Possibly Profitable Patience

Pardon me an old man moment. Kids, slow down! Oy! OK, back to the show. Patience is useful, a hard task for some, and changes with time and age. It is also possibly profitable. 

Yep, another stock post with some real estate included, which also means writing about MVIS because it has become my long term example.  

Sometime in April, #MicroVision is expected to announce good news about their LiDAR product. For $MVIS shareholders, browse back through the blog for details. When MicroVision announced that they would announce the product the stock jumped. For months (years?) management has talked about possible buyouts. Another reason for the price to rise. Recently, Microsoft (not MicroVision) announced an initial order of ~$22B for their new Hololens/IVAS (augmented reality) headset. Another reason for optimism. Up, up, up. From ~$0.15 in early 2020 to $23.72 in February 2021 (irrational exuberance?) to $18.55 at the end of March 2021 to, to, to, – down down down since the beginning of April 2021, to $11.03 April 16, 2021. 

Google Finance
Google Finance
Google Finance

Where’s the news? Where’s the news? We want the news! Oh no, maybe there’s no news. What if there’s no news? Why won’t they say anything? 

Many new MVIS investors have been Long, i.e. holding the stock without selling, since the last few months. For someone new to investing, such a lack of information can be worrisome and exhausting. 

I am one of the reasonably Long Long investors. Others exceed my twenty years of holding. Throughout MicroVision’s history the cycle of lack of progress, tons of guessing, scraps of good news, excuses about competition sensitivity and NDAs, and – be told to expect good news within a few months, or several months, or at most a few years. 

This time looks different, though.

That’s a test of patience, and with no guarantee of success. Ironically, in modern American finance, waiting decades isn’t rewarded directly. The benefit comes from seeing an opportunity and getting involved before the crowd rushes in. Waiting rarely takes decades because most companies can’t last that long. Most investors can’t wait that long, either. But, the shareholders that buy the day before the big news or the big news are the ones who can make the most money in the least time. The risk is that the stock can rise faster than a buyer can act. 

Unfortunately, it is usually difficult to predict that timing so investors/speculators like me buy in early when the company is small and sell after the crowd arrives. Buying early can mean putting up with people laughing at you. Successful selling can mean suddenly people laughing and celebrating with you. It all worked in my favor for the laughter at: a company that will sell coffee, a company that will use computers to make movies, and a company that had the silly notion that people might want to visit the internet. Thank you, SBUX, PIXR, and AMER/AOL. But it can also mean a long wait for a lack of results from an online bookstore that didn’t understand online, a solar power company that almost hung in long enough, and a satellite communications network that understood technology but didn’t understand debt. Barnes & Noble, Real Goods Solar, and Iridium had good ideas but were either too early, not adaptable enough, or underappreciated the debt required to be a first mover in a new industry. (Additional details in my book: Dream. Invest. Live.)

Fortunately, a stock can only go down 100%, but can rise tens of thousands of percents. 

(Triple Whammies happen, though. Update scheduled for August.)

Long term investing can be simple and easy. Buy. Wait. Check on occasion. Sell at the right time, either to get out before the bottom or as it approaches more positive goals. The waiting, however, seems simple until the waiting begins to exceed the available patience.

Patience is personal. How long is a person willing to wait for anything? I look forward to getting back to running (marathons), bicycling (coast to coast), hiking (across Scotland and throughout Washington’s mountains), and such. I’m a writer and a photographer, usually of twelve month projects. I’d rather transplant from something already growing on my property and wait a few years than buy from the nursery and rush home to plant it. If I had a larger lot without rules about tree heights I’d plant a lot more trees, and wait. Evidently I think long-term.

For years, house prices were depressing. Now that I’m a real estate broker (required disclosure: I am a broker with Dalton Realty, Inc. on Whidbey Island http://whidbeyrealtor.com/) friends are asking me about how much their house might be worth, and are then surprised and sometimes disbelieving that their house is worth more than they thought – and all they did was nothing but wait. Accidental patience; benefits that sometime happen by simply not acting impulsively. 

Trends don’t go on forever – unless you’ve reached galactic escape velocity (~550km/s) and nothing gets in your way. Real estate inventories can’t go below zero. Prices can’t climb forever. Startup companies eventually either run out of financing or succeed or get bought out.

Guessing at trends from a few percent of the life or history of something can benefit from a longer view and a deeper appreciation of the core value. Is the value of a company or of a house greatly different from today to tomorrow? The price can change frequently throughout a day, but the value reacts more slowly. Usually, a house gets a day older every day; but except for emergencies, most homeowners can wait months or years to counter the aging. A company can seem to change dramatically every day because the stock price changes so often, but the core value changes more gradually – even if the stock doesn’t move. A successful order is progress, but the steps that led to the order inherently had value. An invention gains value as it proceeds from idea to research to development to patent to prototype to product to profit. Those steps are usually too subtle and sometimes secret, so their contribution to value to the company isn’t represented in the stock price; but are more noticeable with patience. 

As I wrote above; “Where’s the news? Where’s the news? We want the news! Oh no, maybe there’s no news. What if there’s no news? Why won’t they say anything?” Without the news, worries arise. Over promise and under deliver has become the expectation for MicroVision. But also as I wrote above; “This time looks different, though.”

Stocks bounce around, hopefully upward. Houses hopefully fight aging sufficiently to become more valuable objectively and subjectively. With those and many other aspects of a long-term goal, a long life, one of the key skills is patient. Now, pardon me as I check Twitter to see if MicroVision announced anything after the close of the business day. I mean, come on, I’ve been waiting years and they could announce good news any time now. Now, please?

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Waiting – April 2021

Oh, to dance, again. It’s been a long wait. And that’s not the only thing I’ve been waiting for. Weeks, years, decades of waiting should be resolved within the next two months. Potentially, all of it is good news. But in the meantime, waiting is required. Waiting isn’t much fun. Dreaming is.

Spring! Spring happened already, so the calendar says. The yellows of skunk cabbage and daffodils are fading but the fields of tulips are blooming. (Dressing The Spring Equinox In Yellow) Ah. But, in the meantime, a spring storm is arriving with a bit of winter. Snow is forecast, but no accumulation is expected. Sure, but no storm was expected, either. The good news is that my neighborhood’s forecast is also for a wave of warmth to finally arrive next week. Patience, lad.

National Weather Service

MicroVision! Got to mention MicroVision. I’d be hiding a major event if I didn’t mention it. By the end of April, the company is supposed to make a significant delivery of an innovative component that enables driver-less cars and such. The guess is that by the end of May or June the company will announce a buyout, or a partnership, or a major order, or a combination of any of those because they’re also busy in other innovations. The stock (MVIS) is up over 6,000% from last year, with many enthusiasts expecting to rise much higher. In the meantime, my investment is worth a couple of years of emergency frugal living expenses, but within a few months it could put me much closer to re-retirement if those enthusiasts are right.

