Wednesday, April 15, 2009

RMBS -- a flyer?

Although we focus more on trading the futures markets, we also talk to friends and family about asset allocation, mutual funds, and individual stocks. From time to time, we'll post information on these areas (such as prudent asset allocation) on our blog.

In this post, we want to discuss "flyers." We sometimes like to take a small amount of our portfolios and invest in a "flyer." A "flyer" is an investment that has a fair amount of risk -- but also has huge upside. We wanted to mention a company that we have been following called Rambus (ticker RMBS). Rambus owns many patents in computer chip interface and system design -- and is trying to collect licensing / damages for their patents.

Rambus is involved in patent litigation (ugh) -- but seems to be winning the war and getting over the hump in terms of risk. Note, however, that I thought this to be the case back in January, when the stock was a bit higher. In early January, things seemed to be going RMBS's way and the stock was trending higher to around 18. Rambus got blind-sided by a court in Delaware (which some feel will be overturned) and the stock cratered to the single-digits.

However, Rambus has continued to make progress in other venues and has been edging upwards again. The stock is building a base at around 10 -- and as a trader, the stock chart is looking favorable. Rambus certainly has a lot of risk and volatility surrounding it -- but it is certainly a "flyer." It has the potential to easily move up to a multiple of its current price -- with some predicting triple digits.

You can find more information at, forums at and (lot of noise at forums) and

Please let us know what you think -- and what other "flyers" you like.