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Crafty_Dog
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« on: November 06, 2006, 10:40:32 AM »

This thread is for chatter on particular stocks.  I'll start with a couple I've filed under the heading of "reckless"

Based upon a Spear report suggestion, I am in on MVIS at 1.90, so I am up 50% in very short order.

KVHI (think Sat Radio like XMSR, but instead its for TV-- which includes military battlefield application).  I rode this one up and down on its ride to 30 and got out too late to profit much, but got back in , , , just in time for the recent drop on options issues.  Ugh-- but I've bought some more in the 11s.  We shall see.

On a less reckless basis, I'm following David Gordon's calls on GOOG, UARM and am looking to fatten my position in RACK.

Even at last again on IRF.
« Last Edit: August 16, 2007, 01:47:50 PM by Crafty_Dog » Logged
Crafty_Dog
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« Reply #1 on: November 23, 2006, 07:16:42 AM »

http://eutrapelia.blogspot.com/

New suggestions from David Gordon.  Highly recommended.
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Crafty_Dog
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« Reply #2 on: December 04, 2006, 11:29:19 PM »

Solid steady progress from the Spear Report's water play UU.

Looks like I timed well my entry into AQNT.
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Crafty_Dog
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« Reply #3 on: December 13, 2006, 03:48:49 PM »

Well RACK is not looking good  sad

Looking at a longer term chart, I'm re-entering KVHI.  Like XMSR and SIRI for sat-radio, KVHI does the same for mobile sat-TV.  They also do a lot for the military (think of a tank with a TV screen showing what is going on from other POVs).

Feel free to contribute chatter here folks.
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Crafty_Dog
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« Reply #4 on: January 12, 2007, 09:57:41 AM »

I rode out MVIS's pullback from the 3.25 area and now it pulls back from 3.90 area (3.80 is a double for me in 10 weeks).

================

FWIW, here's a teaser on MVIS from the Gilder Report:

The Week / A New Vision for Microvision

Gilder Technology Report’s Charlie Burger: By combining its proprietary silicon micromirror with modulated light sources, Microvision (MVIS) enables higher-intensity, finer-grained imagers and displays using a fraction of the size and power of rival systems. Though it possesses the single most potent display technology in the industry, Microvision has for years been foundering in uncharted waters, steered by a Magellan management pursuing too many difficult applications too early.

 

Now, new management fresh out of General Electric (GE) appears to be steadying the ship. After a decade filling key marketing, operations, and product development roles at GE, Alexander Tokman jumped to Microvision a year ago July as operations chief. Quickly gaining the CEO spot last January, he brought in marketing and sales chief, Ian Brown, and R&D head, Sid Madhaven, with a combined 26 years of experience at GE.

Finally, Microvision becomes as focused as its photons

The key goal of the new team is development of an integrated photonics module (IPM) or microprojector to be used as a common display engine in its new products. Small enough to integrate into a cellphone or iPod, the microprojector will include the silicon micromirror (about a square millimeter in size) and light sources, electronics to wiggle the mirror and modulate the light, a controller, and memory.

 

Three separate beams of red, blue, and green light from either LEDs (light emitting diodes) or semiconductor lasers shine on the mirror. Gimballing on two axes, it flickers to project 30 million pixels a second onto a surface such as a wall. Even though the mirror reflects one pixel at time in raster fashion, it does it so quickly that our brains “see” a static image or continuous movie. To produce different colors during the scan, the light sources are modulated to emit beams at varying combinations of intensities.

 

In addition to functioning as a projector, Microvision’s display technology can be turned into a scanner or near-field camera that works well over distances that are about the same as those for a barcode reader. In this case, the light sources that bounce off the moving mirror are used to illuminate an object. A detector receives the scattered light energy and converts it to electrical signals stored in the appropriate memory locations based on the corresponding pixel position, thereby reproducing the object. Because the time the beam remains on any given spot is a very short 20 nanoseconds, there’s virtually no motion blur.

 

Tokman is focusing on three specific product areas: (1) miniprojectors, including embedded projectors inside cellphones and standalone models that will work with portable devices; (2) head-up displays (HUDs), now making their way into luxury cars, that shine an image directly in front of the driver, just above the steering wheel, displaying information about the engine, weather, navigation, and traffic; (3) eyewear that creates immersive experiences for gamers and movie buffs, giving them a virtual screen equivalent to an 80- to 100-inch display.

 

Management is focusing on potent markets. By 2008, some 80–90 percent of all cellphones—some 800 million shipped that year—are expected to have mega-pixel cameras and/or be capable of receiving broadband video. Nokia (NOK) is already looking at technologies to integrate projectors into mobile devices, and several large consumer electronics companies are reportedly developing microprojectors based on very small display technologies. And head-up displays are becoming popular in cars for safety, for convenience, and as a differentiator for luxury models. Automakers installed several hundred thousand units last year and could increase that to 4 million units a year by 2010.

 

But when the consumers and manufacturers arrive, will Tokman be there to meet them? …

Learn more, by reading Charlie Burger’s complete Microvision analysis. Logon with your GTR subscriber ID at http://www.gildertech.com/ now.

-- RELATED NEWS --

Hands-on With Microvision's Itty Bitty Projector
http://www.engadget.com/2007/01/08/hands-on-with-microvisions-itty-bitty-projector/

CES 2007: Microvision to Debut Miniature Projector
http://gizmodo.com/gadgets/gadgets/ces-2007-microvision-to-debut-miniature-projector-226157.php
« Last Edit: January 12, 2007, 10:03:02 AM by Crafty_Dog » Logged
Crafty_Dog
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« Reply #5 on: January 12, 2007, 05:30:34 PM »

Big move by KVHI today-- apparently the market liked what it heard this morning:
=========

KVH Industries' CEO & CFO to Speak at 9th Annual Needham & Company Growth Conference
7:30 AM EST January 11, 2007
KVH Industries' (Nasdaq: KVHI) president and chief executive officer, Martin Kits van Heyningen, and chief financial officer, Patrick Spratt, will be speaking at the Ninth Annual Needham & Company Growth Conference in New York City on Friday, January 12, 2007. The presentation, which is scheduled for 9:30 a.m., will be simulcast on the Internet and can be accessed via KVH Industries' investor website, http://investors.kvh.com. An audio archive of the presentation will also be available for replay later in the day at the same website address.

About KVH Industries, Inc.

KVH Industries, Inc., is a premier manufacturer of systems to provide access to live mobile media ranging from satellite TV to telephone and high-speed Internet for vehicles and vessels as well as a leading source of navigation, pointing, and guidance solutions for maritime, defense, and commercial applications. The company's products are based on its proprietary mobile satellite antenna and fiber optic technologies. An ISO 9001-certified company, KVH is based in Middletown, Rhode Island.

SOURCE: KVH Industries

 Chris Watson KVH Industries 401-845-8138 cwatson@kvh.com 
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ccp
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« Reply #6 on: January 12, 2007, 09:22:48 PM »

Crafty

I notice David likes Isis pharmaceuticals on the basis of thei cholesterol drug.

Some good caveats from the Street on Isis:

http://www.thestreet.com/_yahoo/newsanalysis/investing/10322093.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
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ccp
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« Reply #7 on: January 30, 2007, 05:26:39 PM »

An interview with Jim Rogers.  Better to own gold, oil, copper, natural gas, etc., or gold, oil, copper, natural gas *stocks*:

http://www.investment-u.com/ppc/splash_rogers.cfm?kw=XVVIU329
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Crafty_Dog
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« Reply #8 on: January 30, 2007, 05:43:08 PM »

Price=Risk.  grin  I am in ISIS at  10.18

As for Gold and Silver:

For silver I am a triple plus on PAAS.
For gold, I recently re-entered and am slightly ahead on AUY and slightly behind on GFI.

For oil/gas various positions.  Of course the recent downturn has diminished current value, but these I hold with a long term mind set.
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Crafty_Dog
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« Reply #9 on: February 01, 2007, 02:44:36 PM »

Apparently I come late to the water hypothesis, but still it has treated me well.  I see WTS may be about to break out.
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Crafty_Dog
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« Reply #10 on: February 02, 2007, 03:14:29 PM »

KVH Industries receives 5-year sole-source contract from U.S. Military
7:31 AM EST February 1, 2007
Co announces that it has received a sole-source contract from the U.S. Army Tank and Automotive Command for the purchase of KVH's T.A.C.N.A.V vehicle navigation systems for use on U.S. Army combat vehicles. The contract is potentially worth $11.5 mln over five yrs.

I'm under water at the moment on this one, but at the moment look to ride it out.
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Crafty_Dog
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« Reply #11 on: February 03, 2007, 02:42:50 AM »



David Gordon makes some new calls:

http://eutrapelia.blogspot.com/
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ccp
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« Reply #12 on: February 04, 2007, 02:32:52 PM »

Crafty,

When did David first rec intuitive surgical?

I remember reading something about them sometime back.

A ten bagger!   Ah those were the days.
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peregrine
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« Reply #13 on: February 04, 2007, 08:47:06 PM »

Wow...
haven't browsed this forum, and i find this one. awesome.

With your daily reading Crafty, i'm not suprised you're well rounded. You seem very much the right character to do well - risk taker, researcher, consntantly reevaluating, cpu nut. To add - your following of the politics and war on terror, gives you an edge fundamentaly wise to military type financial vehicles, as well as inverse type commodities like metals and oil.

