The Value of Speculation

Digital Ostriches

Crucial finally brought out PC2100 and cut the price of DDR in half. Took a good deal longer than I thought, or probably
even Crucial, but it happened.

I’ve told you a bunch of times that was going to happen. When a company keeps saying, “We’re going to bring out DDR and charge little more than PC133,” it’s pretty easy to report, “This company is going to bring out DDR and charge little more than PC133.”

But this development shocked a few of you. One person wrote me and said he was on the verge of buying DDR for twice the price when some angel sent him an email informing him of the Crucial move. He asked me what was the reason for this shocking move.

I told him it was hardly shocking to me and shouldn’t have been to him since I had mentioned it a ton of times on the front page. He dismissed it as “speculation.”

Well, not listening to “speculation” meant he almost paid twice as much as he should have.

I see that approach to life fairly often. I even occasionally get people who get downright mad that I even look down the road.

If you just look at what is, and don’t look down the road, you’re going to get blind-sided sooner or later. Pretending the future doesn’t matter doesn’t stop the future from mattering. It doesn’t work for the ostrich.

I do a lot of “speculation” here. But there’s different kinds of “speculation.” In the case of Crucial and Micron, the company publicly stated they were going to do something, and kept saying it. I wasn’t 100% sure of that a few months ago. The chairman of Micron probably wasn’t 100% sure of that a few months ago. But if you spend $200 for a stick of DDR a month or two ago, you’re probably not thrilled about it.

Something like that is a lot more solid than, say, looking at an off-hand comment about Willy2 die size and concluding that they’re not going to change much. That’s speculation.

On the whole, tech companies are secretive. They don’t tell you what you want to know when you want to know it. In that situation, you try to piece the different pieces of the puzzle together, add some sense and experience to it, and try to figure out what the mysterious ones are going to do.

Ignorance Is Not Bliss

Do I get it right all the time? Hell, no. Nobody does. Do you know what? Even if I had every executive from a company wired, and knew what they were all saying, I still wouldn’t be 100% right, because they change their minds. AMD and Palomino is a great example of this: they kept saying publicly one thing, then changed their minds.

That’s life.

Most of the time, especially if you try to plan ahead, you can’t wait for 100% certitude.

In his autobiography, Colin Powell said that when he had to make decisions, he generally made them when he had 30-70% of the total possible information. Less than that, and he didn’t know what he was doing. More than that meant waiting too long, and inaction becomes an action. If Saddam Hussein does something, and you sit around thinking about it for a month, he’s likely to conclude that you’re going to do nothing, then do some more.

Obviously, buying computer parts isn’t in the same category of decision-making. but refusing to look towards the future at all is not the “safer” approach; it’s actually gambling even more, and here’s why.

You go to the race track. Person A studies the Racing Form and finds out all he can about the horses. Person B does absolutely nothing to prepare, and just picks willy-nilly. Whom do you think will do better in the long run? Whom is the bigger gambler? If you don’t look towards the future at all, you’re Person B.

Reading what I think or suspect about the future is like reading the Racing Form. No guarantees, but it puts you in the position to make a better decision than not knowing anything. It gives you things to look for, things to check, things to verify later on when better info becomes available.

Last year, I said that RDRAM probably would do better on the Willamette Tehama boards than with the 820 and 840 boards. Was I sure? No, but at least it gave you an important point to look for when that board became available.

For instance, if I say Willy will likely not be modified much, that’s something to look towards and check in future reviews, before you buy. It also tells you that you’d probably want to keep an eye on what AMD has or shortly will have. Do I know if Clawhammer will be better than Willy2 or not? No. My suspicion is it will be, but what I do know is that this is a critical matchup that you’re going to have to look down the road to make a wise decision.

You shouldn’t consider this “speculation.” You should consider it “early warning,” an alert. There have been and will be false alarms. Nuclear early-warning systems have had false alarms, too, but would it be better to say, “Let’s get rid of them and not believe it until we see mushroom clouds?”

You can’t make a determination if you don’t know there’s one that’s going to have to be made. For instance, people have started to ask, and will continue to ask about DDR. I’m going to talk more about that in the next article, but knowing that the next generation of DDR will not fit in current DDR memory slots is going to influence a lot of decisions. Not all. Depending on your situation and your future plans, that’s either a big factor, or not one at all. But you can’t make a good decision unless you know that little tidbit.

Do I know if PC2100 will work in Clawhammer mobos? Don’t know for sure, but I really doubt it. Will PC2100 work with mobos that will run Thoroughbred? Again, don’t know for sure, but I find that likelier, though you might not like the results.

Would I rather know these answers for sure? Of course I would, but it’s certainly better to have a lot of doubt and uncertainty something will or will not work than to assume it will. I’ve gotten so many emails from people who didn’t look ahead and said, “I assumed it would work” and now they’re assuming a loan to pay for the first assumption.

If you see a piece of mine talking about the future in an area that interests you, I don’t want you to believe me like I were Jesus. Even I don’t believe me about these things like I were Jesus.

What you should do is two things: First ask yourself, “How sure does Ed sound?” Ed doesn’t use words like “may” or “might” for decoration; he’s indicating how sure or unsure he sounds about it. After that, ask yourself, “How does it affect me if Ed is right?” then ask, “How does it affect me if Ed is wrong?”

Let’s take DDR. Ed was pretty sure on that one. Ed being right saves you about 50% on DDR. Ed being wrong means I’ve waited around three months for nothing.

Ed doesn’t want you just to believe him when he writes these things. Ed wants you to ask yourself those questions first before making a decision.

Learning From Others

AMD/Palomino is a case of an example where early warning failed. What happened here?

1) AMD pushed back the horsey homecoming quite a bit AND
2) TBirds got unexpectedly better.

The combination of the two events changed the environment, and made a “buy now rather than later” strategy a good one for many.

What do we learn from this?

We learn that AMD isn’t too good or honest on its word (and I’ll explain why in another article today), so we won’t take the exact timing of their forecasts too seriously any more. So if they say now that Clawhammer will be available by X, we’ll say X + 3-6 months. However, we’ll hardly say that Clawhammer will never exist because of the Palomino fiasco.

The Price of Simplicity

Remember the Fram oil filter commercial, “You can pay me now or pay me later?” Pay for preventative maintenance by regularly replacing the oil filter, or pay for some towing and car repair later.

If you don’t look down the road, you’re choosing to pay later. You save some time and effort reading and thinking. Whether you know it or not, you’re gambling that by sheer dumb luck, you’ll choose the best or at least a good time to buy. If you lose that bet, you get blind-sided by technological and/or pricing changes. You can choose to pay that price, just know there is a price to be paid, sooner or later, and the odds are, the reason why you pay it is not “I didn’t know” but “I didn’t want to know.”

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