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How
did we get here?
To
begin let me be absolutely clear; we only choose the
best Nuggets for our Core Holding from a selection
criterion that are not at all easy to match. The company
must be a leader in its industry and have a minimum
score of 64 out of a possible 100. We prefer a score
of 80 or above.
The companies
that become successful Nuggets have many of the following
qualities:
- New
Inventions, in other words Intellectual Properties
(IP) and great products or services
-
A long product life (preferably not a fad)
-
A Gross Profit Margin (GPM) of 64% or more
(Closer to 90% is preferred)
-
Sufficient assets to weather the startup period
-
Reinvest into Research & Development (R&D)
and grow shareholder value
-
Low Debt or, best of all, No Debt
-
Grow
the company with current resources whenever possible
-
A Business culture that rewards its employees
for innovation at all levels
-
Employee ownership in the company through incentives
with stock grants; this means that the owners
work smarter and harder
-
Open and honest communication with the shareholders,
who are us, the owners
In January of 1992 “The 80 10 and 10 System”
was in its infancy, not well documented or proven
with little success. Microsoft became the first Core
Holding in May 1992. A 3 for 2 stock split was announced
for June 15, 1992. Yes, 80% of the portfolio was invested
in Microsoft. At that point in time we did not trade
with the DPO (Detrended Price Oscillator) we merely
held the stock until May, 1998.
We began to trade Microsoft with the DPO and made
greater profits by staying out of the down trends
it became clear that a simple, yet effective indicator
enhanced our profits.
It was a sad day when our government, the Federal
Trade Commission (FTC), sued Microsoft to curb their
so-called monopoly powers. Microsoft settled with
the FTC on 11/12/2002 to appease the government and
some shortsighted shareholders and started paying
“Dividends”. The last stock split occurred
on February 19, 2003. We sold Microsoft in February
2003 at $28.52, since they started to pay a Dividend.
For us the end of Microsoft’s growth, as we
knew it, seemed to be assured. Sad but true.
Why
Rambus?
We had Rambus
as a Nugget since November 1999, and followed its
progress until we made Rambus our Core Holding in
February 2003. The innovations of the company were
so radical and profound that in time all Computers,
TV’s and most other Electronic devices would
be using Rambus Patents.
Then the good old FTC steps in and joins the biggest
chip makers in the world the likes of Micron Technology,
Samsung, Hyundai (now Hynix), Siemens (now Infinion
and Qimoda) and Nanya, in lawsuits against Rambus.
On March 26th 2008 after almost 8 years Rambus won
three lawsuits and is now on its way to collect perhaps
$ BILLIONS in past Royalties.
The future looks great for Rambus now, since these
giant chip companies could not KILL Rambus and it
looks like the FTC is out of the picture. Our share
price target for Rambus is over $170 a share within
a year.
Rambus our Core Holding is traded using the DPO (Detrended
Price Oscillator) with an original amount of $10,000
beginning February 14th, 2003.
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