I have not actively played in a couple of years, part of it the commitment to my training and some personal...the game can be a huge time and energy vaccuum. I still love the game and can't wait to actively reengae with full throttle. It used to be my passion. No where else is the potential bigger or defeat faster. Again can't wait to play full steam, but i may have to prioritze and scale into it for time is the most precious commodity.

Odds and scaling are my favorite strategies.

I do want to develop a 'Shock- News' type plan with various default orders sitting at various brokers. I love that things fall 66% faster than they rise. That's on my horizon... and is not one that requires daily adjustment, prodding and pruning.   
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Crafty_Dog
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« Reply #14 on: February 22, 2007, 02:37:05 PM »

KVHI has been scaring me a bit of late and been scraping along a support line, so today was a nice day.  Here's this from yesterday:

KVH Joins Lazydays in Providing Satellite TV to RV Owners
7:30 AM EST February 21, 2007
KVH Industries, Inc., (Nasdaq: KVHI) announced today that Lazydays RV SuperCenter(R), the nation's number one RV dealership, has joined KVH's nationwide independent RV dealer network. Lazydays will offer KVH's premier line of TracVision(R) mobile satellite television antennas, and the TracNet(TM) mobile Internet system. Offering satellite TV systems to customers directly through leading independent RV dealers like Lazydays is a key element in KVH's commitment to enhancing its national RV dealer network and providing its customers with the best sales, installation, and after sale support available in the RV marketplace.

"We are thrilled to be joining forces with Lazydays to bring live satellite TV and HDTV programming to RV customers," said Ian Palmer, KVH's executive vice president for satellite sales. "We believe that independent dealerships offer the greatest value to our customers in terms of sales, quality installation, support, and customer satisfaction. Lazydays RV SuperCenter has earned its place as the nation's largest single-point dealership due to its professionalism, commitment to customer satisfaction, and its outstanding facilities and staff. They will provide KVH customers with outstanding service in selecting the right equipment, installation, and after-sale support. We look forward to building on this valued relationship and, in doing so, benefit KVH, Lazydays, and most of all, our mutual customers."

Lazydays is now offering its customers KVH's award-winning TracVision satellite TV product family, including the in-motion TracVision R5, the stationary, automatic TracVision R4, and the premier TracVision R6 in-motion satellite TV system. These all-digital, HDTV-ready systems allow RV passengers throughout North America to enjoy more than 300 channels of digital programming and commercial-free music via the DIRECTV(R), DISH Network(TM), and ExpressVu services. Lazydays will also offer KVH's TracNet 100 Mobile Internet system, which provides mobile high-speed Internet access via the TV screens of the RV as well as through an integrated WiFi network that turns the RV into a rolling hot spot.

"Our priority is to offer our customers the best experience possible at all times, whether it's the quality of the accessories they choose, the installation and service, or the entertainment options available," said Bob Grady, director of parts and service for Lazydays. "KVH shares our commitment to superior quality and the TracVision satellite TV systems are a great match for our mission and our customers' expectations."

About Lazydays

Lazydays RV SuperCenter (lazydays.com), founded in 1976, is the largest single-site RV dealership in the world. Located on 126 acres outside Tampa, Florida, Lazydays has an 86,600 sq. ft. main building, 273 service bays, 300 RV campsites and more than 1,200 RVs on display. This national RV destination will host more than one million visitors and serve more than 300,000 meals this year alone.

About KVH Industries, Inc.

Middletown, RI-based KVH Industries, Inc., is a leading provider of in-motion satellite TV and communication systems, having designed, manufactured, and sold more than 100,000 mobile satellite antennas for applications on boats, RVs, trucks, buses, and automobiles. Winner of the prestigious General Motors Innovative Design Award, CES Innovation Award, 22 National Marine Electronics Association "Best Product" awards, and a finalist for the Automotive News PACE Award, KVH's mission is to connect mobile customers with the same digital television entertainment, communications, and Internet services that they enjoy in their home and offices.
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Crafty_Dog
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« Reply #15 on: April 21, 2007, 10:28:08 AM »

I have followed XMSR and SIRI for several years now, but have not invested in either of them since XMSR was as 32, so I post this WSJ editorial more out of sentiment than anything.

What's the Frequency, NAB?
April 21, 2007
Ever since satellite-radio companies XM and Sirius announced plans to merge back in February, the National Association of Broadcasters, which represents commercial AM and FM radio stations, has been urging federal regulators to quash the deal on antitrust grounds.

The NAB's argument is a remarkably weak one, and the government would be remiss if it became a party to the group's transparent agenda, which is to stop satellite radio from luring away any more of its listeners than it already has. Which isn't much, otherwise the two satellite-radio companies wouldn't be merging.

In the name of preventing some phantom "monopoly" from forming, the NAB is effectively asking regulators at Justice and the Federal Communications Commission to help it keep the competition in check and thus deprive consumers of figuring out whether this is a viable alternative radio service.

Don't take our word for it, by the way. Last October, just months before XM and Sirius unveiled their plans to combine, NAB President David Rehr spoke openly about the make-up of the current marketplace for audio news and entertainment. "We still must address new competitors," he said in a speech to the National Press Club in Washington. "On the radio side, we have satellite radio, Internet radio, iPods, other MP3 players, cell phones, and many, many other things. How will we compete?" Not much we can add to that.

Apparently that argument was fine so long as XM and Sirius were lost in space, losing money. Today, Mr. Rehr is saying that regulators should consider satellite radio a unique and separate market when assessing the competitive impact of the merger. In testimony before Congress, Mr. Rehr said XM and Sirius are seeking to form a monopoly that "would undermine audio content competition, not enhance it." The NAB has also commissioned several analyses of the merger that employ sophisticated Herfindahl-Hirschman Index measures and the like to determine that XM/Sirius would dominate the market for satellite radio.

It's true that a XM/Sirius merger would leave us with one satellite-radio provider. But opposing the deal on those grounds is wide of the mark. Sometimes the best response to what a person is saying today is what that person has said in the past. And despite Mr. Rehr's efforts of late to take it all back, the reality is that he had it right the first time.

Monopolies are harmful when they are the sole seller of a product or service with no close substitutes. And as Mr. Rehr acknowledged, substitutes -- competitors -- abound in the marketplace. XM and Sirius, whose subscribers currently represent less than 4% of total radio listeners, aren't merely competing for each other's customers; blocking the merger on that assumption makes little sense. The real objective of XM and Sirius is to lure listeners from free radio, the Internet, MP3 players, music channels on cable television, cell phones and who-knows-what-other options coming down the pike.

XM and Sirius, which have a combined 14 million subscribers, continue to lose money. More than 220 million people tune into free radio each week. No one knows whether the public will ever really take to the pay model, but it's not the role of the government to help the NAB smother a fledgling competitor in the crib. This appears to be a merger of desperation more than anything, and blocking it could well result in no satellite-radio providers and thus fewer listening options for consumers. Consumers, not the government, should decide whether one satellite-radio provider is one too many.

This isn't the first time the NAB has tried to forestall competition from XM and Sirius. The group opposed granting them radio licenses and urged the FCC and Congress to ban satellite providers from offering local weather and traffic reports. This is more of the same.

Telecom policy should not be about picking winners and losers but about encouraging investment and innovation. For that to happen, what's most important is competition among technological platforms: cable, telephone, wireless and satellite (for now). Policy makers and regulators would do better to focus less on static models of market share within one platform and more on making sure rival platforms continue to exist. Consumers will happily take care of the rest.
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Crafty_Dog
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« Reply #16 on: May 02, 2007, 05:10:05 PM »

Sent to me by a friend from my Gilder days-- Marc

For the record, I have what is for me a fairly solid size position.

====================================================

For you LNOP shareholders, I enclose the following interview with Eli Fruchter, CEO, in an Israeli newspaper, Globes.  Right now, the company's annual revenue is $8 million.  By 2008-2009, the company should capture at least 50% market share of the $250 million market.  This is why I have recommended buying shares in this company.  We are looking at 1200% revenue growth from 2006 to 2009.
 
 
*********************
 
Shiri Habib 2 May 07 18:56

Two years ago, Eli Fruchter, President and CEO of EZchip Technologies Ltd. said that it was not inconceivable that the company would record revenue of $75 million in 2008. He was still optimistic when he talked to "Globes" last week although this time round he refuses to give figures. "The market we're targeting will reach $250 million in 2008-2009. I expect that we will have a sizeable chunk of it," he predicts.
Yokneam-based EZchip, which is controlled by LanOptics Ltd. (Nasdaq: LNOP; TASE:LNOP), is a fabless company that develops high-speed network processors. EZchip's chip sits in the router, and Fruchter describes it as the "Pentium of routers."


Most of EZchip's customers presently use its first generation NP-1c processor. The company began shipping the newer NP-2 to customers at the end of 2006. At the same time, it is also developing the next generations of processor, the NP-3 and NP-4.

EZchip's potential customers are telecommunications equipment manufacturers and the three largest companies in this sector are Cisco Systems Inc. (Nasdaq: CSCO), which controls 50% of the market, Juniper Networks (Nasdaq: JNPR), and Alcatel-Lucent (NYSE: ALU). EZchip has more than 100 design wins, and two of the three companies just mentioned are its customers. Fruchter refuses to say who they are but describes them as the "crème-de-la-crème in the field."

