into our portfolio’s were Qualcomm (NASDAQ:QCOM) in1997 at 3.31 per share and still holds a position. Arm Holdings (NASDAQ:ARMHY) in 9/29/1999 @ 9.60 and holds half a position and Rambus (NASDAQ:RMBS) in 1998 which appreciated about 350% in 2000 and we sold the position in the model portfolio when Intel stopped supporting the Rambus architecture late and 2000 and in 2001.

Even though it is very early is Saifun publicly traded history we are excited by its new form of flash memory architecture, it appears that Saifun’s approach has many advantages over the more established NAND and especially NOR. The single most important part is their technology curve. They have the ability to double the bits per cell allowing for a second compounding curve. The other architecture they are working hard on is to shrink their size and increase density, but we believe that Saifun with its simpler model should achieve a smaller die than the others but the real advantages with Saifun is the ability to allow 4 bits of memory in every piece of silicon (x4). Doubling again the events of MLC while at the same time reducing their size thus possibly leading the new flash architecture. Another advantage is NROM’s ability to work both as an operating system and memory component being able to supply both markets that individually NOR and/or NAND has target.

A second company has just announced that in 2007 they will start producing a 4 bit cell in NAND. The company making this announcement is M-Systems (NASDAQ: FLSH). They claim they will have a product on the market some time in 2007. Even though they have achieved this tremendous breakthrough we believe that because they use the whole cell instead of a fraction of the cell for this doubling process, the whole cell’s ability to double again may become geometrically tougher. On the last review M-Systems has not explained their business model to (make at own fabs or licenses) and delayed the secondary offering.

It is has been our opinion that companies that form successful royalty models resemble gutters and the fab companies have the appearance like shingles when looking at a roof. When it rains the gutter can create a stronger stream receiving income and achieve a much higher level of profitability. The delay of M-Systems secondary offing might reduce the chance of more fab developments.

Either way this looks like a marathon race and since this is such a very large market it will be about a $40 billion market when quad flash is widely available, that means that any of the top three or four should benefit.

Saifun already competes extremely well with NOR but early 2007 when it doubles the number of bits from 2 bits to 4 per cell it should be able to show advantages over MCL NAND currently the price performance leader. Saifun has a chance of repeating the same step that, in our opinion, allowed SanDisk to lead the last cycle.

There are many new technologies looking to replace flash but at this point there are a few that are close to achieving mainstream volumes. You should know the Saifun technology hibernated for about twenty years. This is very common, the Internet incubated for about 30 years and electricity for 100 years. New technologies often hibernate longer than people anticipate, and then it seems that they often almost explode onto the seen very quickly.

Even though Saifun’s approach is about 20 years old, the technology they have just started to achieve is commercial feasibility.

The true advantage is since they only use points in the cell versus in the more convention approach such as NOR or NAND that uses the whole cell. This simpler usage allows for higher data retention and also provides a faster response time, and hopefully more density, and less power.

This is a tremendous advantage having 4 times the bits in competitive cells. Saifun also believe future that future cells could expand to possible to 8 or even 16 bits per silicon.

Possible risk

Saifun only has a handful of clients, if they loose Infineon Technologies (NYSE:IFX) Saifun largest client, they would impact their business tremendously. On a side note, it looks like it will pick up UMC out of Taiwan.

Saifun has basically signed many very large vendors like Sony (NYSE:sne) and Spansion (NASDAQ:SPSN) a spin off Advanced Micro Devices (NYSE:AMD) / Fujitsu (pink sheets) these based solely on the flash market are small in the market, since the production volume is small this could make it harder to be designed into leading volume products.

Even though we believe NROM offers a simpler cell structure with several layers, we believe it will be easy over time to reduce or migrate to a smaller form factor, but this has not been completed in high volume production. If and/or until they can compete in a smaller form factor this company will be, based on unit size, be at a significant disadvantage. Experts believe in 2007 this disadvantage should be at most minimal and Saifun believes in late cycles this will be come a true advantage.

To summarize

1) If Saifun continues to lead the flash market with more bits per cell with NROM flash architecture.

2) If Saifun if achieves the forecasting of smaller die than comparable flash.

