Monday, 18 June 2007

Buying CLWR, selling COH

Getting long tech, short handbags! Buying CLWR (Clearwire), shorting COH (Coach).

Clearwire, trading at $23.92 with a market cap of $3.9bn (no P/E as the "E" doesn't exist yet), is a Craig McCaw run company specialising in WiMax...if you don't know what WiMax is, do some research. This technology is going to change the world, and personally I think has the potential to destroy the cellphone companies. WiMax is essentially WiFi but over greater providing you with a high-speed always-on internet connection, wherever you are. Laptop manufaturers are DEFINITELY going to be supporting this...and imagine what you can do with cellphones...all calls could be directed over the internet for next to nothing. There is enormous potential in this technology, and I can't see how it CAN'T work...this stock is going to multiply over the next few years.

Coach, trading at $49.00 with a market cap of $18.2bn, a P/E of 30 and a forward P/E of 24, sells handbags. Yeah...$18bn+ and it sells goods that anyone else can make, where counterfeit ones of sometimes very high quality trade at a tiny fraction of the price of the real stuff, and in a market where fashion can turn and brands can lose their appeal. This stock has had as good a run as anyone could have hoped for this decade, up over 1000%. It trades at 7.1x sales, and is very highly rated by analysts. At these levels, it isn't going to take too much of a stumble to upset this stock.

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