One individual who has been forthcoming about this is tech stocks guru George Gilder, who has been following EZchip for several years. In his latest report, Gilder writes that EZchip's revenue is likely to increase thanks to the sales of NP-2 processors, followed by sales of the next generation of processors, NP-3, to Cisco and Juniper from the beginning of next year. He believes that revenue of $100 million or more for EZchip in 2009 is definitely possible. For the sake of comparison, the company ended 2006 with sales of $8.5 million.

"We began shipping NP-2 processors in the third quarter of 2006," says Fruchter. "Every router has many cards and every card has our chips. The previous generation of processors had one chip in each chassis, while the new generation can take up to 64 chips. The difference in price is such that the NP-2 costs about half of the NP-1, so even if you don't fill the chassis with our chips, the potential revenue from NP-2 is ten times that of NP-1."

Since the time from the announcement of a contract win to the launch of a completed product on the market can sometimes be two to three years, EZchip is now recognizing revenue from previous years. This fact should on the face of it give the company good visibility and the ability to publish forecasts, but it doesn't do this. "We have visibility for one quarter and that's not enough," says Fruchter. "The customers' products need to prove themselves on the market. In order to increase our visibility, we need more large customers that have reached the production stage." In any event, he adds the company should not be judged on a quarterly basis. "If anyone is expecting stable growth, it won't necessarily happen. There could be surges from one quarter to the next. At the annual level, 2007 should be a lot stronger than 2006."

Globes: And when will the profit come? You lost $12.3 million in 2006.

Fruchter: "We are spending just over $1 million a month, $12-13 million a year, and with an expenditure level like this and a profit margin of around 60%, a quarter in which we recorded $5.5 million in revenue would be a profitable one. I can't say exactly when this will happen, but it will."

As a start-up, EZchip was not required to publish its results, but it is controlled by LanOptics, which is a public company. LanOptics has a market cap of $211 million, reflecting a value for EZchip of $270 million, in which it has a 78% stake. EZchip is LanOptics' sole activity, and LanOptics recently decided to raise its stake in EZchip to outright ownership. Last December it increased its holding from 60% to 78% after it gave EZchip's minority shareholders its own shares in exchange for their holdings.

"The current structure does not give us any advantage," says Fruchter, who also serves as LanOptics chairman. "It started when EZchip needed a lot of money, and LanOptics didn't have enough. We raised a total of $60 million through venture capital funds, the last part of which was raised in 2005. The goal is to simplify the structure and return to full ownership by LanOptics. The problem here is not efficiency but simplicity - people like simple things."

Fruchter notes that today two funds remain investors in EZchip - Goldman Sachs and JK&B Capital. "They hold preference shares in EZchip, and if they convert them they will receive ordinary LanOptics shares," explains Fruchter. "I assume that once LanOptics's stock is at a certain price level, it'll be worthwhile for them to convert. I believe it is worthwhile for them now. There's a good chance that it will happen as early as next year." Once it does, Fruchter believes that LanOptics will change its name to EZchip and continue trading under its new name.

EZchip is already acting more and more like a public company. The company plans to hold a conference call following the publication of its financials for the first quarter, and a road show, and it also intends to work with an investor-relations company. "The main reason for this is that a lot of investors are interested in us, largely thanks to the "Gilder Reports," says Fruchter. The company currently does not have any coverage by investment houses.

Does EZchip's market cap give a fair reflection of the state of the company and the market?

"I'm not an analyst and I don't engage in calculations of profit multiples. It has transpired from conversations with investors that the fairly high value is derived from their view of EZchip as a growth company. This is typical of many companies at the early growth stages."

EZchip recently announced a collaboration with Marvell Technology Group (Nasdaq: MRVL), an announcement that sent LanOptics' stock up sharply, even though the collaboration was known before the official announcement was made. The two companies are collaborating on R&D, marketing, and sales of network processors to the Ethernet market. "The goal is to increase exposure to Tier 1 customers, a sector in which Marvell has a very strong grip," says Fruchter. "Marvell is active primarily in the enterprise solutions sector, and our chip is designed for service providers. The combination enables us to approach customers of both companies."

Do you mean customers that are apprehensive about working with a small company like EZchip?

"That's one good example."

The collaboration with Marvell was a form of response to Broadcom Corp. (Nasdaq: BRCM), which entered EZchip's market after it acquired the privately-held Sandburst Corporation at the beginning of 2006. "Broadcom is our main competitor," says Fruchter. "Broadcom and Marvell are acting in a similar fashion to each other. They both came from the enterprise field and are trying to reach service providers, Broadcom by way of an acquisition, and Marvell through a collaboration."

Did Broadcom approach you or make an acquisition offer to you too before it acquired Sandburst?

"I'd rather not comment on that."

But do you feel that EZchip could still be an acquisition target?

"Yes, of course it could. Looking ahead, the most reasonable scenario is that LanOptics will buy the remaining holdings and reach 100% ownership, and that EZchip will continue to grow as a public company. Another option is that EZchip will be acquired, before or following a full merger with LanOptics. A third option, albeit highly unlikely, is that EZchip itself will make an offering, but there is no need for this at present."

Aside from Broadcom, EZchip faces another kind of competition, since there are companies that prefer to develop their chips in-house. One competitor now quitting the market is Intel Corporation (Nasdaq: INTC). "Intel announced that it would no longer be making any developments in the field," says Fruchter. "They're in the process of exiting the market. They developed low-speed processors, while we have been developing high-speed processors. I imaging that had they stayed in the market, they would have developed high-speed ones too." Fruchter believes that Intel decided that a market worth hundreds of millions of dollars in which other companies were also active, was not suited to a company of its size.

Fruchter notes the many changes that are now taking place in the market. "The standards are changing. The whole idea of processors is to replace chips, which are not flexible. This allows for changes to be made and the product's life to be extended when the market changes," he says. "The move to processors is a move to another technology and it takes time."

According to Fruchter, the market was worth less than $20 million in 2006, but it has grown. "Service providers have seen some dry periods," he says. "They didn't invest in new infrastructures and routers, things are now changing. There has also been a move to Internet services, which necessitates the replacement of old infrastructures, something that helps to push the processors."

Are there any other directions that EZchip could develop in?

"We began with large and expensive chips, and working our way down from that is easy. We're looking at further options, such as for example, entering the developing wireless market."

Fruchter says EZchip could also acquire companies for the purpose of growth, although the company wishes first to complete the move with LanOptics.

How will EZchip look in a few years from now?

"I don't want to commit myself as to figures, but the company will sell at levels that are a lot higher than those today. We'll take our technology to additional markets as well."
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« Reply #17 on: May 22, 2007, 08:51:30 AM »

In the last couple of weeks I have finally jettisoned KVHI-- a big loser for me than totally offset my gains in MVIS.

I retain the big position in MVIS and have entered into bigger positions in ISIS and LNOP.

ISIS is per David Gordon's recommendation.  His http://eutrapelia.blogspot.com/ offers some of the finest market commentary and stock commentary/advice to be found anywhere. (I recently doubled by solid position in GOOG at 462 on his call)

LNOP is a hot choice of George Gilder, whose advice led me to seriously disasatrously consequences a few years ago, but Rick Neaton who continues following the Gilder universe has persuaded me about this one.

TAC!
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« Reply #18 on: May 31, 2007, 12:01:30 AM »

Also, I am back to breakeven on CREE!  smiley

PCL chugs forward nicely.
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« Reply #19 on: June 02, 2007, 08:56:38 AM »

Another fine call by David Gordon on JCG, which jumped over 10% yesterday.  Thanks to his table pounding I expanded my position just in time.
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« Reply #20 on: June 09, 2007, 01:05:29 AM »

I have followed David Gordon's decision to exit from ISIS for now at about a 10% loss.  DG feels that it looks to be going down a bit further and, assuming the story, fundamentals remain as they are, will re-enter at that time.

MVIS is now a triple for me  afro
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« Reply #21 on: July 06, 2007, 09:19:39 AM »

http://chip.seekingalpha.com:80/article/39626

LanOptics Subsidiary EZchip In Bed with Cisco
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« Reply #22 on: July 08, 2007, 03:22:32 PM »

CraftyD,

I own some level three by way of corvis by way of broadwing.  A recent report from LVLT suggests the real tidal wave for broadband will come with the adoption of high definition TV which requires multiple times of bandwidth then anything being used now.   Does Gilder or DMG express any theories as to when this will occur?

Will LNOP's processors also be needed in the middle of such networks?

What about the political risks of owning an Israeli company?  I looked on their website and the only address is listed in Israel.   This makes me warry of investing in an Israeli company.

I noticed the surgical robotics company is doing great.  Now that there are some studies coming out that show reduced risks compared to other surgical techniques as well as healing benefits I would think it only a matter of time till this gets more universally adopted.  If it can be shown that it is *cost effective* by way of reduced hospital stays, less complication rates, etc. - despite the higher costs of the equipment than this seems a no brainer.  It would still take time for the pressures on surgeons to learn this new kind of procedure to override their resistance to change.

It sounds like Medicare does not have any special reimbursement rate for this procedure.  The reimbursement rate for laproscopic procedures is lower than for open procedures.  This despite the fact that laproscopic procedures are technically more difficult for the surgeon to perform.  The reason is that the cost of care for the patient is reduced because of faster healing, faster they can return to work, etc
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« Reply #23 on: July 09, 2007, 07:18:24 AM »

I'ved asked Rick Neaton to come comment on your post.  I know that he is still following the Gilder universe and is particularly positive on LNOP.