Business! For places like Whidbey Island, the tourism season begins. Shops reopen, restaurants fill, jobs are posted, vacation homes are rented. Sorta. The pandemic hasn’t moved out, yet. Masks, responsible people, and vaccines are making impressive progress. Maybe that’s reflective of the county’s status as a generally healthy place. (Island County ranks 4th healthiest in state) Today, places may open with caution. Within months maybe they’ll open with fewer restrictions and viable revenues.

Business! For real estate brokers on the island, spring is usually the time when inventory rises (Yay for supply!) at the same time that people decide to move here or at least get a second (or third or fourth or …) home here (Yay for demand!). At least half of that is happening. Worldwide buyers are busy shopping; but for many reasons sellers aren’t selling. (Whidbey Real Estate During Covid19 – April 4, 2021, – WA required disclosure, I’m a broker at Dalton Realty, Inc. http://whidbeyrealtor.com/) Sometimes such markets turn around with a note from the Fed, or a whim, or a fad, or enough pent up frustration and demand to make something happen. In the meantime, I get to keep busy (while waiting for enough transactions to close so I can go on vacation, too.)

Second Dose! It’s coming. It’s soon. Within a few days I get my second dose (Pfizer). For a few days after that I will have time blocked out just in case there are significant side effects. (That first dose was an multi-day event. Ouch.) Hopefully within a couple of weeks I’ll be dosed up and ready to feel more confident about re-engaging in the world.

Post Dose! Come on, life. There’s dancing to do. (I hope I remember how.) Before that happens there will be an epic haircut. (I’ve been letting it get to college length; but the bald patch isn’t participating so a dramatic enforced shedding will occur. Oops. Tried to take a photo and it didn’t quite come out right. Oh, shucks. 🙂 ) At the same time it has become apparent that the transition back to being social beings again may be tougher than expected. Months of semi-quarantine have been tough on many people. Mental health officials have been warning about that. Now, as people begin to re-socialize it is also becoming apparent that months of avoiding contact, avoiding anti-maskers and anti-vaxxers, those new temporary habits are turning out to be tougher to reverse. Hopefully a few, mask-less smiles, hugs, visits to restaurants and bars, and a party or two will help heal and retrain responsibly sequestered souls.

Eventually. A few days, a few weeks, a few months. Compare ten years ago to two years ago to a year ago to a few months ago and be impressed with the changes we’re witnessed, adapted to, and reacted to. What’s next? I have guesses. The best news is that the changes I see before me are finally something to look forward to.

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MicroVision MVIS Valuation Shift

As I’ve told others on social media and discussion boards;

“I didn’t expect to have to update my MVIS model so soon. In it I played with (and it really isn’t much more analytical than ‘play’);…” (Valuing MVIS Looking Back And Forward)

These have certainly been dynamic times for one of my stocks: MVIS. Of course, that’s because these might just be dynamic times for that stock’s company: MicroVision. Notice the word ‘might’.

I’ve mentioned the company and the stock often throughout this blog’s history (#MicroVision, $MVIS). (Too often for some who want to read more about personal finance, frugality, community, sustainability, etc.) Until about a year ago the stock posts were in the far minority, but then things started happening. Lately, ‘things happening’ has become a weekly event. April through June may be busier than that. 

Within about thirty minutes at the end of the trading day on March 31, MVIS went up over 50%. There are many predictive models for stock movements, but picking out the right thirty minutes of one day from twenty years ago is Ouija Board territory.

“Microsoft wins U.S. Army contract for augmented reality headsets, worth up to $21.9 billion over 10 years” – CNBC

To recent shareholders, much of the attention was directed to the progress  in LiDAR, the component considered necessary for autonomous vehicles. Driverless cars still need to pay attention to the road.

Prior to that, much of the attention was directed to progress in Hololens. One intrepid shareholder’s video of disassembling Microsoft’s new augmented reality rig showed MicroVision was part of the product – time three. Three MicroVision components per unit, at least in that version.

About a year ago, the stock hit a low of $0.15, at which point the attention was drawn to the prospect of some company buying MicroVision (maybe for as much as $5!) Wither Or Whether MVIS

Longer term shareholders are more likely to be aware of much more: smartphones with embedded projectors, display-enabled smart assistants like Alexa, home theater units, LiDAR for the home and for factories and vehicles, augmented vision eyewear, interactive displays, and enough more that I can’t remember them all. (Others can recite the entire list, I am sure.)

The news that moved MVIS was news for Microsoft that didn’t mention MicroVision. That’s no surprise. Any bit of significant electronics can contain dozens of subcomponents. A company like Microsoft will spend their time selling the product, not listing suppliers. The Microsoft product is the military version of the Hololens product (IVAS) mentioned in that breakdown video. Does the current version of Hololens include MicroVision? Probably. If MicroVision is involved in Hololens does that mean MicroVision is also a supplier for IVAS? Probably. The news was expected. The details weren’t. 

CNBC

There’s always someone out there who guessed right, but most of the discussion was for at most about $2B for Hololens/IVAS. The Microsoft announcement was for over $20B. Surprise. Ah, but that was for the next ten years. Divide $20B by 10 and get $2B. Still welcome. But bump that up again because that announcement was for the US Army getting 120,000 units. IF MicroVision is inside, that’s 360,000 subcomponents. Bump it up again because there are also possible sales to the rest of the US Armed Forces, and then there are allies, and then…? So, the top end increases significantly. That can explain a 50% stock price jump in thirty minutes for a company valued at less than $0.1B last year.

But, here’s one element of risk. MicroVision is well-known for remaining quiet about details of contracts. Whether that’s competition sensitivity, NDAs, or reticent management is difficult to tell. Microsoft mentioned a customer (the US Army), a quantity (120,000 units), a value (~$20B), and a time-frame (10 years). Microvision said – – – – – nothing. Without confirmation from either corporation, verification hasn’t been made. As for the most recent version of Hololens, we can’t expect that stockholder to spend yet more thousands of dollars to continue opening up functional hardware. As for IVAS, I suspect the US Federal Government would do much more than be upset if a shareholder dismantled an IVAS unit. So, without MicroVision management making an announcement I’ll continue to be aware of the risk – while appreciating the stock appreciation.

That risk may be why, after a 50% rise one day, the next day MVIS was down 16%. Progress, but not a direct ascent to the heavens.

Google Finance

Such events are also why I prefer my investing approach of Long Time Buy and Hold. (See my book, Dream. Invest. Live. for details.) My patience has been strained and drained over twenty years, but if you want to get an idea of how quickly news and stocks can happen watch the daily livestream from an enthusiastic shareholder who had to step away to go the bathroom about the time the news happened.

And then there’s April.

As I said above, April is anticipated because the new more-communicative MicroVision management announced several weeks ago that the LiDAR component will be available for customer testing and integration (at least) sometime in April. That news bumped the stock back then. (Dynamic MicroVision And MVIS) That was just the news of anticipated news. April should include the announcement of the delivery. I didn’t expect any company to announce news on April Fools Day, so the news could happen as early as April 2, as late as April 31, could be delayed, or could be, could be. Considering the IVAS surprise, the LiDAR surprise could be just as dramatic.