If Saifun achieve either of these goals it could become an architecture leader in the flash memory market. If they are able to achieve both they would attain a real architecture leadership position.

According to several of our monopoly theories, available at www.durig.com the stock market value of the companies that lead architecture often grow faster than all the combined companies stock market values that utilize the architecture.

Thus, if Saifun become the dominant architecture with the smallest die size in my opinion it will probably attain the leading stock market value in the flash memory market.

Randy Durig manages the several Portfolios including the Monopoly Technology Portfolio to see the full list go to http://www.durig.com and http://www.money-manager.us

Durig’s Monopoly Blue Chip Portfolio National Performance Rankings: 3rd In the United States, Ranked by 3 year annual return, for Large Capitalization Blend, 4th Quarter 2005, By Money Manager Review.

Randy Durig owns Saifun in discretionary client’s portfolios and in his own account. Past performance is not a guarantee for future returns. All information we believe to be correct but make no guarantee to accuracy.

Randy recommend for open source investment news to read or publishing articles go to http://www.investment-investment.us.

Well the roller coaster seems to have hit bottom and could be testing another low, never the less with a Fed Rate hike today, Paulson Secretary Treasury confirmation, higher oil prices on news of Pennsylvania Oil Refinery flooded and Iranian conflict deadline, it is amazing that the stock market shot up 200 points of its bottom.

Even more stunning is that the re-adjustment period and previous low seemed to have tested twice and repeated. For those who watch the charts and technical analysts, well they believe that it is time to be all in. Interesting as even some of the major fund managers are not all in.

Even more interesting is the wait and see approach and the question of tomorrow being another huge rally during this pre-Forth of July Week Bonanza? So many are saying with regards to the Stock Market; I hope you are back in the game? Is it too soon warn others? Well typically the job of the market seems to be to fool the most amount of people and re-distribute the wealth to the sharks.

Meanwhile we did not see many huge Corporations buying back their own stock as they sit on hoards of cash? What gives, why are these companies not re-investing their capital? Are the Corporations waiting too, wait and see approach? Are they fed up with over regulation, government intervention and uneasy about World Markets prior to a War? Consider all this in 2006.

"Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance in the Online Think Tank and solve the problems of the World; www.WorldThinkTank.net/

While picking exchange-traded funds for you global portfolio, have you ever thought; “maybe I should invest in the companies that develop and sponsor the ETFs?” If so, now is the time to take a stake in Barclays PLC the sponsor iShares which is the largest family of ETFs.

Barclays PLC (BCS) is a huge global financial services firm with 114,000 employees and Barclays Bank is the flagship subsidiary that traces its roots back to the 17th century. It is the second largest bank in the UK servicing 14 million consumers and 600,000 businesses. This is a cash-cow business and the business bank profits have grown more than 20% annually since 2001. The bank is also active in France, Italy, Portugal and Spain as well in Asia and the Middle East.

A related business is Barclaycard which is Europe’s biggest credit card issuer and accounts for about 13% of the groups total profits. Barclaycard issued the first credit card in the UK in 1966. Then there is the dynamic investment banking arm Barclays Capital which accounts for 23% of profits. This group focuses on debt and is getting stronger in Asia and emerging markets.

Now we come to the founder of iShares and second largest money manager in the world, Barclays Global Investors (BGI) that has operations in 47 countries and relationships with 2,500 clients. BGI created the first index strategy in 1971 and the first quantitative index strategy in 1978. Then came the creation of iShares in 2000 which ignited the ETF revolution in investing. I say revolution because iShares ETFs capitalized on and combined three major developments in 20th century investing: the growth in the popularity of common stocks, then mutual funds and finally indexing.

With more than 100 ETFs on the market iShares has garnered the majority of the ETF business and shows no signs of sitting on its lead. BGI now has more than $1.5 trillion under management and contributes 10% to Barclays bottom line while a sister group handling wealth management adds 3%. BGI now offers more than 111 iShares ETFs totaling $207 billion assets under management. In May, 2005, it added ten new subsector ETFs.

Just last week Morningstar raised its target price for Barclays PLC ADR (BCS) to $59, a nice premium to its current share price of $46 price. They estimate that the 20% return on equity for 2005 will rise to 24% and that operating profit will grow at an annual 12% clip through 2010.

