Tekboy and all,
Second, it's worth stressing that the dip we've witnessed is far greater than anything we were supposed to be prepared for, so cut us some slack.
Okay, I'll give you some slack.
But when the prices went up far higher than you were supposed to be prepared for, why be bothered when they fall farther than you're supposed to be prepared for?
For example, we commonly heard it said around here that our gorillas might--almost certainly would--tank at some point. As much as 40%, in fact, like the blessed Cisco in Sept 98.
When Cisco tanked 40% in 1998 and I think a year or two before, it was a much more mature gorilla than Qualcomm is today. The company had already gone through four tornados that had been discussed a lot in the thread. It's understandable that Qualcomm, being a much younger gorilla, might tank a lot more than 40%.
Just for the record, it can happen again over and over until Qualcomm becomes a much more mature and a proven gorilla in the market's eyes. Those of us around here understand Qualcomm's strength, but most don't. That's why the crap that PNRT might be bad for Qualcomm that makes sense to those who don't understand it is nothing more than utter nonsense for us. Until the market understands Qualcomm like we do, expect the stock chart to look like a roller coaster.
or GMST from 107 to 65. It was when they dropped another 50% from there that I got flustered. Nobody had told me about that second hit!
Ahem. Read my keyboard: For the umpteenth time, Gemstar's product has not gone into a tornado and thus, by definition, Gemstar is not a Gorilla.
Therefore, Gemstar can fall 75% to 90%. That sort of thing happens even when indexes don't fall 40% as the Naz has done.
Also don't forget that the real reason I've always said I like the business model is not because of its potential Gorilla status, but because of its potential Godzilla status -- the advertising and t-commerce revenue. That's a whole new realm that all of us are new to. All bets are off when it comes to comparisons with historical performance because the Internet changes everyting and Gemstar's greatest revenue potential comes from convergence of television and the Internet. We've seen Internet stock after Internet stock tank 80% in the past and it should be no surprise that Gemstar, being referred to as the portal between television and the Internet, is just as susceptible to it as the Internutz. (I'm not suggesting that Gemstar is in the risk class of the Internutz, but I don't think most investors understand that it's not.)
Here's something to chew on: I won't be surprised if Siebel falls farther than the 40% it's fallen. Maybe the reason it hasn't fallen farther is because Oracle, much more of a bellweather stock, has only fallen 25%. I dunno. I don't predict short-term movements.
And I wouldn't want anyone to think that 40% is some sort of magic number. It was just one example using Cisco. Nothing more. More over, the implication was that if a company as powerful and highly regarded as Cisco could fall 40% repeatedly as happened, other less regarded companies might suffer worse fates. If that wasn't inferred, sorry we didn't stress it enough.
--Mike Buckley |