And then there’s June-ish.

Management comments suggest (forward-looking statements and all) that the buyout negotiations continue, possibly being concluded on or about June. Of course if MVIS has climbed sufficiently is it only purchased in bits? As I’ve written before, I feel sorry for the folks on the other side of the negotiating table. 

Let’s go back to that play model I referred to at the start. Two weeks ago I posted “Valuing MVIS Looking Back And Forward“, which has become the most popular posts on this blog. 

I’ll keep the basics to same to minimize my confusion. I hope that helps, you, too.

LiDAR sold off to Apple or Ford or…,

Augmented Vision developed in partnership with Microsoft 

Stand alone displays, interactive displays, et al remains with MicroVision.” 

Now (many assumptions are included explicitly and implicitly and accidentally). Hmm. As I consider this, the total value doesn’t change much except for the Augmented Vision component.

If MicroVision is inside Hololens and IVAS, then the value of the parent company has fundamentally increased, but I’ll assume profit margins remain the same for conservatism.

Near term (within three years) revenues are guessed at ~$0.2B.

Looks higher now. That $0.2B is one tenth of one tenth of Microsoft’s revenue, not profit, from the IVAS/Army contract. I’ll raise that a bit to account for Hololens + IVAS/Army + IVAS/others. Let’s say $0.4B for near term potential. Use my regular Price/Sales ~6 suggests ~ $2.4B for the value of near-term future revenues translated to a stock value. 

That adds $1.2B to my rickety wobbly valuation model from $10.2B to $11.4B, and a price for MVIS of $76. MVIS was at $0.15, is at about $15, which puts the valuation at just over 5X the current price. Well, $15 looked silly when staring at $0.15. One hundred times that can make one think another factor of five is silly, too; but without knowing more, I have to work with what I have. (And have the time to research and analyze.)

Personally, if I didn’t sell at $0.15 (a time of very little news), then why would I sell at $15 (a time of greater potential) when there is real, positive, significant news supposedly near?

Or, Murphy strikes again, Lucy pulls the football away from Charlie Brown, Wylie E. Coyote realizes that tunnel is really just something painted by the Roadrunner. 

And, in the midst of all of this, one of my other companies and stocks (NeoPhotonics/NPTN, market cap ~ $0.65B) may be a buyout target from a firm (Lumentum/LITE, market cap ~ $7B) that cancelled a buyout of another firm (Coherent/COHR, market cap ~ $6.3B). 

Not a dull year. Great potential. Ah, but not enough to feed my checking account – yet.

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Personal Finance Is Personal

Personal finance is personal. Yes, that’s the title; but since I wrote my own book on my own personal finances (Dream. Invest. Live.) the simplicity of that observation has become more apparent – even after twelve years.

Finance is impersonal, in the ideal. Assets, liabilities, income, expenses all define the majority of finances for people, businesses, organizations, and governments. Arithmetic required, but not necessarily mathematics beyond multiplication and division. Get fancy with things like compound interest which involves understanding how to take a number to the power of another number, and find quicker ways to calculate mortgages, debt payments, and the returns on investments. Or, let a spreadsheet do that work for you.

As I’ve ridden a roller coaster through America’s wealth classes I’ve received advice when I was rich, poor, and muddling by that almost always referenced the bare truth of those objectively correct numbers and mathematical realities. But, there are other realities.

Humans are not automatons. Society does not treat everyone equally. Opportunities are not evenly distributed. Success breeds success. It takes money to make money, and the defining aspect of the poor is that they don’t have enough money. Advice that sounds rational and sound to some sounds silly, impersonal, insensitive, and clueless to others. I’ve learned to affix a long acronym to almost any financial advice I find: ALAYCPYB.

As
Long
As
You
Can
Pay
Your
Bills

When you can’t pay your bills, the idea of putting something away for a rainy day is ridiculous because you might already be in a gentle drizzle or out in a deluge without a hat or a home. Working harder makes little sense if you’re already working seven days a week at several jobs, gigs, or endeavors. Go back to school, or move to a better place, or invest in yourself, or get a better job are great ideas but useless ideas without the surplus cash or time to get a better job.

I know too many people who’ve tried to access government assistance but who were denied because they or their businesses hadn’t enough history of making enough money to qualify.

I suspect I’ve lost many readers this far in because that reality is uncomfortable and a challenge to conventional wisdom. It is 2021. Conventional wisdom was established before trickle-down economics were introduced, about forty years ago. This is no longer 1981. Much of that wisdom remains valid, but seemingly only for those from whom finances are supposed to trickle down from, not trickle down to. The world is changing.

Despite those difficulties, there’s a truth that is appropriate for almost anyone who is having to manage their finances. Here’s the echo: Personal Finance is Personal.

It is possible to dispassionately manage personal finances, but most people aren’t purely objective. We are a subjective species. Even Vulcans had emotions, they just repressed them.

If we were purely objective about personal finances, we’d all be frugal, only purchase and produce necessities, would invest purely based on things like return on investment, exercise every tax minimization method, and always have balanced checkbooks.

But. We do more than invest; we dream and live. We buy luxuries, which can be necessities to maintain mental health. Some of my best investments have been little luxuries like coffee (Starbucks) and movies (Pixar) that managed to make billions of dollars a few dollars at a time. Investments can embody personal values. Do you want to invest in industries like fossil fuels, the military, plastics, or exploitative cheap consumer goods? They can have a good return on investment. There’s also triple bottom line companies that measure success by more than profit and stock price, or companies in renewable energies, healthier food production, socially responsible labor and supply chain companies, or one of my favorite approaches – positive disruptive technologies that may replace inefficient anachronisms.

Personal finance is personal because personal values are personal. Even people within restrictive societies will be unlikely to have identical values. Even within the same list of values, two people can emphasize different values.

Respecting the reality of personal values can make it much easier to approach personal finance. For those fortunate enough to be able to pay their bills and have excess with which to invest, it can be much easier to manage those finances when they represent more than just the accumulation and escalation of wealth. (I’ve been binge-watching a lot of Star Trek, so excuse yet another reference to the ultimate accumulators of wealth, the Ferengi. Fun folks, but oy, do they go to extremes – within their fictional realm.)

There are investors who concentrate on stock movements without concerning themselves much with the company behind the stock. That can work, but the stories involved are mostly about charts and trends. That may be sustainable for them. But they can spend a lot of time concentrating on staring at screens with their fingers on the keyboard ready to act.

There are investors who concentrate on companies with strong growth trends, but only while the stock is going up or down. Waiting for a buildup or sitting through a lull may not be their style; which means moving onto new subjects every few months. They also risk missing a rapidly rising stock. Dynamic without being as frantic.

There are investors who concentrate on companies with steady growth, or at least steady revenues. Maintain the status quo, enjoy the hoped-for steady appreciation and possible dividends, and maybe only check in for news or quarterly financial reports.

There are investors who research companies, trends in technology, trends in society, trends aimed at profitably meeting unmet needs. It can be difficult estimating the value of such stocks because the future is always speculative. These can be story stocks, where there’s enthusiasm based on a company’s optimism; but not every story has a happy ending. I am in this camp.

I am one of those who is willing to speculate early, sit through the lulls, check in regularly, and be more comfortable than many with uncertainty and risk. A new investor asked how I’ve managed to hold one of my stocks for over twenty years. The same way I’ve held several stocks for that long. I find it far easier to remain engaged and optimistic in stocks that represent companies which are employing new technologies to do things like regrow damaged nerves, treat currently untreatable health conditions, improve energy efficiency, revolutionize restrictive wasteful and inefficient electronics, and enable faster and cheaper internet operations.

My style of investing is risky, not the riskiest, but definitely risky. (See Dream. Invest. Live. for examples of ups and downs. See My Triple Whammy for details of as one financial pro called it “A perfect storm of bad luck.” See the recent stories about MicroVision and MVIS for a developing story about a dramatic turn around including a stock rising 10,000% in one year.)

In over forty years of investing I have invested in stodgy companies, but I find them harder to keep in mind. Some of them have been profitable, but, well, even as I type this I took a long pause as I tried to bring up any way to describe them. They are easily forgotten until I look at the spreadsheet I use to track my investing performance.

But, that’s just me. I have met few investors who are willing to take buy and hold for such long terms. Disruptive and unprofitable don’t inspire them; they frighten them. That’s fine. Personal finance is personal. Don’t just do what I do. Find out what you want to do. Find out what you value. Be real about your situation. Self-awareness can be more valuable than the advice you may receive. Spend less than you make and invest the rest is a fine idea as long as you can pay your bills and money left to invest.

Ironically, people with less money may be more aware of how archaic conventional wisdom can be. They are less likely to be tied to an outdated model of finances. They may have been more aware of bitcoin, innovative ways to buy stock, the viability of operating a virtual business, and more efficient and decentralized technologies that are disconnecting people from industries and institutions. By choice or necessity, they may have an advantage over people who haven’t changed their perspective since the fall of the Berlin Wall, or the Apollo landing, or VE Day.

Personal finance is personal. You are a person. Don’t ignore your self. Respect your self. Learn about your self – and hopefully benefit from the knowledge.

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Valuing MVIS Looking Back And Forward

Rarely do I write about one topic so much in so short a time, but MicroVision is in a unique situation. Watching several videos and reading dozens of posts since the earnings report inspired the following perspective on perspectives.

“OMG, MVIS is worthless.!” OMG, MVIS is going to be the biggest thing!” Well, yes, or no, or probably something else. After twenty years of mainstream silence about MicroVision (the company) and its stock (MVIS) it is phenomenal to see so many posts, videos, analyses, and articles about the company and the stock. No surprise, they don’t all agree. At least for now, they may both be right, from their particular perspectives. 

There are plenty of memes about perspectives but because this post is about investing I suggest looking at a dollar bill. One view: It has a picture of George Washington. Another view: is has a picture of a pyramid and an eagle. Yep. Either view only gives half the story. 

In the last twelve months MVIS is up over thousands of percent. (It varies a lot because the stock price volatility from then and now.) The high point I’ve seen was 9,602%; oops, now 10,173%. On March 11, 2021, MicroVision announced earnings. Since then equally passionate people have claiming the company is barely worth anything, while others see it being the start of a new technological revolution which makes it effectively priceless – in a good way. 

Google Finance

Welcome to two common points of view in the stock market. A third will follow.

Let me tell you a story.

I know someone who is active in the stock market, understands data, and is adamant that the best (but not only) way to estimate the value of a company and its stock is to look back over the last five years of earnings reports. Past performance may not predict future growth, but at least the data are audited and official. By that measure, MicroVision, is making less money per year more than a few people. “Sell the company and go get a job” sort of thing. 

I know someone who is active in the stock market, understands data, and is adamant that the best (but not the only) way to estimate the value of a company and its stock is to look ahead. Looking ahead is inherently guessing, but intelligent guesses can lower risk sufficiently to invest. Investing is about the future, so where the company is going is more important than where it’s been. If they’re not going anywhere, why buy them? 

Looking back is effectively relying on the world not changing significantly. Looking ahead is effectively relying on predicting the future. Well, the world is changing, but we can’t know how. Assuming nothing ever changes has trapped many people and companies in archaic institutions and anachronisms. Assuming we can predict the future has led to many predictions that look silly years later. 

And then, there are the people who ignore the company, and who only care about the numbers game of how the price is moving, and project the future by applying methods based on correlations of previous market actions.

So, there are three models. 

Those two people I mentioned above represent a couple managing the same portfolio. Their best performance was when both of them were correct; the past performance suggested continued growth, and analyzing trends suggested a company well positioned for a changing world. You may not be surprised to hear that such a confluence was rare – but very profitable. And that when they didn’t agree there was tension.

An easy example. Look back about twenty years. Barnes & Noble was a bookstore with decades of financial reports, appealing stores, and growth. You know Amazon gets mentioned next. A short history, an unproven business model, and an unconventional CEO. Old and steady focused on profit. New and aggressive focused on growth. Oh well, a missed opportunity. (They didn’t buy AMZN.)

So, here sits MicroVIsion. Financials aren’t encouraging, on their own. There’s great sentiment behind the projections, but most of it is based on speculation. And MVIS is up over 10,000%. Irrational optimism? I’d like to say yes or no, but we won’t know for months or years. 

Google Finance

The more astute readers will realize that I tend to look forward, otherwise I would’ve sold MVIS over a decade ago. Until a year ago, that would’ve been considered a wise choice. But, I held. I’d like to say it was because I saw this coming, but it was really because the stock had sunk so low that maintaining the tax losses was more valuable, also I hold out of habit because I’ve seen patience pay off well before (examples in my book, Dream. Invest. Live.), and because I still thought the trends were leading MicroVisions’ way (even as it seemed that management couldn’t capitalize on their position.

And here is MVIS at over $17.40 after setting a record low of $0.15. Which is the value that is closer to correct? Here’s my opinion. Opinion, opinion, but a factual declaration. Opinion. 

My previous MicroVision/MVIS post helped clarify my thoughts and conjectures. The range of possibilities is infinite with the majority of the cacophony seeming to be focused on either valuing the company and stock based on a buyout, or basing it on the value of the product; with, of course, a camp that thinks pennies may be more correct than dollars. 

My opinion. I have no expectations. The situation is unknowable, possibly even for the company’s management who know far more than we do. Even they may not know the intentions of suitors and customers and competitors. I am keeping in mind that it is possible that one of the product lines and attendant patent portfolios will be sold off for a very large sum. That acquirers gets exclusive rights and MicroVision gets cash ($2B seems possible based on nothing more than the mood in the community.) Another product line could become committed to a partnership or joint venture initiated partly with cash, and with profit sharing. The partner basically funds MicroVision’s continued development of that product; e.g. cash in exchange for buying into a hopefully successful product. (At a guess, and it is a guess, $1B in cash and hopefully eventually hundreds of millions in revenue, though those revenues may take years to actualize.) The remainder of MicroVision’s products and patents remain in a MicroVision which temporarily has a smaller product base, but a significantly better balance sheet, possibly enough for MicroVision to become an acquirer of other firms and their technologies and patents. It’s a complicated scenario, but life frequently becomes more complicated, rarely does it get simpler – unless that’s because plans fail.

(For example:

LiDAR sold off to Apple or Ford or…,

Augmented Vision developed in partnership with Microsoft,

Stand alone displays, interactive displays, et al remains with MicroVision.

In such a scenario, initial assets are at least $3B. Near term (within three years) revenues are guessed at ~$0.2B. Longer term revenues are guessed at $1B. To simplify the calculation, if that partial buyout is for about a quarter of the company, then each of the other thee quarters can be valued at $2B. ($3B cash +3X$2B in valuation + price/sales of 6 X $0.2B = $3B+$6B+$1.2B = $10.2B market capitalization.) Divide $10.2B by the number of shares of roughly 150,000,000 = a price for MVIS of ~$68.

That’s a guess. I’ll barely call that an analysis. It’s just a possibility, like any number between zero and the GDP of the world is a possibility. It’s just that zero and infinity are possibilities that are highly improbable. 

Discount it for risk, and get to zero. Multiply it by a premium and, well, who knows? 

Personally, my guess is handy for quieting my anxieties and eagerness. Because so many of my shares were bought before the reverse split, it doesn’t make sense for me to sell before ~$57. My guess shows me that it is possible, but I don’t know if it is probable. Beyond that, $100 would help me re-retire, partly because I’m now old enough for Social Security. $200, yeah, that’s retirement, probably remaining in my house – which would finally get new windows and a new roof. $300, sure, retirement with more style. $400, ah, back to being a philanthropist (long story, but I’ve been there before.) But, a move from $17 to $18, nice to see, welcome for sure, but not something that prompts me to sell. 

Usually such analyses have been about companies and stocks whose stories would take years to enact. MicroVision’s story is different. Looking back, it has been a very long road taking place over decades. Looking forward, major events can happen any day, with strong suggestions that big things will happen within weeks. Both are right.

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Dynamic MicroVision And MVIS

I really wanted to wait. I wanted to write this blog post after the market closes on Friday (March 12, 2021). MicroVision (the company) and MVIS (its stock) are both moving so quickly that waiting a day can change the story; but in that case, there’s value in telling this story then that story. Today (March 11, 2021), they announced earnings. Tomorrow, the market will officially react. In the last ten years of this blog, I’ve written about them over a hundred times. At some level the story’s stayed the same. There have also been a lot of changes; so, I guess I’ll add today’s activity to the list.

One of the biggest changes has been the attention to stock is getting. The company is getting attention, too; but from what I read in social media and see on YouTube, many people are finding the stock first. Many of the recent discussions call MicroVision an LiDAR company, ignoring the augmented vision work. Or, it’s an augmented reality company; which also seems to have a LiDAR product. Or. Or. MicroVision is many things. They’re working on LiDARs for autonomous vehicles, and LiDAR for the home, and wearable displays, and stand-alone displays, and interactive displays, and in the past worked on bar code scanners, medical equipment, and, and, and … oh, yeah, projectors small enough to embed in smartphones.

MicroVision is basically a company that has many (somewhat aging) patents on all of those things based on an ingenious chip design which incorporates an oscillating mirror. Shine a light on it, and it can paint a picture. Let the world provide the light, and let the outside image hit a sensor. Visible light out becomes a picture. Visible light in becomes a camera. Other parts of the electromagnetic spectrum and get LiDAR. Get fancy and make a display and a sensor, add sophisticated software and create touch-free interactive displays. Cruise the discussion boards and be overwhelmed with creative ideas being played with by enthusiastic shareholders. But, the company has rarely made significant money; yet, is still in business. Great potential. Terrible financials.

A confluence or a collision of events have changed the company’s and the stock’s situation.

Because so many people found the company via the stock, let’s step there, next.

Within the last year, the stock is up 7,315%. That is NOT 7.315%, which would be a typical increase for a market average. Within the last year the stock has gone from under $0.20 to a high of over $24. It is fun realizing someone became a new shareholder about this time last year, held, and has reason to smile even as the stock retreated to under ‘only’ $15.

Google Finance

Many people are crediting the current CEO for everything. I suspect over twenty years of efforts led to that day last year, and to today.

The biggest news has been LiDAR. LiDAR is basically radar but using a different part of the spectrum. LiDAR and radar are powerful tools, but fitting them into a car at a reasonable price has been difficult. Early prototypes used something that supposedly cost about $10,000 per unit and was the size of a KFC bucket. Not elegant, but successful enough to further the technology. I don’t know the exact dimensions, but MicroVision’s version looks to be about the size of a carton of eggs, supposedly will cost about $1,000, and may have performance superior to the competition. Maybe. The units aren’t in mass-production, haven’t been certified by the customers or the regulatory agencies, and are like any new technology – needing to prove themselves. But. It sounds like the customers like the MicroVision units. Production-quality units are intended to be shipped out in April. (Check the company web site for details.)

MicroVision LiDAR

The second most notable news has been the augmented reality components. Microsoft is using MicroVision components in their Hololens product. That went a bit quiet about the time that Covid hit; but Microsoft continues to develop and expand the product. But when will the revenues arrive, and will Microsoft’s experience inspire more customers?

Then, there’s the possible display customers, the interactive display customers, the consumer version of LiDAR for things like in-home security, and … I’m undoubtedly missing something.

MicroVision is more than any one of those product lines.

Oh yes, and the company was in such a sad situation within the last year that the CEO became much more active in trying to find a buyer.

Take your pick. Which one of those is what started and fueled a 7,000% increase in the stock price – even as the revenues remain almost inconsequential? Many are pointing at their favorite. Add them up. Scroll through Peter’s MVIS Blog for his price calculator if you don’t want to create a spreadsheet. The numbers are getting rather silly. They may be reasonable, but silly when you consider that someone could’ve bought the entire company a couple of years ago at a ridiculous bargain.

LiDAR company market caps are measured billions.

Microsoft probably has high expectations for Hololens.

Within five years the global display market is expected to exceed $177B. Even a small market share is a lot of money.

Even without adding in miscellaneous and it’s possible to add billions to billions, for a company that was under $100M.

Oh yeah, and then’s there’s the Gamestop story, a headline and a community. So many of those investors have found MVIS that the MVIS discussion boards have gone from a few hundred folks talking amongst themselves, wondering if the company and the stock will ever be found, to almost 20,000 on the reddit board creating a cacophony of enthusiasm. It’s like going to your favorite pub to visit a few familiar faces, then finding the place has gone viral and it’s scary just trying to get in the door. Oh, well, that’s success, too.

Within one year the stock has gone from irrational pessimism to possibly irrational optimism. Or, has the stock not even reached a rational valuation?

The buyout will fix the price. If the buyout happens. Imagine working in a methodical mega-corp, trying to negotiate a deal for a $100M company that the investment community has driven to over $2B and may see no reason to stop until it is over $20B. Do you still buy out the company? Does the company need to sell? Are you now the only company that wants in?

MicroVision was complicated enough with its various product lines. Imagine the joyful mess if most of them become successful at the same time to a similarly large extent.

I don’t think the company will be bought out as a whole. There were many things to note in today’s conference call. I suggest visiting the various discussion groups (reddit, Fool, SI, IV) for better analyses than most publications produce. Allow me to note some language choices. (Hey, I’m an engineer, but I’m also a writer.) The CEO was suing plurals: clientS, partnerS, mergerS.

Multiple customers? Fine. That’s something most businesses consider a healthy thing.

Multiple partners? That’s what I heard. If so, good. Partnerships can work well, and not being tied to one is even healthier.

Multiple mergers? OK. Each gets only what they want, properly values it, and doesn’t value the rest at less than its worth.

The permutations are more than my brain wants to handle (at least this late at night, and for free. Now for a fee, well….nah.)

This blog is about personal finance, so I have to pick something to plan around. It is rare that everything succeeds. It is rare that everything fails. Last year the worry was that everything would fail, at least as measured by stock price. This year people are reacting as if everything will succeed, as suggested by price targets (that are as ambitious as the ones I had many years ago.) I am going to assume (cue the ‘assume’ jokes, but hey, that’s what we have to do) is that: 1) at least one product line will be sold off, 2) at least one suitor will become a partner, at least in part, 3) with the extra funds subsequently available, the company can proceed with at least one of the product lines independently. In such a scenario MicroVision doesn’t go away (which I prefer), is provided with a very healthy cash position, and may have substantial profitable revenues. In such a scenario, there isn’t one conclusive exit like in a merger or acquisition. Portions of the investor community will drift out with each product line spunoff, but others may be drawn in as the financial situation improves.

Will I be able to re-retire because of all of this? That’s hard enough to say, and it’s late enough tonight that 1) I’ll consider that later, and 2) won’t do anything about it soon because such a sequence of scenarios can take years.

As for the valuations, allow me to dream and recall another buyout I was involved in. Does the term “To Infinity and Beyond!” sound familiar?

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Someday We Will Celebrate

Thinking ahead. Looking forward past current crises. We’ve missed out on a year of celebrations. Some day we’ll declare success over the pandemic. We know it won’t truly be over. Most contagions find ways to survive, but some day enough people will have masked up for long enough, enough people will have taken the vaccine, enough people will have found enough ways to cope. For that day I suggest a day of holidays.

Pardon the departure from my normal personal finance ponderings.

With slight alterations to their definitions:

  • Memorial Day
    • Because those who perished should be remembered
    • Sunrise service
  • Groundhog Day
    • Because every day has felt like the movie
    • Starts at 6:01AM 
  • Christmas Day
    • Because getting past the pandemic is worthy of gifts, lights, and songs
  • Valentine’s Day
    • We’ve learned to know who knows how to love and live
  • Independence Day
    • Fireworks at noon, just because
  • Labor Day
    • Celebrating every essential worker
    • Free drinks for them (but I’m not sure who will serve them)
  • Arbor Day
    • Making sure Nature isn’t forgotten
    • An hour spent planting trees will only partly thank Nature, a refuge for many
  • Pick your own culture day (St. Patricks, Cinco de Mayo, – or art)
    • Many got through thanks to their heritage and culture
    • Many got through thanks to writers, musicians, artists
  • Thanksgiving
    • Reflect and give thanks, feast, and sure, maybe play football
  • New Year’s Day
    • A short fireworks show at midnight, a closing period as we begin a new time

I don’t know if we’ll get there within a few months, or even this year, but I do feel that if we’re willing to celebrate victories in wars, then the end of this struggle will definitely be worth reflection, ceremony, and celebration.

You are welcome and encouraged to edit because we’ve got plenty of time to get this right, and it deserves to be just right.

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Thirty Steaks – Burp

Burp (figuratively.) A while ago I celebrated finances that were good enough that I could take advantage of a sale on bulk meat – Thirty Steaks. You can probably imagine my doctor’s carefully tempered reaction. Polite and professional, but I could imagine the calm, caring demeanor covering someone rolling their eyes, grimacing, and generally not quite sharing in a red-meat bonanza. But hey, I know a deal when I see one. This evening I finished eating the last one. No burp required.

Go back and check the origin story, if you’re very curious. It basically comes down to a local grocery that is not part of a national mega-chain of supermarkets. It’s part of a more local group that seems to have criteria that are a bit more aligned with people than profits. That’s basically true of most of the groceries near my house. Maybe it’s a small town thing. Maybe it’s an island thing. Maybe it’s because this is a very charitable place. (See Feeling Charitable On Whidbey for the data – and applaud Greenbank for excelling at giving.)

On Whidbey it’s possible to find high-end, grass-fed, organic, locally-sourced, whatever-other-trendy-adjective-is-necessary food at prices that match. And, sales of more typical grades for far less money, if you time the sales right. One of my real estate clients runs restaurants on the mainland. As I told them the story to fill some time they politely and absent-mindedly nodded their head as we walked to a property; and then they stopped as it sank in. I was getting meat for less from a retail operation than they were paying for wholesale – they said. Island life is not the same as mainland life.

Frugality doesn’t have to be dull, stingy, or distasteful. Pardon me as I sip some box wine to finish the meal.

When I wrote about the steaks I didn’t expect much of a reaction. It was a sale they regularly hold. It was advertised in the papers and online. Where’s the surprise? Evidently, few folks actually take advantage of the opportunity.

Of course, many of my friends are vegetarians, vegans, or pescetarianism. And, no, that last one is not a Protestant sect, it means the only meat they eat is seafood, from what I’ve been told. My apologies to all, but I’ve tried the variations and my body rebels. Maybe I’m a throwback. So it goes. Biochemistry doesn’t make judgments, and I shouldn’t ignore what my body tells me.

So, tonight I finished the last of the steaks. It took me 156 days to eat them all. That’s about one steak every five days. They also weren’t very large, only about five ounces for each one, with a few that were about twice that for special occasions or really bad days. I guess bad days are special, too.

The reactions were interesting. Assumptions quickly went to extremes. To paraphrase entire conversations down to a few phrases: “Oh, no.”, “That’s not healthy”, “That’s gluttony”, “Don’t tell me you’re cooking them to well done. What a waste.”

It’s almost as if every topic is now taken to extremes. Moderation is not in style.

Frugal folk get to deal with such reactions from people more comfortable in the mainstream. A step to the side of the mainstream can be mis-interpreted as dancing along the top of a cliff. Advertisers emphasize artificial lifestyles because they have to fit their message into 15 second bites. There’s no room for nuance. It is assumed that everyone wants to live the same way. Frugal folk, however, get to make their own choices based on their own values and their own circumstances. Frequently that means explaining choices that may not make sense to others, or simply not mentioning how they manage to live a life that isn’t normal.

2020 proved ‘normal’ is bring redefined. Mainstream has turned from a smooth course into chaotic whitewater. People who may have been seen as extreme may find that they’re standing in the right place at the right time to become guides to people who are trying to find a new path.

The people I know who are best prepared for a new normal are also people who are not trying to grab the spotlight. They aren’t trying to be in the headlines or on the front page. They don’t have podcasts or blogs. They aren’t spending hours a day watching videos, movies, or shows. They don’t follow sports, but are more likely to be active outdoors, bicycling, gardening, or managing their projects. They’re living lives that make sense to them, and they don’t care if their choices make sense to anyone else.

I must not be one of them because I have a few blogs, a podcast, and end up in the news occasionally. (Though being part of the news in a small town community sometimes means simply showing up and smiling for the camera because you know the photographer, or providing a quote because you know the reporter.)

I’m also not going to list their names. I will, however, suggest that as we try to find new ways to live, we are lucky enough that we may already have guides nearby. Look around for the quiet people who had chickens before they became trendy, who bicycled because it made more sense than carrying around two tons of car just to get a pound of food, who enjoy and maybe even run thrift stores or recycle centers. Many of them in my community are some of the nicest and most generous people I know. You probably know a few, too. They might be the ones who can tell you how to make thirty steaks last five months at a price that others would spend on one meal.

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Parabola Hyperbola Hyperbole – MVIS

Whee!!! Whoa. Wha? MicroVision’s stock, MVIS, has been doing some crazy stuff, lately. MicroVision has always been a story stock, but usually there was only a small audience listening. Something changed.

A year ago it looked possible that a new pandemic interrupted their supply chain, dropping the stock to $0.15. (Coronavirus Implodes MicroVision

I didn’t follow the tip to buy more, and a few months later the stock hit $1.70. (Wither Or Whether MVIS

In July, $2.71, again without my sought-for “significant, positive, quantifiable” news. (No News Big Smiles MVIS

Sure, there were announcements of strategic positioning and favorable customer responses, but no real financial news. 

Same situation but the price rose to $4.01. (Lessons With LTBH Via MVIS

And then, Gamestop, or was it the anticipated delivery of a LiDAR component in April, or the anticipated buyout. And MVIS reached $7.37. (Gamestop And Moving Smaller Stocks)

Welcome to two weeks later. MVIS rose to over $15, and started sinking to $14 at the close of regular trading earlier this week. A few minutes, yes, minutes later the company released one of their first Press Releases in a long time. (MicroVision, Inc. Announces Progress on its Automotive Long Range Lidar A-Sample) The timing isn’t surprising. Most PRs are published after market close. But the After-Hours market was open, and followed by the Early Trading, today. MVIS jumped ~50%. Through today (Thursday, February 11, 2021) the stock has bounced between $17 and just under $22. All of that on news that the company; “…has received necessary components and equipment to meet its April milestone of completing A-Samples of its Long Range Lidar Sensor“. No sales, no projections, no commitments to analyze; and yet, good news because of the interest in autonomous vehicles and things like home security. Imagine what will happen when that news is announced, assuming it eventually happens. 

Google Finance

From $0.15 to over $15 in less than a year. I lamented some of the failings of my preferred Long Term Buy and Hold strategy because my losses from those first shares were so large. I’m celebrating that same strategy now because I haven’t missed out by trying to time the market. As a group, all of my current MVIS holdings are now profitable, something I didn’t expect to see this time last year. Individually, some of those shares won’t be profitable until $155. But now I am hearing fresh voices calculating those same valuations other long term shareholders like me arrived at years ago for different reasons. 

There’s a battle between logic and emotion.

Logically, IF MicroVision succeeds in the LiDAR industry, and in the Augmented/Virtual Reality industry, and in the display industry, THEN valuations in the billions become reasonable. One benchmark has been buyouts of similar companies for billions of dollars.

Emotionally, MicroVision and MVIS probably just experienced an extraordinarily long bout of irrational pessimism, which was understandable because they haven’t been profitable. Emotions can swing faster than fundamentals, which may mean MVIS’ rise MAY be at least partly irrational optimism. 

Wasn’t it Warren Buffett who said something like; “Buy when folks are pessimistic so you can sell when they are optimistic.” Ah, here’s the quote; “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

What to do? What to do?

I’ve lived through this before. A stock rises without regard to news or conventional expectations. I wish I’d chronicled it but, I can recall one of my stocks rising 240% in one day, and several rising 140% in a day. Historical annual averages of 7% are well-grounded, but the average does not describe all of reality. A lot can happen in a day, or a few hours.

When to sell? 

It took me a few years to realize that the largest losses in my investing career weren’t from selling for much less than I paid. The largest losses were from selling instead of holding. The simplest story is when I sold Apple stock (AAPL) in protest because they fired Steve Jobs. This is only approximate, but AAPL has risen about 120,000% since then. The most it is possible to lose is 100%. +120,000% versus -100%. Silly me.

Google Finance

When to sell? 

Every situation is different. Apple was a leading-edge technology company developing innovative electronics for an unproven market and was about to encounter financial difficulties for several years. MicroVision is… Hello, a moment of honesty. I hadn’t intended to make this comparison as I started writing this post. That’s the nature of writing. I just gave myself something else to think about. Before I go much further, though; the investing decisions I made in my twenties are different than the ones I make in my sixties. There are forty fewer years of lifespan to work with. Hmm. 

I’m not the only one trying to decide what to do with MVIS. I’m familiar enough with the long-term MVIS shareholder crowd that many of us know each other. The last twelve months have seen an influx of individual investors that seem to have quadrupled the number of voices on the most active board I track, reddit. Their enthusiasm is so energetic that I’m mostly holding back and letting them run the conversation. Besides, I don’t think they want to hear from an old guy who has seen the downs as well as the ups. 

Much of the new crowd is emotional. Except for a few detractors, many are very optimistic. Almost all are just learning about the company, now. That’s natural. That’s how I started, too. (re: selling AAPL in the mid-80s as a protest)

Where will it go? Of course, none of us knows and all of us are guessing.

One fresh shareholder optimistically wrote about the stock going parabolic. Hear my sigh as the aerospace engineer kicks in. Yes, a parabola can point up, but the most frequent use of a parabolic trajectory is in ballistics; as in, something rises at high speed and then crashes back to create a crater. That is a possibility. The handy thing about investing is you don’t have to stay for the entire ride.

While in aerospace mode I thought about a curve I prefer, the hyperbola. Rise, rise, rise, and escape. That’s a model trajectory for satellites that escape Earth’s orbit.

Ah, but stocks can’t rise forever. They are limited by the wealth of the economy.

A more common curve sounds somewhat scatalogical for some: the Sigmoid Curve. A stock starts low, rises quickly, approaches a new and higher level, then levels off; possibly repeating.

wikipedia

All of the mathematics are fun for me to play with, but what are the numbers to attach to decision points? The mathematician in me says there are too many unknowns and I probably don’t know all of the equations. MVIS is in the midst of an emotional, subjective, speculative phase with the promise of near-term objective news. 

One of the advantages of investing on the Internet is the availability of many voices. From various discussion boards, private messages, social media, and analysts’ videos it’s obvious that there is no agreement. Up, is popular. Whether that stops here, or at $33, or at $100, or higher is being debated. A few point at zero, or close to it. The market will tell us, but we have to wait, and we have to decide to act or not.

I could use some money. Balancing tax losses and gains makes that a bit more difficult. (Waiting for $155 would normally seem ridiculous or take too long, but in this market sentiment – shrug.) I also don’t need the money – right now. My style of investing doesn’t require checking on the stock every day. (see my book: Dream. Invest. Live.) I do so mostly for entertainment, but when it might be time to act, I check for real. I intend to hold because I endured decades of pessimism and am willing to endure a long spell of optimism. I will sell if I need to, especially because of the pandemic and its effect on the economy. Holding can be difficult as it rises from $18, just as it was somewhat difficult to believe it could rise to $18 from $0.15. I’ll be watching intently because until significant, positive, (financially) quantifiable news is released it will be difficult to tell the difference between a hyperbolic trajectory and hyperbole.

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Super Bowl Ads 2021

I feel sorry for the people who had to produce ads for the 2021 Super Bowl, and yet, maybe not too sorry. We’re in a pandemic that’s mutating. The US is so not-united that one of the ads was wise enough to mention the Re-United States. Social injustice, climate change, and wealth inequality are becoming more apparent (which is at least better than covering it up.) There are so many opportunities to upset someone, to be accidentally insensitive, and to have an ad backfire as a meme that writing a script can seem impossible. But then, that also means the bar is set so low that something innocuous can be good enough. Considering all of that, here’s my yearly review of the Super Bowl ads. 

Some background. Once upon a time I watched football a lot. Then I found hiking and skiing and running and bicycling and – why would I stay inside watching millionaires playing a game for billionaires when I could be out there living my life. But, I watched the ads afterwards because they were fun. Then I realized the ads were an intense opportunity to check market sentiment. What do companies think will sell? Who are they targeting? Do the ads resonate? So, now I watch the ads for those reasons as well as to put some perspective on my investments. Are my investments in areas no one cares about? That can be good or bad, and it’s nice to know which is more likely. For a while my portfolio was diverse enough to include at least one company with an ad. Not so now. Biotechs don’t say much prior to FDA approval. High-tech electronic component manufacturers advertise to other corporations, not the public. And yet, those end products can be reflected. 

I make life easier for me by waiting until the game is over, then watching the ads on YouTube. This year I got through most of them, hit the wrong key, lost track, and decided I’d seen enough. Now I hear I missed some good ones but I’m not starting over. 

Wince. I know it would be odd to have every person in every ad wear a mask, but I was distracted when I saw maskless faces, hugs, and a lack of social distancing. I guess the advertisers are uncomfortable showing people who can’t show smiles. Hopefully this won’t be an issue next year.

Power! Vroom Vroom continues to rule. Lately I’m thinking more about cars that are more reliable, and would be interested in examples of which ones are best suited for someone working from the road rather than the office. That’s probably too narrow a market, or was. Even the truck ads that show trucks at work have to show them kicking up a lot of dust as they speed away from the job site. I’m a fan of Jeep, and one of their ads showed Jeeps busting through snow and racing around. When I really needed a Jeep’s abilities I was driving slowly, maneuvering around rocks and ruts, and striving to stay in control on snow and ice. So much for practicality and utility.

Electric Power. One of the most positive signs was the tendency to show electric vehicles. Yay! I look forward to owning one some day. Get the kinks worked out for me, please. Buying into that industry might be tough. I feel sorry for a friend who wanted to buy Tesla stock right after the IPO. Buying that now, ouch. Glad to see electric vehicles are so prominent.

Chips Dips and Drinks.   Most years there’s a great explosion of ads for party food. Drink Responsibly (but buy and drink a lot, eh?). There was less of that, so maybe there was some restraint of showing people partying. Snacks may be more for comfort food than party food. Will that persist? 

I liked the Budweiser ad explaining that they would donate the ad money to fighting the pandemic. I was then surprised to see so many of the other Anheuser-Busch drinks running ads anyways. 

Movies. Spoilers! which is why I skipped those ads.

Money. Personal finance got some time on screen as various institutions offered early access to tax rebates, instantly improved credit scores, rocket mortgages, fast, fast, fast, and seemingly free. Now, about those fees. The ads looked like they were targeting the people who had enough to go shopping, but not enough to invest (except for Robinhood, which was interesting considering what’s going on with “Gamestop And Moving Smaller Stocks“. Considering what’s going on with stimulus packages, unemployment, and a bubbly stock market, next year’s ads might be back to those from the Great Recession.

Flowers. Short, sweet, in time for Valentine’s Day. They actually described what they do and how they do it, which is rare in comparison to the others that sell image, ego, and emotion.

Stars. I don’t have the data, but it seemed as if there were more stars and celebrities this year. Is that because they are less likely to be filming a movie or touring with their band? The ads showing them in their houses was distracting, too. You’re problem is that you have to hide in the closet in your mansion to eat your chips? Sad. Also sad was how many celebrities I couldn’t recognize. Getting old, I guess; or, more likely to be engaging on social media or writing my own stories.

Home Security. A sign of fear: the indoor drone that can be launched remotely because the security system sent the homeowner an alarm. That one and some of the others are up for security, but also making it easier for parents to spy on kids for hackers to see inside the house. At least pets and people with health issues can be checked on. Ironically, this is one place where one of my investments (MicroVision, MVIS) might be selling subcomponents. (And that’s a story I’ll be writing about in more depth Real Soon.)

Inspirational. Here was probably one of the toughest tasks. Find the balance between too sappy and sweet versus too real and serious. Jeep did a pretty good job. I think the ads from the Great Recession may have been stronger, but then we had the illusion that we were united, fair, and working towards common goals. 

There were more, but I looked for and got a message. Very few ads really tripped up as much as they could have. Despite a few ads that actually choked me up (hey, it happens), the general feeling seemed to be caution with some optimism (maybe things will be better next year, maybe), less extravagance (unless you’re a celebrity), a concentration on home and lawn and security, and a tendency to hold back on the humor as if it is still too early for any of the topics in the news. 

2020 made us question many of our societal norms and assumptions. Good. Challenging assumptions can be healthy, especially if those ideas haven’t been checked in years or decades. What we do in 2021 will be reflected in the 2022 Super Bowl ads, assuming there’s a Super Bowl in 2022. Maybe then we can celebrate what we’re doing now. Stay tuned.

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