Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 166.05

+0.6%

Nov 19 3:59 PM EST

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To: Kayaker who wrote (66167)	2/7/2000 12:28:00 PM
From: Skeeter Bug	Read Replies (1) of 152472

>>Let me see now... a t-bill growing at 6.5% per year will outperform a company growing its EPS at 50% a year. Huh?<< the math is exceedingly simple. let's assume qcom's market cap is $100 B for ease of calculation. let's also assume a HUGE IRA account - again for ease calculation. the first year the tbill earns $6.5 B and qcom earns $750 M. next, multiply $106.5 B by 1.065 and $750 M by 1.50 for year two. after two years the tbill is already up by over $10,000,000,000. including tax consequences for the t-bill and giving qcom a market cap of $80-90 B instead of $100 B will close the gap somewhat. but, the growth assumption are extremely aggressive as denoted by qcom's apparent choice to manipulate inventories to "make" this q's number and HOPE next q does better. in addition, this assumes another company doesn't unseat qcom and make them obsolete - the question really is when, not if. oh, and the t-bill money is GUARANTEED - even during a recession or re-valuation of the bubble market.

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