ron, gigo is in effect (garbage in / garbage out). some assumptions you make, knowingly or not, are as follows:
1. all wireless innovation will revolve around qcom for the next 10 years.
2. the credit bubble continues for another 10 years.
3. the savings rate continues to increase its negative magnitude for the next 10 years (related to 2).
4. interest rates continue to stay low.
5. that the laws of economics are suspended beyond belief.
6. qcom's eps will go from $200 million to $700 million in a year.
ron, i'll bet you right now that qcom doesn't grow 30% a year for the next 10 years. my guess is that well under 0.0001% of all businesses have ever done that.
of course, the market is no longer a discounting mechanism for uncertainty. for those that don't know what that means, things don't always go well and that should reduce the price that is paid for a security.
in this market of financial crack feeding greedy addictions, uncertainty propels stocks higher (eg, the internuts - many of which will NEVER make dime one).
i bet you that qcom doesn't make $29.8 billion in 10 years. i bet you they don't make $700 million this year. send me a pm when i'm right. i'll send you one if i'm wrong.
skewed math? i think using bogus analyst numbers used to pimp a stock as a starting point (especially when fantasy is 250% above current reality) is skewed much more toward skewed math. come one. one year eps growth of 250% when revs are growing 18% and they will lose their handset division?
oh, and motorola has finally developed a cdma, tdma, gsm and satellite chip that they expect will drive their semi growth at HUGE annual rates (can we say tremendous chip - qcom's bread and butter - supply increase all at once?)? i bet you believed dram was on the verge of booming in 1995, too. did you? tell the truth ;-)
good luck.
oh, and last, but not least, $700 mil compounded at 30% for 10 years is under $10 billion - not nearly $30 billion. gigo. |
