Indeed, patience is the toughest part, especially when you have given back 800 points worth of split adjusted gains. There is a funny sense of urgency that makes you think that you need to be doing something to control the situation. You begin to think, "I gotta sell covered calls, complete another round of due diligence, revise my EPS growth model."
Blah, Blah, Blah - nothing ever seems to work. It reminds me of CSCO sitting on its but back in 1994 when the NASDAQ had it's last tough year. The stock tanked to $20 and looked like it would never recover. What an opportunity that turned out to be.
Investing is the ultimate endurace activity. The race lasts 6 1/2 hours a day for your whole life. There is no way that I would give up now as the FED is nearly done increasing interest rates (the prime is at 9 1/2 % vs 9% in 1994.) Double digit martgage rates seem imminent if the Fed goes any further. It seems truly undemocratic and patently absurd for US citizens to be charged over 10% for their mortgage given the strength of the economy and the decreasing Federal debt.
I would like to take a brief moment to protest the Fed's unneccary intervention in the market. Doesn't Greenspan realize that every time he imagines an inflationary threat and kills the stock market, he is adding to long term inflation by reducing the productivity output in the economy. AG hikes rates, the market crashes, and the cost of capital gets so high that young companies in need of capital get engulfed by the industry giants.
The inevitable M & A activity eliminates layers of competition in the economy. This wave of consolidation is just beginning now and we will see proportionately fewer companies competing with each other in a few years. Look at what is happening in the food industry right now. My God, the consolidation of the oil industry is enough to make anyone puke.
Ironically, the lack of competition that Greenspan creates gives the big companies more room to increase prices and set higher inflation once the dust settles. I may be the only poerson in the world that thinks that AG has no grasp on the definition of inflation. The whole concept of raising the price of capital to contol (perceived) rising price levels has no merit in reality.
Sorry for the regression, AG policy of manipulating interest rates is very counterproductive.
Anyhow, with the Fed done with interest rate hikes and the introuction of new 3G spectrum in Europe and Asia, the new cycle for wireless equipment should help delver excellent results for the 3G UMTS based networks. I'll continue to add to my position at these levels. I have accumulated enough new shares to be in a much better position when QCOM becomes a momentum stock again. I would expect that to happen when QCOM and NOK work out a chipset deal. |