Add the father of ETFs to complement your ETF portfolio.

Carl T. Delfeld President & Publisher Chartwell Partners http://www.chartwelladvisor.com/

Carl has over twenty years of experience in the global investment business with a strong background in Asia.

• Author of global investor primer "The New Global Investor"
• President of the global investment advisory firm Chartwell Partners
• Publisher of the Chartwell Advisor ETF Report and Asia-Pacific Growth
• Columnist on global investing with Forbes Asia: "Global Gambits"
• Former U.S. Representative to the Executive Board of Asian Development Bank
• Chairman of the global economic strategy think tank ChartwellAmerica
• Asian specialist with the U.S. Joint Economic Committee and the U.S. Treasury
• Former member of the U.S. Asia Pacific Economic Cooperation Committee
• Former investment executive with Robert Baird & Company and UBS
• Graduate of the Fletcher School of Law & Diplomacy with economics scholarship from U.S.-Japan Friendship Commission
• Exchange student at Sophia University, Japanese Ministry of Education Fellow at Keio University

Openwave Systems Inc. provides Communication Service Providers (CSPs), including wireless and wireline carriers, Internet Service Providers (ISPs), portals, and broadband providers worldwide, with the software and services they need to build boundary-free, multi-network communications services for their subscribers.

Openwave has a very unique and valuable business in the wireless data market. It has a dominate market share of 50% in both the browser and in the gateway transitions for mobile phones. Both products are a core element in the data cell phone market.

Our philosophy is to own the critical elements in markets that appear to have revolutionary growth. In January 2004 we wrote an article saying the wireless revolution has begun. Today based on very recent guidance from Texas Instrument (NYSE:TXN) Qualcomm (NASDAQ:QCOM) and other third party data it appears that wireless data market is actually accelerating. That appears opposite common wisdom judged by the way the world equity market and Openwave stock is trading for the last month. Usually revolutionary growth acceleration is misunderstood. I believe that robust growth from wireless data will catch many people by surprise when it is fully recognized.

The browser and the gateway business are key’s to Openwave’s success. Again it is our philosophy to own critical monopolistic elements inside an industry. We often equate our philosophy to a roof over your head and the gutter that controls the flow of water. Most water when it rain will land on a shingle but will collect in high volume in the gutters. Thus a single gutter can control as much water as all the shingles combined. This model of finding the essential elements or monopolist companies, judged by the many top rankings awarded to us by third party profession indicates a very successful approach.

In wireless data market the gateway and the browsers form what we believe are that critical element in the industry with Openwave a dominate position in both those markets. This dominance of the critical element/monopoly creates a natural mote or barrier as Openwave is in a better position to bundle, integrate, and test its products, thus become a natural extension of their browser and/or gateway for every new service they enters. This bundled approach as Microsoft has proven over time not only has a higher comfort advantage for it’s users but also often could be produced at a far lower cost which the phone companies enjoy. These many economies of scale of a dominate player is attractive to the phone companies when they are both reviewing new or existing services. Put yourself in the place of a large carrier do you want to work with a new firm, with no proven history which would include additional integration, testing, billing plus on going maintenance or would you prefer an existing firm to increase their service or possibly just bundle the service into a existing product. That’s why it’s very hard for new wireless firms to make a presence in the wireless data market and the more established companies to consolidate when newer wire data services form.

It appears industry wide that the consolidators including Comverse Technology Inc. (NADSAQ: CMVT) and Amdocs Ltd. (NYSE:DOX) appear to have advantage over many newer companies. Both of those companies specializes more on the back end. The higher growth market for phones will be with the data services and in my opinion Openwave is the best positioned as the industry continues to consolidate.

About 60% of Openwave quarter is already booked not including about an addition 10% is pay as you go. That means Openwave needs about 30% of addition new revenues in the quarter. That indicates that Openwave has far smaller hurdle rate than most companies. The data supports that the number of new data phones growing combined with the rising usage of each phone with no new major competitive threats entering the market the probability of carriers to reorder is increasing.

Openwave’s high valued license revenues.

Last quarter Openwave reported that licensing revenues was over 50% of total revenues and it had 97% gross margins. The licensing revenues make up over 70% of Openwave’s gross profit. Understanding Openwave’s business model is very simple if the licensing long term grows so will the profits so if licensing long term declines so will the profits.

