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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Mike Buckley who wrote (6033)9/6/1999 2:45:00 PM
From: voop  Read Replies (1) of 54805
 
With regard to Qualcomm, I'm not comfortable using the year-forward nature of the YPEG. The idea of a year-forward PE is that the market feels more comfortable with the track record and stability of larger companies than with the lesser established smaller companies.

Looking at the size of Qualcomm's market cap, I think it's easy to get lured into thinking that the market places Qualcomm in that group of stocks. I think it's still too early (maybe by a year or two) that the market is really thinking of Qualcomm that way. Based on everything I read, most of the market has never heard of Qualcomm, which inherently means that the market's perception couldn't possibly be that it is a stable giant with a proven track record.


Good for us. The market understands only snippets and most everybody I talk to (non-investment types) has no clue about the company at all. This is much more comforting than when my dry cleaner was telling me about Iomega.

Q may not lend itself well to investment metrics...again good for us, as long as they continue to surprise to the upside. But to look at trailing PEG is like driving forward through the proverbial rear view mirror, don't you think?

My simple mind likes the concept of taking the $5/shr forward earnings estimate and plugging in the gorilla multiples between 40-80x, which are now going even higher, according to Stan's report earlier.

Thanks for all your, ahem, wizardry

Voop
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