Monkey comes to bury Kevin’s optimism, not to praise it.
Because, Monkey, too, has been exceptionally susceptible to increasing his stake in INFN based on the optimistic detailed sleuthing we’ve been blessed to read, how’s this for an antidote:
Infinera started with blazing technology that was way better than the other guy’s. Back in the day, it was TMFHumbleServant who told us all about how terrific it was, and how great the razor blade model was for increasing margins down the road.
That was the story. The reality is that in 2010, the INFN stock reached a high of $12.83. Six years later, we’ve got an underwhelming 13.5% increase to $14.69. Six years is no chump-change, time-wise, no matter what kind of creature you are. Lots of lost bananas if you bought and held.
The reason, allow Monkey to pipe up about, is that in the technology world, there are so many complex and multiple variables, that best does not mean most revenue. Unfair? Stupid? Obstinate? Boorish? Yes. But that’s the reality of fancy-pants tech industries.
So: it appears that Infinera are the gold standard in the expanding bandwith market. But we don’t really care about that, do we? We care about the stock price because only the stock price can get you some golden bananas; we can’t eat us no bandwith.
So to temper the enthusiam for INFN, just remember that for six years, Infinera is losing to the market by a lot. Is it possible we’ll need another six years for the price to pop? Nothing’s impossible.
Sorry for the bucket of cold ice.
What sez you, Kevin? What’s so different about now? And recall that five years ago the enthusiasm about Infinera was just as palpable as it is now. But that enthusiasm ended up theoretical and didn’t translate.
Obviously this is polemical and bearish. And not that Monkey believes his own post either. But it’s a perspective y’all big-brains should keep in ya’ noggins, too, alongside all the wild enthusiasm. Maybe that’ll help some folks keep their INFN positions under 100%.
Long INFN since the dinosaur age and so with first-head experience about how frustrating “this time it’s different because X, Y, Z” can be.