Unfortunately the AAOI thread is now 40 posts long with a large proportion of the posts full of personal animosity. Let’s drop it, and get back to our lives and to investing.
Thanks,
Saul
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Thanks Andy & Jon,
That’s just what we needed.
I think there’s money to be made here by someone, but not me. I still think the revenue here will be volatile on a scale unfamiliar to most investors, and that is most likely also tied to the high short ratio. AAOI obviously has a nice backlog of orders and foresee a good year coming up (already half-baked into the price, it appears) but beyond that, I suspect lies a large amount of uncertainty.
My other concern so far unmentioned, is that I think the fittings, parts and equipment supplied by AAOI for any sizeable data center, while totaling a sizeable sum in dollars, is a very small portion of the total cost of building a data center. It seems it would take a huge project list, spaced somewhat uniformly, for any meaningful degree of sustainability. Since technological change is moving at an increasing pace, that degree of harmony is most unlikely, prompting periods of boom & bust in this industry and requiring astute investors well versed in the field to have a good chance of worthwhile profits, and for most investors the risk/reward ratio is much too high.
Thanks so much for sharing.
Dan
6 Likes
Hi Dan
My other concern so far unmentioned, is that I think the fittings, parts and equipment supplied by AAOI for any sizeable data center, while totaling a sizeable sum in dollars, is a very small portion of the total cost of building a data center. It seems it would take a huge project list, spaced somewhat uniformly, for any meaningful degree of sustainability. Since technological change is moving at an increasing pace, that degree of harmony is most unlikely, prompting periods of boom & bust in this industry and requiring astute investors well versed in the field to have a good chance of worthwhile profits, and for most investors the risk/reward ratio is much too high.
Thanks so much for sharing.
Dan
I think you are correct on this and is one of the reasons I want to make sure any company I am invested in this space is also able to sell into China. While it will be volatile that should help.
Happy Investing.
Andy
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What I need now is information for NOT buying the stock.
right on.
I look for rapid sales and sometimes earnings and outperformance of the base index SP500. And especially for broken processes and a field and TAM that is rapidly expanding. Not Denny’s method, and rather less precise.
So the key (though I sometimes don’t look close enough) is which ones not to buy.
If it fits the above and is not a dot com type of company it will be underpriced except at very tops of markets. Because exponential compounded growth does not fit the analytical backward looking skill sets of most Wall street analysts.
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If it fits the above and is not a dot com type of company it will be underpriced except at very tops of markets. Because exponential compounded growth does not fit the analytical backward looking skill sets of most Wall street analysts.
Well said!
Denny Schlesinger
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Just to set the record straight, I’ve been studying the company more and decided yesterday to jump in with a full position even though it’s gone up a bunch already. (Lucky timing for me as it jumped 7% today.) It’s not a buy and hold-type stock IMHO, so I consider it extremely cyclical and plan to watch it closely.
Thanks again everyone for your input.
Dan
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