As for David Gordon, try his excellent blog at http://eutrapelia.blogspot.com/
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« Reply #24 on: July 09, 2007, 11:01:26 AM »

EZChip NPU's operate in line cards in the metro networks.  These cards are installed in switches that route traffic from the core networks, the big pipes between cities, to the netwroks that ring the various metro areas.  They are also installed to route traffic from the metro netwroks to the networks; e.g., enterprise networks, and other end users that exist at the other edge of the metro network.  Their appeal is their programmability which is very useful to the carriers in the metro because their functions can be adjusted to meet changing circumstances.

LNOP, the parent of EZChip is a fabless company.  Thus, war in Israel would not impact the company's ability to produce NPU's.  They are produced at Taiwan Semi and IBM.  The company backs up its intellectual property in several ways.  It does have operations here in the US.  They are mainly sales offices.

LVLT and Broadwing/Corvis focused more upon the core network.  There is not as great a need for lots of programmable switching in the core because there are not as many destinations for traffic as exist in the metro networks.  They can install ASIC's in the core more efficiently.  However, in the metro, the ASIC may not be as efficient because the carriers would need to replace them frequently as needs changed.  The NPU serves these needs better.

EZChip just announced a successful design of a 100gb NPU that should be ready for production in 2-3 years.

Revenues are expected to ramp seriously beginning in 2008.  A good stock to own in conjunction with EZChip is NETL.  They make a Layer 7 solution to overflow that occurs at that point.  The performance of that stock also gives the investor an idea of what to expect from LNOP.
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« Reply #25 on: July 09, 2007, 11:09:39 AM »

Outstanding Rick-- thank you!

Any comments on a buy price for NETL?  Buy now? Put in an order at? etc
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« Reply #26 on: July 09, 2007, 07:06:05 PM »

Hi Rick,

Great to hear from you.  Thanks for the excellent post.!!

I guess cable will handle the HDTV bandwidth at the edge until other carriers catch up.  Verizon is starting this on a small scale:

http://biz.yahoo.com/ap/070709/verizon_cutting_copper.html?.v=1

It seems fiber to the home is still eons away.

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« Reply #27 on: July 10, 2007, 01:10:48 PM »

Cable is not true fiber to the home because the actual connection to the home is usually standard coax that you can buy at Radio Shack.

VZ (Verizon) FIOS is the major residential fiber to the home project out there at this time.  AT&T U-verse relies upon fiber to nodes and lower capacity connections from nodes to the home.  However, both systems rely heavily upon IPTV as the means to distribute digital and HD content.  BTW, VZ is deploying the JNPR MX960.  Remember that the MX 960 contains the EZChip NP-2.

MSFT is a big player in IPTV and is involved with AT&T.  Most new overseas TV developments involve IPTV.
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PHO
« Reply #28 on: July 16, 2007, 12:27:26 PM »

PHO is a basket of water stocks, which IMHO is an increasingly important sector with excellent long term fundamentals.  PHO is one of my largest holdings (average basis of 17.50)  Slow and steady!
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« Reply #29 on: July 25, 2007, 03:07:34 PM »

LNOP

http://www.ezchip.com/Images/pdf/LNOP_Investors_070516.pdf
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« Reply #30 on: July 26, 2007, 11:05:33 PM »

Here is a great article my good friend "Jasen Davis" Wrote. He wrote it for "Maxim" mag and he now writes for Skinny.

Its a great article..Since its long and the site wont let you attach anything or post of 20000 words I will post it in over to post.



What’s NASDAQ and NYSE?
   “Nasdaq and NYSE are exchanges. Stocks typically either trade on the Nasdaq or the New York Stock Exchange. There are also lesser known exchanges like the American Stock Exchange and even electronic exchanges (ECNs) like Instinet, Island, and Archipelago. When a stock goes public, it will typically go public on either the Nasdaq or the NYSE. NYSE has stricter rules for allowing stocks to trade. Nasdaq is a little less stringent, but still has rules that prevent any small company from trading without meeting the requirements. NYSE is typically made up of traditional large companies like Ford, GM, American Express, etc. Nasdaq is mostly Technology, Biotech, and the like.”
    “Nasdaq trades stock through a system of Market Makers. When you buy and sell stock, you are not actually buying or selling with another individual - you are buying or selling from the Market Maker. The Market Makers have rules that govern what they must do (for example, they must provide a liquid market --- this means you will always have a way of buying or selling a stock). You can write an entire article just on the Market Makers. The largest of these is Knight Trading. The market makers determine the price of a stock, and the "spread" (difference between the current bid and ask) is where the market makers make their profits.”
   “NYSE trades through market specialists. There are specialists for all the major stocks, and the specialists understands the company they are responsible for and helps keep a fair price at all times. Again, an entire article could probably be written just on specialists.”
“S&P is not actually a market, it is a group of stocks (the most common is the S&P500) that make up an index. This index is tracked along with many others. The S&P500 index tracks the performance of a select 500 stocks. Nasdaq also has an index fund that tracks the largest 100 stocks that trade on the Nasdaq exchange. The most common index is the Dow Jones Industrial Index which is made up of just 30 stocks --- all big names that just about everyone has heard of.”
Thank you, Mr. Law.
Reading stocks is a fairly simple skill. A stock usually has it’s name, for instance, Microsoft Corporation, how much it’s stock is at the given moment, say, $71.20, and whether it’s up or down from yesterday (+.02, at the moment of this writing).
At www.cnn.com one can also click on the company itself to get a more detailed assessment of the stock. Continuing with the above example, Microsoft Corp. (MSFT) as of 7/17/01, opened at $70.66 a share, with a high of $71.48 and a low of $70.14.
Mr. Law gave me more insight in regards to this matter.
“Newspapers typically have the major stocks from the Nasdaq, NYSE, and AMEX listed every day in the business section. To really track stocks, the best way to do it is online. E*Trade has a free section where people can become members and get information about stocks without actually having an account. Two of my other favorites are http://quote.yahoo.com and http://cbs.marketwatch.com. These sites provide vast amounts of investing information all for free. Both allow you to set up "portfolios" of stocks to watch.”
   More on portfolios, later.
   I mentioned CNN’s website, and it is indeed the place to go to track stocks. It also has a section that gives you a list of brokers and how much they charge. I highly recommend that you go there.
   What’s an IPO?
   “An IPO is an Initial Public Offering. This is when a stock is first going to trade publicly. A few years ago, the IPO market was in a frenzy. Every day companies were going public, and the stock price would just skyrocket. Examples of huge first day gainers were VA Linux Systems (LNUX) and Freemarkets (FMKT). Both went up into triple digit prices on the first day of trading publicly. People who got shares at the IPO price made 300% or more on the first day. Both stocks are now trading well below their IPO prices.”
   
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« Reply #31 on: July 26, 2007, 11:08:20 PM »

* Continue*




“The trick to an IPO was actually getting shares at the IPO price. An IPO has an underwriter (usually multiple underwriters) that actually brings the stock to market. These underwriters typically cater to their largest clients (usually institutions) who get the vast majority of shares at the IPO price. It wasn't until recently that individual investors started getting access to IPOs. I believe E*Trade and Wit Capital were two of the first brokerages offering IPO shares to their clients. Even with this access, the number of shares given to these companies was small. And they had to distribute the shares to requesting clients. For a while, the usual number of shares available to an individual investor was typically 100. And these were generally given on either a first come first serve basis or through a lottery system. As demand grew, the typical allotment fell to 50 shares.”
“Currently, the IPO market is very cold, and not many companies are going public. The few that have have had either modest gains or even fallen below their IPO price. For now, it seems the IPO game is over, but it is definitely a cyclical thing as many years ago, Biotechs had a hot IPO market much like the Internet IPO market of a couple years ago.”
So you got money. You want to invest.
   You need a broker.
   A broker is a glorified bookie. Just like at the horse races. A broker takes your moolah, advises you on how to invest it wisely, and does all the work for you, turning your modest pile of moolah into a Matterhorn pile of moolah (hopefully), for a modest fee, of course.
   There are four laws about what to look for when choosing a broker.
   One is that he is easy to talk to.
   Two is that he does not pressure you.
   Three is that he pays attention and acts on what you say.
   Four is that he explains things until you understand.
   Those are good rules to follow.
   Remember, this is your money. He works for you. No “Boiler Room” tactics here, just make sure that those four things are happening and you will go far.
   If you are worried about a broker (like, you aren’t sure if he has ties to the Russian Mob) you can go to the National Association of Securities Dealers (or visit their website at www.nasdr.com) and look the broker up. They should have good things to say. Too many complaints (or the guy is not listed there at all) then you should drop him like uranium.
   I checked out the Buy and Hold broker’s corporation, and they offered a starting deal at a mere $6.99 per month for two trades, and every trade after would set you back $2.99, or a package deal of $14.99, with unlimited trades.
   Now, next, you have to pick the stocks you wish to invest in.
   There are many, many ways to do this.
   The Motley Fool (www.fool.com) has a technique called the Foolish Four.
   Stock Guru Michael O’Higgins, author of the book “Beating the Dow”, has a technique called “The Dogs of the Dow”, also known as “The Dow High Yield Strategy.”
   The thing to look for in any stock is low price, high yield. Simply put, you pay little and it becomes more. Easy enough. There are many different names for stocks. Penny stocks. Blue chip stocks. Preferred stock.
   Stocks are all a part of your portfolio. A portfolio is simply a term used to describe all investments and assets a company owns.
   One method, for example, is to research companies who were traditionally well off, according to the Dow Jones Industrial Average (a famous index of the cream of the crop of American businesses), but have taken a bad turn.
   You invest in these faltering corporations for a year, gambling on the fact that perhaps they just went through temporary bad times and will return bigger and brighter in the future. When they do, the 100 shares you bought for 50$ a pop (a five thousand dollar investment) will hopefully double (or even triple) to ten or even fifteen thousand.
   Yeah, I know, you are thinking of all that cash and your eyeballs are starting to sweat. Let’s back up a bit.
   No one…NO ONE can predict how a the market is going to be in the future. It’s just not possible. People have been trying to do it for decades. It’s like guessing which horse will get to the finish line first, or the winning numbers of the lotto. It’s voodoo. It’s called speculation, and sometimes it works and sometimes it does not.
   Basically, it sounds good in the short term, you buy several shares of Microsoft at $50.00 a share. Let’s say you bought 20 shares for a total of $1,000. Later that day, the market is full swing, the price goes up to $75.00 a share and you sell, sell, sell all of your shares and reap a profit of $500.
   Short term investing is fast and furious, and can be as successful as faith healing. Much like a game show, you can win big or lose big, and there are no guarantees.
   The moral of the story is, don’t bet your rent money in Las Vegas.
   Another method is so very simple you wonder why economic analysts and brokers get paid. “The Dogs of the Dow”, which I mentioned earlier, was invented by the famous broker’s group, The Motley Fool.
   You simple buy stock from ten companies that have the highest yield and hold onto them for a year. At the end of the year, if your stocks are not on the top ten list, sell them and buy shares in the ones that are.
   Simple, eh? Well, according to the Motley Fool, you can make $10,000 into $625,00 over the course of twenty five years.
   But start small. Start by investing, say, $100.
   I have already mentioned the broker part. You are going to need one. Well, you need to decide what type of broker you want to hire, a full-service broker or a discount broker.
   There are differences…when you get big time you will certainly want a full-service broker, but let’s put it this way: a discount broker will cost you $20, while a full-service broker from someplace like Merril Lynch can be up to $150, with an additional $150 annually.
   Bare in mind also that full service brokers are salesmen. They reap a profit based on what you buy, and how often you trade. As you can imagine, if you own fifty shares in a software company that’s cutting a deal to sell it’s new product to the U.S. Government, you probably want to hold onto those stocks until after the beta testing is done.
   Don’t think for a second that the company you decide to put your green into is none of your business. It is.
   For big investing, that is, when you have more cash to throw around, look into companies which are clearly doing well and building golf courses for their fat cat CEO’s= Microsoft, Disney, Starbucks, or look for companies that are universal= Gilette, Coca-Cola, Intel.
   But for now you are doing what’s called small cap investing.
   In plain argot, small cap investing is putting your money into companies that are moving up but don’t have their own company University like Microsoft.
   These companies tend to have shares on sale for $7 (yes, seven dollars, the price of a gallon of gas will probably be one year from now) with sales of only $500 million (gee, I wish I only made $500 million.) Typically, the company in question has a net profit margin above 7%, with insider holdings of 15% or more.
   Simply put, ask your broker, after you have found one and set up an appointment with him, to look for small, profitable, growing companies. Look for products that people want, like pencils, pens, soda, microchips, or look for companies that are researching something that is going to be big= like the cure for AIDS or hair loss.
   Brett Law offers his own advice on how to start investing.
   “The easiest way to start buying and selling stocks is through an online account. There are many online companies including E*Trade, Ameritrade, and Datek among others. They typically require some initial amount to open an account, and then you can start trading immediately. I think the most important thing to remember is that profiting from individual stocks is NOT EASY. It takes a lot time and energy as well as some luck.”
“ For most people just starting out, the best way to start is through mutual funds. Mutual funds own a variety of stocks, and when you buy into the mutual fund, you essentially own all the stocks within the fund. By doing this, you allow professionals to do the research, and you invest in the professional. Finding a mutual fund can be almost as difficult as finding a good stock. Mutual funds have a prospectus which describes the strategy of the fund including the type of companies they invest in, the size of the companies, etc. Individuals should try and match a mutual fund to the type of stocks they would be interested in owning.”
“Another fun way to begin investing is through an investment club. I've been the president of an investment club for the past few years now, and it is something that gives us a chance to meet every month or two to discuss our performance and present research to the rest of the group. Decisions on stock purchases are made through voting, and we all succeed or fail together while reducing each individuals risk. It also allows us to buy more shares and / or more stocks than we could if we were each investing on our own. Information on investment clubs can be found at the National Association of Investors Corporation (NAIC) at www.better-investing.org.”
I’d like to take this time to mention that, aside from being quite an effendee when it comes to investing, also makes a great deal more money than I do. He’s more than just a little worth listening to.
My advice?
   Invest in porn.
   You laugh, but porn is a big business that is going to go public with their stock in a major way. Men buy porn (no, really, they do.) and it’s not going to go away, despite what George Bush and the Pope think otherwise. It makes a pretty big profit, too…Steve Hirsch and David James, owners of Vivid Entertainment, are serious businessmen. They made a mere $1 million a few short years ago, but are expected to make $18 million in 2001.
   Not bad, not bad.
   Investing can’t be learned overnight, quite obviously. It’s not something that is automatic, either. It takes time to learn, like any other hobby, but the principles are constant and fundamental, just like changing the oil in a Buick or a Honda.
   There is nothing loathsome about calling the company you wish to invest in and asking them. They will usually send you a starting investors package with a complete step by step of where to go with your money, in regards to their future.
   If you were to drop $100 dollars into stocks in an up and coming business, buying eight shares at $10 each, giving $20 to your broker, and five years later that company gets bigger (as companies do, remember, businesses rarely tread water for long, in the raging seas of capitalism they either sink or swim) to where there shares are $50 each, you will have made a profit of $300, which you will then wisely reinvest, right?
   In the movies, investing is exciting. Drooling stockbrokers, wearing immaculate Armani suits, running around screaming with their ties around their heads like bandanas, foaming, “Sell!!! For the love of God, SELL!!!”
   That’s what’s known as hourly trading, and it’s for the dauschunds. Wise investing is done over years, patiently, investing and reinvesting what you’ve made, not wrestling other suits like some cocaine addict with a business major.
   As I have said before, it’s your money, and investing is there, waiting. The next time the love of your life wants to spend $250 on those damned beanie babies, explain to her that if you drop $250 into an off shore genetics manufacturing firm that goes public, your investitures could mature within four years, and a possible percentage increase of 300%. That’s enough cash to buy a thousand of those damn glorified bean bags. Just don’t tell her you’re going to invest it in “Sexx, Inc.” a porn movie making company out of Orange County, California, and that you’re going to spend your share on a night out at the local pub, followed by an excursion to the strip club, with you and your buddies.
   $5,000 can buy a lot of lap dances, you know…   
   
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« Reply #32 on: August 08, 2007, 10:47:39 AM »

After the scare of the other day, LNOP is recovering nicely and then some  cool   With a basis of 1.89
MVIS hit a 3x for me before backing off considerably, but now looks to be headed back up.

POT is doing nicely for me. Hat tip to Scott Grannis.

Took a position in MA per David Gordon-- who has a new post on his blog on it.
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« Reply #33 on: August 16, 2007, 01:21:43 PM »

David Gordon's comments are always worth careful consideration:

http://eutrapelia.blogspot.com/
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« Reply #34 on: August 16, 2007, 01:52:00 PM »

Another red day for most, but LNOP is up nicely.
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« Reply #35 on: August 20, 2007, 10:00:02 AM »

David Gordon comments (see previous post for URL)


17 August 2007
Back to the drawing board

I receive many messages this morning that read, in part, "Praise be the FRB! Today's discount rate cut kick starts the markets' rally..." -- which could not be farther from the truth.

Today's action by the FRB does not, by itself, cause a reversal (up), but does exacerbate the short term up trend that kicked into gear yesterday.

Please recall that traders had their signals, purchased yesterday at varying points based on each trader's objectives, and would likely purchase more shares today based upon tick by tick data. Today's news reverses the previous trend: the sellers suddenly stand aside, as the buyers crush the doors attempting to get into this (new) market trend. Its duration, however, remains to be determined.

So, to reiterate, today's FRB action merely exacerbates what was to occur anyway.
-- David M Gordon / The Deipnosophist
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« Reply #36 on: August 24, 2007, 10:48:06 PM »

LNOP up 7.3 %.

Re-entered ISIS.
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« Reply #37 on: August 26, 2007, 10:48:29 PM »

Re LNOP:

http://www.thestreet.com:80/_yahoo/newsanalysis/technicalanalysis/10376112.html
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« Reply #38 on: September 06, 2007, 07:46:15 PM »

LNOP kicking butt!!!  grin grin grin

Back in ISIS too.
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« Reply #39 on: September 11, 2007, 06:21:26 PM »

Hey crafty,

You like your LNOP? 

Another 52 week high and closing high today.  I think that the company is close to placing the remainder of its secondary.  It has already sold 900,000 shares of the secondary to one private investor with a last name of Cheney.  The stock is up 50% during this placement.

Here are some more fundamental tidbits that I have discovered since my last post here.  The newly announced NP-4 chip will be cost competitive with ASIC's.  This is huge because it opens up the opportunity to move downspeed with cheaper,slower chips in other parts of the network.  It will be usable with any company's switch fabric.  It incorporates the physical layer on to the chip and includes many functions that now require additional chips in a linecard.  Market share in the target market is about 50% higher than any assumption out there.  The initial ramp will run through 2012.  It has design wins at Lockheed Martin, Motorola and with the Israeli government.

The more I learn about this company, the better its prospects look.  Gilder may have stumbled onto another big winner like QCOM at its zenith and EQIX.

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« Reply #40 on: September 14, 2007, 08:21:47 AM »

Crafty and Rick,

LNOP's recent meteoric rise seems to be temporally related to Cramer and the Street's mention of it.  I suppose the private placement with Cheney and the Street's mention is no coincidence either. Sounds to me like it was orchestrated.

I've been burned so badly in the past listening to Gilder and drinking his koolaid I have been hesitant to get into this one though it sounds like it has the technological edge. We've learned that having the technological edge isn't always enough.

When did he say Terayon (another Israeli company) would follow Qualcomm "over the rainbow" - around 1999 or 2000.  Its price soared to well into the 200s.   What is the price now, 1 or 2 bucks?  Are the Israeli's running LNOP more attuned than the brothers who managed Terayon to oblivion?  I am not being sarcastic.  I don't know the answer to this.   But clearly we have to have not only tech brains but business brains to have any chance of a homerun.  (along with a big dose of luck)

That is the problem with these kinds of tech picks.  They can go up 1000% (like QCOM) or more frequently drop 95% (like TERN, AVNX and countless others).

I learned if nothing else whatever one invests into these crap shoots - one better be willing to risk all of the investment which should be small and reasonable.  Great technology aside these investments are only one step above venture capital investments in myHO. 

Every time my greed fires me up to "get in" and make great profits I go through the above safety valve analysis that I've learned the hard way.  This one will turn out to be a great investment - why - because I am holding off.

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« Reply #41 on: September 14, 2007, 02:46:51 PM »

I know so very well what you mean!!! tongue 

FWIW here's this from GG in today's newletter on LNOP:
============

George Gilder, Gilder Telecosm Forum (9/9/07):  People everywhere want to know. What are the limits of EZchip (LNOP)?

The Linley Group defines EZ's limits as some portion of the $700M Carrier Ethernet market, particularly the demand for metro ethernet switches. Yet the NPU performs generic functions of routing, switching and managing traffic for Internet Protocol packets and Ethernet frames, which are by no means restricted to metro slots. These functions have to be performed everywhere the Internet reaches, from entertainment rooms to Googleplex datacenters, from telco central offices to enterprise local area networks, from surveillance devices to satellite links, from automobiles to airplanes, from storage area networks to medical centers. The current carrier switches are merely the first of the markets to emerge, but they do not begin to represent the limits for EZchips.
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« Reply #42 on: September 19, 2007, 08:21:15 AM »

Took advantage of yesterday's drop due to a secondary offering to fatten my position in LNOP a bit.
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« Reply #43 on: September 19, 2007, 11:14:50 AM »

Good thing I had a tight stop on the incremental purchase of LNOP!
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« Reply #44 on: October 08, 2007, 09:06:52 AM »

Tis a rare event, but I re-entered the minor stopped out sub-position in LNOP in profitable fashion and today am quite happy.  As I type LNOP is up 5.8%-- and ISIS is having yet another fine day.
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« Reply #45 on: October 11, 2007, 08:41:48 AM »

LNOP just tripled the size of its total addressable market (TAM) with this announcement.

http://biz.yahoo.com/prnews/071011/ukth056.html?.v=3



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« Reply #46 on: October 11, 2007, 10:46:09 AM »

A HUGE run by LNOP the last several days.  I want to thank you Rick for putting me on to this.  Because of your credibility with me I went in pretty big on this and am feeling quite good.
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« Reply #47 on: October 12, 2007, 06:21:27 AM »

It will settle down now and consolidate for several weeks.  Q3 earnings will be announced around 15 November.  Expect some more action around that time.
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« Reply #48 on: October 25, 2007, 05:06:18 AM »

David Gordon is back in town and has several posts in recent days up on his blog.  His call for ISRG is up quite nicely for me!  Speaking of David, it was he who first brought my attention to the fundamentals of water as an investment hypothesis.  Here is a recent article that speaks to this theme.

==========

By JON GERTNER
Published: October 21, 2007
Scientists sometimes refer to the effect a hotter world will have on this
country's fresh water as the other water problem, because global warming
more commonly evokes the specter of rising oceans submerging our great
coastal cities. By comparison, the steady decrease in mountain snowpack -
the loss of the deep accumulation of high-altitude winter snow that melts
each spring to provide the American West with most of its water - seems to
be a more modest worry. But not all researchers agree with this ranking of
dangers. Last May, for instance, Steven Chu, a Nobel laureate and the
director of the Lawrence Berkeley National Laboratory, one of the United
States government's pre-eminent research facilities, remarked that
diminished supplies of fresh water might prove a far more serious problem
than slowly rising seas. When I met with Chu last summer in Berkeley, the
snowpack in the Sierra Nevada, which provides most of the water for Northern
California, was at its lowest level in 20 years. Chu noted that even the
most optimistic climate models for the second half of this century suggest
that 30 to 70 percent of the snowpack will disappear. "There's a two-thirds
chance there will be a disaster," Chu said, "and that's in the best
scenario."



In the Southwest this past summer, the outlook was equally sobering. A
catastrophic reduction in the flow of the Colorado River - which mostly
consists of snowmelt from the Rocky Mountains - has always served as a kind
of thought experiment for water engineers, a risk situation from the outer
edge of their practical imaginations. Some 30 million people depend on that
water. A greatly reduced river would wreak chaos in seven states: Colorado,
Utah, Wyoming, New Mexico, Arizona, Nevada and California. An almost
unfathomable legal morass might well result, with farmers suing the federal
government; cities suing cities; states suing states; Indian nations suing
state officials; and foreign nations (by treaty, Mexico has a small claim on
the river) bringing international law to bear on the United States
government. In addition, a lesser Colorado River would almost certainly lead
to a considerable amount of economic havoc, as the future water supplies for
the West's industries, agriculture and growing municipalities are
threatened. As one prominent Western water official described the possible
future to me, if some of the Southwest's largest reservoirs empty out, the
region would experience an apocalypse, "an Armageddon."

One day last June, an environmental engineer named Bradley Udall appeared
before a Senate subcommittee that was seeking to understand how severe the
country's fresh-water problems might become in an era of global warming. As
far as Washington hearings go, the testimony was an obscure affair, which
was perhaps fitting: Udall is the head of an obscure organization, the
Western Water Assessment. The bureau is located in the Boulder, Colo.,
offices of the National Oceanic and Atmospheric Administration, the
government agency that collects obscure data about the sky and seas. Still,
Udall has a name that commands some attention, at least within the Beltway.
His father was Morris Udall, the congressman and onetime presidential
candidate, and his uncle was Stewart Udall, the secretary of the interior
under Presidents John F. Kennedy and Lyndon Johnson. Bradley Udall's
great-great-grandfather, John D. Lee, moreover, was the founder of Lee's
Ferry, a flyspeck spot in northern Arizona that means nothing to most
Americans but holds near-mythic status to those who work with water for a
living. Near Lee's Ferry is where the annual flow of the Colorado River is
measured in order to divvy up its water among the seven states that depend
on it. To many politicians, economists and climatologists, there are few
things more important than what has happened at Lee's Ferry in the past,
just as there are few things more important than what will happen at Lee's
Ferry in the future.

The importance of the water there was essentially what Udall came to talk
about. A report by the National Academies on the Colorado River basin had
recently concluded that the combination of limited Colorado River water
supplies, increasing demands, warmer temperatures and the prospect of
recurrent droughts "point to a future in which the potential for conflict"
among those who use the river will be ever-present. Over the past few
decades, the driest states in the United States have become some of our
fastest-growing; meanwhile, an ongoing drought has brought the flow of the
Colorado to its lowest levels since measurements at Lee's Ferry began 85
years ago. At the Senate hearing, Udall stated that the Colorado River basin
is already two degrees warmer than it was in 1976 and that it is foolhardy
to imagine that the next 50 years will resemble the last 50. Lake Mead, the
enormous reservoir in Arizona and Nevada that supplies nearly all the water
for Las Vegas, is half-empty, and statistical models indicate that it will
never be full again. "As we move forward," Udall told his audience, "all
water-management actions based on 'normal' as defined by the 20th century
will increasingly turn out to be bad bets."

========



Page 2 of 10)



A few weeks after his testimony, I flew to Boulder to meet with Udall, and
we spent a day driving switchback roads high in the Rockies in his old
Subaru. It had been a wet season on the east slope of the Rockies, but the
farther west we went, the drier it became. Udall wanted to show me some of
the local reservoirs and water systems that were built over the past
century, so I could get a sense of their complexity as well as their
vulnerability. As he put it, he wants to connect the disparate members of
the water economy in a way that has never really been done before, so that
utility executives, scientists, environmentalists, business leaders, farmers
and politicians can begin discussing how to cope with the inevitable
shortages of fresh water. In the American West, whose huge economy and
political power derive from the ability of 20th-century engineers to conquer
rivers like the Colorado and establish a reliable water supply, the prospect
that there will be less water in the future, rather than the same amount, is
unnerving. "We have a very short period of time here to get people educated
on what this means," Udall told me as we drove through the mountains. "Then
once that occurs, perhaps we can start talking about how do we deal with
 it."

Skip to next paragraph

Udall suggested that I meet a water manager named Peter Binney, who works
for Aurora, Colo., a city - the 60th-largest in the United States - that
sprawls over an enormous swath of flat, postagricultural land south of the
Denver airport. It may be difficult for residents of the East Coast to
understand the political celebrity of some Western water managers, but in a
place like Aurora, where water, not available land, limits economic growth,
Binney has enormous responsibilities. In effect, the city's viability
depends on his wherewithal to conjure new sources of water or increase the
output of old ones. As Binney told me when we first spoke, "We have to find
a new way of meeting the needs of all this population that's turning up and
still satisfy all of our recreational and environmental demands." Aurora has
a population of 310,000 now, Binney said, but that figure is projected to
surpass 500,000 by 2035.

I asked if he had enough water for that many people. "Oh, no," he replied.
He seemed surprised that someone could even presume that he might. In fact,
he explained, his job is to figure out how to find more water in a region
where every drop is already spoken for and at a moment when there is little
possibility that any more will ever be discovered.

Binney and I got together outside Dillon, a village in the Colorado Rockies
75 miles from Aurora and just a few miles west of the Continental Divide. We
met in a small parking lot beside Dillon Reservoir, which sits at the bottom
of a bowl of snow-capped mountains. Binney, a thickset 54-year-old with dark
red hair and a fair complexion, had driven up in a large S.U.V. He still
carries a strong accent from his native New Zealand, and in conversation he
comes across as less a utility manager than a polymath with the combined
savvy of an engineer, an economist and a politician. As we moved to a picnic
table, Binney told me that we were looking at Denver's water, not Aurora's,
and that it would eventually travel 70 miles through tunnels under the
mountains to Denver's taps. He admitted that he would love to have this
water, which is pure snowmelt. To people in his job, snowmelt is the best
source of water because it requires little chemical treatment to bring it up
to federal drinking standards. But this water wasn't available. Denver got
here before him. And in Colorado, like most Western states, the rights to
water follow a bloodline back to whoever got to it first.

One way to view the history of the American West is as a series of important
moments in exploration or migration; another is to consider it, as Binney
does, in terms of its water. In the 20th century, for example, all of our
great dams and reservoirs were built - "heroic man-over-nature"
achievements, in Binney's words, that control floods, store water for
droughts, generate vast amounts of hydroelectric power and enable
agriculture to flourish in a region where the low annual rainfall otherwise
makes it difficult. And in constructing projects like the Glen Canyon Dam -
which backs up water to create Lake Powell, the vast reservoir in Arizona
and Utah that feeds Lake Mead - the builders went beyond the needs of the
moment. "They gave us about 40 to 50 years of excess capacity," Binney says.
"Now we've gotten to the end of that era." At this point, every available
gallon of the Colorado River has been appropriated by farmers, industries
and municipalities. And yet, he pointed out, the region's population is
expected to keep booming. California's Department of Finance recently
predicted that there will be 60 million Californians by midcentury, up from
36 million today. "In Colorado, we're sitting at a little under five million
people now, on our way to eight million people," Binney said. Western
settlers, who apportioned the region's water long ago, never could have
foreseen the thirst of its cities. Nor, he said, could they have anticipated
our environmental mandates to keep water "in stream" for the benefit of fish
and wildlife, as well as for rafters and kayakers

==========



Page 3 of 10)



The West's predicament, though, isn't just a matter of limited capacity,
bigger populations and environmental regulations. It's also a distributional
one. Seventy-five years ago, cities like Denver made claims on - and from
the state of Colorado received rights to - water in the mountains; those
cities in turn built reservoirs for their water. As a result, older cities
have access to more surface water (that is, water that comes from rivers and
streams) than newer cities like Aurora, which have been forced to purchase
existing water rights from farmers and mining companies. Towns that rely on
groundwater (water pumped from deep underground) face an even bigger
disadvantage. Water tables all over the United States have been dropping,
sometimes drastically, from overuse. In the Denver area, some cities that
use only groundwater will almost certainly exhaust their accessible supplies
by 2050.


The biggest issue is that agriculture consumes most of the water, as much as
90 percent of it, in a state like Colorado. "The West has gone from a
fur-trapping, to a mining, to an agricultural, to a manufacturing, to an
urban-centric economy," Binney explained. As the region evolved, however,
its water ownership for the most part did not. "There's no magical locked
box of water that we can turn to," Binney says of cities like Aurora, "so it's
going to have to come from an existing use." Because the supply of water in
the West can't really change, water managers spend their time looking for
ways to adjust its allocation in their favor.

Binney knew all this back in 2002, when he took the job in Aurora after a
long career at an engineering firm. Over the course of a century, the city
had established a reasonable water supply. About a quarter of its water is
piped in from the Colorado River basin about 70 miles away; another quarter
is taken from reservoirs in the Arkansas River basin far to the south. The
rest comes from the South Platte, a lazy, meandering river that runs north
through Aurora on its way toward Nebraska. Binney says he believes that a
city like his needs at least five years of water in storage in case of
drought; his first year there turned out to be one of the worst years for
water managers in recorded history, and the town's reservoirs dropped to 26
percent of capacity, meaning Aurora had at most nine months of reserves and
could not endure another dry spring. During the summer and fall, Binney
focused on both supply and demand. He negotiated with neighboring towns to
buy water and accelerated a program to pay local farmers to fallow their
fields so the city could lease their water rights. Meanwhile, the town asked
residents to limit their showers and had water cops enforce new rules
against lawn sprinklers. ("It's interesting how many people were watering
lawns in the middle of the night," Binney said.)

Water use in the United States varies widely by region, influenced by
climate, neighborhood density and landscaping, among other things. In the
West, Los Angelenos use about 125 gallons per person per day in their homes,
compared with 114 for Tucson residents. Binney's customers generally use
about 160 gallons per person per day. "In the depths of the drought," he
said, "we got down to about 123 gallons."

Part of the cruelty of a Western drought is that a water manager never knows
if it will last 1 year or 10. In 2002, Binney was at the earliest stages of
what has since become a nearly continuous dry spell. Though he couldn't see
that at the time, he realized Aurora faced a permanent state of emergency if
it didn't boost its water supplies. But how? One option was to try to buy
water rights in the mountains (most likely from farmers who were looking to
quit agriculture), then build a new reservoir and a long supply line to
Aurora. Obvious hurdles included environmental and political resistance, as
well as an engineering difficulty: water is heavy, far heavier than oil, and
incompressible; a system to move it long distances (especially if it
involves tunneling through mountains or pumping water over them) can cost
billions. Binney figured that without the help of the federal government,
which has largely gotten out of the Western dam-and-reservoir-building
business, Aurora would be unwise to pursue such a project. Even if the money
could be raised, building a system would take decades. Aurora needed a
solution within five years.
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Crafty_Dog
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« Reply #49 on: October 25, 2007, 05:07:57 AM »

Page 4 of 10)

Another practice, sometimes used in Europe, is to drill wells alongside a
river and pull river water up though them, using the gravel of the riverbank
as a natural filter - sort of like digging a hole in the sand near the ocean's
edge as it fills from below. Half of Aurora's water rights were on the South
Platte already; the city also pours its treated wastewater back into the
river, as do other cities in the Denver metro area. This gives the South
Platte a steady, dependable flow. Binney and the township reasoned that they
could conceivably, and legally, go some 20 or 30 miles downstream on the
South Platte, buy agricultural land near the river, install wells there and
retrieve their wastewater. Thus they could create a system whereby Aurora
would use South Platte water; send it to a treatment plant that would
discharge it back into the river; go downstream to recapture water from the
same river; then pump it back to the city for purification and further use.
The process would repeat, ad infinitum. Aurora would use its share of South
Platte water "to extinction," in the argot of water managers. A drop of the
South Platte used by an Aurora resident would find its way back to the city's
taps as a half-drop in 45 to 60 days, a quarter-drop 45 to 60 days after
that and so on. For every drop the town used from the South Platte, over
time it would almost - as all the fractional drops added up - get another.


Many towns have a supply that includes previously treated water. The water
from the Mississippi River, for instance, is reused many times by
municipalities as it flows southward. But as far as Binney knew, no
municipality in the United States had built the kind of closed loop that
Aurora envisioned. Water from wells in the South Platte would taste
different, because of its mineral and organic content, so Binney's engineers
would have to make it mimic mountain snowmelt. More delicate challenges
involved selling local taxpayers on authorizing a project, marketed to them
as "Prairie Waters," that would capitalize on their own wastewater. The
system, which meant building a 34-mile-long pipeline from the downstream
South Platte riverbanks to a treatment facility in Aurora, would cost
three-quarters of a billion dollars, making it one of the most expensive
municipal infrastructure projects in the country.

When Binney and I chatted at the reservoir outside Dillon, he had already
finished discussions with Moody's and Fitch, the bond-rating agencies whose
evaluations would help the town finance the project. Groundbreaking, which
would be the next occasion we would see each other, was still a month away.
"What we're doing now is trading high levels of treatment and purification
for building tunnels and chasing whatever remaining snowmelt there is in the
hills, which I think isn't a wise investment for the city," he told me. "I
would expect that what we're going to do is the blueprint for a lot of
cities in California, Arizona, Nevada - even the Carolinas and the Gulf
states. They're all going to be doing this in the future."

Water managers in the West tend to think in terms of "acre-feet." One
acre-foot, equal to about 326,000 gallons, is enough to serve two typical
Colorado families for one year. When measurements of the Colorado River
began near Lee's Ferry in the early 1920s, the region happened to be in the
midst of an extremely wet series of years, and the river was famously
misjudged to have an average flow of 17 million acre-feet per year - when in
fact its average flow would often prove to be significantly less. Part of
the legacy of that misjudgment is that the seven states that divided the
water in the 1920s entered into a legal partnership that created unrealistic
expectations about the river's capacity. But there is another, lesser-known
legacy too. As the 20th century progressed, many water managers came to
believe that the 1950s, which included the most severe drought years since
measurement of the river began, were the marker for a worst-case situation.

===========
Page 5 of 10)

But recent studies of tree rings, in which academics drill core samples from
the oldest Ponderosa pines or Douglas firs they can find in order to
determine moisture levels hundreds of years ago, indicate that the dry times
of the 1950s were mild and brief compared with other historical droughts.
The latest research effort, published in the journal Geophysical Research
Letters in late May, identified the existence of an epochal Southwestern
megadrought that, if it recurred, would prove calamitous.

When Binney and I met at Dillon Reservoir, he brought graphs of Colorado
River flows that go back nearly a thousand years. "There was this one in the
1150s," he said, tracing a jagged line downward with his finger. "They think
that's when the Anasazi Indians were forced out. We see drought cycles here
that can go up to 60 years of below-average precipitation." What that would
mean today, he said, is that states would have to make a sudden choice
between agriculture and people, which would lead to bruising political
debates and an unavoidable blow to the former. Binney says that as much as
he believes that some farmers' water is ultimately destined for the cities
anyway, a big jolt like this would be tragic. "You hope you never get to
that point," he told me, "where you force those kinds of discussions,
because they will change for hundreds of years the way that people live in
the Western U.S. If you have to switch off agriculture, it's not like you
can get back into it readily. It took decades for the agricultural industry
to establish itself. It may never come back."
An even darker possibility is that a Western drought caused by climatic
variation and a drought caused by global warming could arrive at the same
time. Or perhaps they already have. This coming spring, the United Nations'
Intergovernmental Panel on Climate Change will issue a report identifying
areas of the world most at risk of droughts and floods as the earth warms.
Fresh-water shortages are already a global concern, especially in China,
India and Africa. But the I.P.C.C., which along with Al Gore received the
2007 Nobel Peace Prize earlier this month for its work on global-warming
issues, will note that many problem zones are located within the United
States, including California (where the Sierra Nevada snowpack is
threatened) and the Colorado River basin. These assessments follow on the
heels of a number of recent studies that analyze mountain snowpack and
future Colorado River flows. Almost without exception, recent climate models
envision reductions that range from the modest to the catastrophic by the
second half of this century. One study in particular, by Martin Hoerling and
Jon Eischeid, suggests the region is already "past peak water," a milestone
that means the river's water supply will now forever trend downward.

Climatologists seem to agree that global warming means the earth will, on
average, get wetter. According to Richard Seager, a scientist at Columbia
University's Lamont Doherty Earth Observatory who published a study on the
Southwest last spring, more rain and snow will fall in those regions closer
to the poles and more precipitation is likely to fall during sporadic,
intense storms rather than from smaller, more frequent storms. But many
subtropical regions closer to the equator will dry out. The models analyzed
by Seager, which focus on regional climate rather than Colorado River flows,
show that the Southwest will ultimately be subject to significant
atmospheric and weather alterations. More alarming, perhaps, is that the
models do not only concern the coming decades; they also address the
present. "You know, it's like, O.K., there's trouble in the future, but how
near in the future does it set in?" he told me. "In this case, it appears
that it's happening right now." When I asked if the drought in his models
would be permanent, he pondered the question for a moment, then replied:
"You can't call it a drought anymore, because it's going over to a drier
climate. No one says the Sahara is in drought."

Climate models tend to be more accurate at predicting temperature than
precipitation. Still, it's hard to avoid the conclusion that "something is
happening," as Peter Binney gently puts it. Everyone I spoke with in the
West has noticed - less snow, earlier spring melts, warmer nights. Los
Angeles this year went 150 days without a measurable rainfall. One afternoon
in Boulder, I spent some time with Roger Pulwarty, a highly regarded
climatologist at the National Oceanic and Atmospheric Administration.
Pulwarty, who has spent the past few years assessing adaptive solutions to a
long drought, has a light sense of humor and an air of optimism about him,
but he acknowledged that the big picture is worrisome. Even if the
precipitation in the West does not decrease, higher temperatures by
themselves create huge complications. Snowmelt runoff decreases. The immense
reservoirs lose far more water to evaporation. Meanwhile, demand increases
because crops are thirstier. Yet importing water from other river basins
becomes more difficult, because those basins may face shortages, too.

=========
Page 6 of 10)

"You don't need to know all the numbers of the future exactly," Pulwarty
told me over lunch in a local Vietnamese restaurant. "You just need to know
that we're drying. And so the argument over whether it's 15 percent drier or
20 percent drier? It's irrelevant. Because in the long run, that decrease,
accumulated over time, is going to dry out the system." Pulwarty asked if I
knew the projections for what it would take to refill Lake Powell, which is
at about 50 percent of capacity. Twenty years of average flow on the
Colorado River, he told me. "Good luck," he said. "Even in normal conditions
we don't get 20 years of average flow. People are calling for more storage
on the system, but if you can't fill the reservoirs you have, I don't know
how more storage, or more dams, is going to help you. One has to ask if the
normal strategies that we have are actually viable anymore."


Pulwarty is convinced that the economic impacts could be profound. The worst
outcome, he suggested, would be mass migrations out of the region, along
with bitter interstate court battles over the dwindling water supplies. But
well before that, if too much water is siphoned from agriculture, farm towns
and ranch towns will wither. Meanwhile, Colorado's largest industry,
tourism, might collapse if river flows became a trickle during summertime.
Already, warmer temperatures have brought on an outbreak of pine beetles
that are destroying pine forests; Pulwarty wonders how many tourists will
want to visit a state full of dead trees. "A crisis is an interesting
 thing," he said. In his view, a crisis is a point in a story, a moment in a
narrative, that presents an opportunity for characters to think their way
through a problem. A catastrophe, on the other hand, is something different:
it is one of several possible outcomes that follow from a crisis. "We're at
the point of crisis on the Colorado," Pulwarty concluded. "And it's at this
point that we decide, O.K., which way are we going to go?"

It is all but imposible to look into the future of the Western states
without calling on Pat Mulroy, the head of the Southern Nevada Water
Authority. Mulroy has no real counterpart on the East Coast; her nearest
analog might be Robert Moses, the notorious New York City planner who built
massive infrastructure projects and who almost always found a way around
institutional obstructions and financing constraints. She is arguably the
most influential and outspoken water manager in the country - a "woman
without fear," as Pulwarty describes her. Pulwarty and Peter Binney respect
her willingness to challenge historical water-sharing agreements that, in
Mulroy's view, no longer suit the modern West (meaning they don't suit Las
Vegas). According to Binney, however, Nevada's scant resources give Mulroy
little choice. She has to keep her city from drying out. That makes hers the
most difficult job in the water business, he told me.

Las Vegas is almost certainly more vulnerable to water shortages than any
metro area in the country. Partly that's a result of the city's explosive
growth. But the state of Nevada has the historical misfortune of receiving a
smaller share of Colorado River water (300,000 acre-feet annually) than the
other six states with which it signed a water-sharing compact in the 1920s.
That modest share, stored in Lake Mead along with water destined for
Southern California, Arizona and northern Mexico, now means everything to
Las Vegas. I traveled to Lake Mead on a 99-degree day last June. The narrow,
110-mile-long lake, which at full capacity holds 28 million acre-feet of
water (making it the largest reservoir in the United States), was at 49
percent of capacity. When riding into the valley and glimpsing it from
afar - an astonishing slash of blue in the desert - my guide for the day,
Bronson Mack of the Southern Nevada Water Authority, remarked that he had
never seen it so low. The white bathtub ring on the sides of the canyon that
marks the level of full capacity was visible about 100 feet above the water.
"I have a photograph of my mother on her honeymoon, standing in front of the
lake," Mack, a Las Vegas native, said. That was in 1970. "It was almost that
low, but not quite."

Over the past year, it has become conceivable that the lake could eventually
drop below the level of the water authority's intake pipes, the straws that
suck the water out for the Las Vegas Valley. The authority recently hired an
engineering firm to drill through several miles of rock and create a deeper
intake pipe near the bottom of the lake. To say the project is being
fast-tracked is an understatement. The day after visiting Lake Mead, I met
with Mulroy in her Las Vegas office. "We have everything in line to get it
running by 2012," she said of the new intake. But she added that she is
looking to cut as much time off construction as possible. Building the new
intake is a race against the clock, or rather a race against a lake that
keeps going down, down, down.
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