Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 166.31

+1.8%

11:50 AM EST

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To: Ruffian who wrote (45120)	10/18/1999 10:21:00 AM
From: Jim Willie CB	Read Replies (3) of 152472

synopsis of Galvin interview in Barrons Tom Galvin is chief equity strategist at Donaldson Lufkin Jenrette... he is also on my Genius List I know you posted article in full somewhere, but I wanted to put a brief sysnopsis what stock market bubble? - average NYSE stock is down 25% from 52wk highs - avg S&P100 stock is down 17% - should limit additional downside - for last year public has been shifting money with abandon into money market - any bubble to point to now is in money funds [fuel for stocks] - NYSE deeply oversold now, comparable to late summer of 1998 - Dow 30 Return on Equity is double what it was in 1980's - justifies higher PEratios - brokerage stocks have take a 60% hit Past bear markets - 1970's fiscal stimulation, rising inflation, oil crisis shock, none here - 1970's commodity markets and tangible assets syphoned money away from financial markets - past recessions saw huge excess inventories worked down, accompanied by layoffs and price cuts, affecting profits - now we have emerged from two years of difficult times in global economy current economic conditions are very strong - our economy undergoes rolling recessions that hit individual sectors in rotation - rather than recession of entire economy - info technology permits companies to carry less inventory and link business plans to orders quickly reasons for inflation to remain subdued - global excess capacity will persist - cap utilization is now 80%, which is lower than in 1994 at 85% - euro currency will stabilize European pricing and improve efficiency - [15-20% of all European GDP used to be related to currency translation] - internet is having deflationary impact on many businesses - consumer revolution is underway with discounters at the center - we are in early stages of a cyclical profit recovery that began in late 1998 and still has 2-3 years to run - little of higher producer costs can be passed on in form of higher consumer prices since competition is intense - expect higher oil and other supply costs to begin to subside and even rollback productivity is likely to continue growing - we import labor intensive products - we export value added products - investment in equipment is a trend to continue - internet allows carrying of less inventory - internet cuts input costs of supplies - y2k investments will pay huge dividend next year in productivity global market will allow market share expansion for winning companies technology has seen proven unit growth - technology is 24% of S&P500, likely to grow to 30% - telecom, dugs, medical product sectors are likely to be leading growth areas expect a "market meltup" beginning toward end of year when y2k fears are behind us - stock market has seen some characteristics of a selling climax - double bottom in progress from Sept29 lows - downside risk of 5% from here - upside potential of 20% by yearend - expect profit gains next year of 12% generally - expect 10-12% profit gains in y2001 - compression of profit margins will be offset by unit growth in the healthy sectors / Jim

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