The last quarter the licensing saw some of the best quarter over quarter growth of (16%) and year over year growth of (34%). Over the last two year period Openwave’s licensing revenues grew at a 23 % annualized rate.

Valuation.

Openwave is now valued at about 12 time future earning and when you add up its dominance in market: The profitability of it core business and the business outlook for the wireless data industry. My opinion is this company should trade at a premium to its data wireless peers.

Risk.

The market value of Openwave stock and the wireless data industry have had many very large fluctuations in stock market value over time compared to their peers. Investors seeking to lower volatility should look to other investments.

The major risk is that management underperforms. Since this is still a relatively new management team and the stock market saying with its large sell off of Openwave’s stock that this quarter will be a very difficult quarter, it’s now time to see if the management team can execute. The stock market in my opinion has already priced in a earning problem and any minor miss by management while still retaining their long term forecast , I believe would be rewarded.

Conclusion.

It’s my opinion this is what you look for in an investment, a company that has repeatedly demonstrated, since the new management has been in place, they are achieving their goals, and have echoed repeatedly said it’s on track for the long term. Openwave has a dominate position that is becoming more embedded in most major carriers every day. With it very high margins core business over time it can become very profitable business. It appears the market for its core products is accelerating and its stock market value is down significantly; again this is what I look for when I invest.

Randy Durig manages several portfolios’ including the Monopoly Technology Portfolio to see the full list go to http://www.durig.com or http://www.money-manager.us

Durig’s Monopoly Blue Chip Portfolio National Performance Rankings: 3rd In the United States, Ranked by 3 year annual return, for Large Capitalization Blend, 4th Quarter 2005, By Money Manager Review.

Durig Capital is a registered investment advisor. If you know someone that would like more information about this unique and specialized approach email rdurig@durig.com or call toll free 877-359-5319.

Randy Durig owns Openwave in his discretionary client’s portfolios and in his own account. Past performance is not a guarantee for future returns. All information we believe to be correct but make no guarantee to accuracy.

While typically investors rely on a combination of fundamental, technical, and macroeconomic indicators to help their investment purchases, in the case of Pegasus Wireless Corporation (PGWC), the stock’s price seems to abide by only the technical features of price and volume. Found in the technology sector as a company focused on providing wireless networking, recent volume increases have led many to take special heed on the volatility this particular equity is engaged in.

With a beta of near 16, the company has experienced recent ups and downs concerning its price over the last few weeks encouraging a risky situation for potential investors. While the stock may not have the same risk as buying a Milken junk bond, the small cap stock does have an immense interest from potential investors looking for a quick profit. Down from its high prices of 2002 of nearly $1200 (adjusted for splits and dividends) to close to $7.00 currently (July 2006), Pegasus presents itself as a great buying opportunity. Looking at the fundamentals such as its P/E ratio of nearly 900 and its EPS of 0.01, the situation may seem meek in terms of placing bets for this stock, and having only mediocre cash flow growth and decent revenue growth only add to the negativity of purchasing this stock. While the argument is valid and can be ascribed to the falling prices experienced over the past few years, with increased volume there is a different attitude towards this stock which rests on technical analysis.

Unequivocally over the past few months especially, this equity has had ups and downs which could have unequivocally provided an investor with nearly 50% capital gains or losses in a period of less than a month. While some may argue that the trend is strictly based on the market fluctuation of supply and demand, the occurrence of almost equally spaced out opportunities equate itself of being something of note. With a standard support level of near $4, and a resisting level which has fallen but still remains close to the $10 mark, the question now does not concern at what price is the best for buying the stock, but how long will it take to complete this almost cyclical pattern.

While some may say that the stock is closely following economic news in the form of interest rates, pressure in the Middle East, or increasing oil prices, the situation that the equity presents is an uncommon one and lends itself to believe that technical analysis may have more validity than originality argued for especially in relation to fundamental analysis. While I cannot confirm if the stock will continue in such a cycle, I do recommend taking special notice of the price in the next few months to see if it continues this journey, and I also recommend that this small cap stock as a buy at any price between $4-5.

For more information email Dennis of BirayNetworks at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr/