I've already come to regret my comment earlier today about mind-boggling Qualcomm info. I want to be the last person on the planet to be considered a purveyor of hype. However, I've had such a strong interest from people PMing me that withholding the information or keeping it somewhat private at this point risks contributing more hype than mentioning it publicly.
Warning: This information, though mind-boggling to me, might be hugely uneventful for many. Frankly, there's nothing that I would prefer more, so PULEEEZE feel free to disagree about its importance!
Before the information, a review of the background.
When I posted the results of my round of Qualcomm research a week or so after the Ericcson deal was announced, I included a study of what happened to Cisco's stock in the nine years following the start of Cisco's tornado. In the first five years following the start, the stock increased at an average 99% rate. In the nine years following the start, the stock increased about 93% on average.
As a reminder now using post-split numbers, if Qualcomm's stock performs as well in the first nine years of its tornado (beginning April 1, 1998), the stock will get to a little under $5000 by April, 2007.
Now the so-called mind-boggling information I wish I'd never mentioned.
Qualcomm is now just shy of 1 1/3 years into its tornado (by my current definition of the start of the tornado). Assume the price at the end of the month is the same it is today, about $175. In those 1 1/3 years, the stock has increased at an annualized rate of 319%.
If Qualcomm's stock is to match the success of Cisco's stock, it must be $811 three and two-thirds years from now. That may sound like a lot. However, the stock's growth can slow to "only" 52% annually and still match the past success of Cisco's stock at that five-year benchmark.
Just months ago (before all the news about Qualcomm's pro forma performance sans the infrastructure business) the reaction to my research about Cisco contained more humor than serious contemplation. Aside from the fact that many of us think Qualcomm's market might have more potential than Cisco's market, the idea that Qualcomm's stock might do as well as Cisco's over really long periods required that the bull market remain in place, etc., etc., etc. No one seemed to take my research about the implications of Cisco's past with Qualcomm's future particularly seriously, and appropriately so.
With this new perspective that the Q's stock can still match Cisco's stock while slowing to roughly a 50% annual growth is mind-boggling to me, and hopefully very underwhelming to everyone else. :)
Do me a favor and don't copy or link this post to either of the Qualcomm folders. My concern is that we'll get a lot of people responding who won't appreciate the importance of the gorilla-game context, which is the focus of this post not to mention the entire folder. Thanks for understanding.
--Mike Buckley |
