Hey, don't worry--I'm just the pot calling the kettle black. I own SDLI, which has a trailing PE of 460. LOL! The market has shown it will support high values for the leading growers in the leading growth industries. Everything else is yesterday's news and gets taken out and shot.*
I am curious what you think QCOM's 3-5 year growth rate will be (EPS, revs for QTL, QCT). I am beginning to think IJ's concern over delays in a W-CDMA rollout may be more than just wistful longing for a bigger cdma2000 market.
The carriers are already extremely leveraged, and there is righteous doubt of their being able to finance the 3G buildout according to what may be the most convenient schedule for QCOM.
Every schoolchild knows that there is a yawning gap between corporates and Treasurys in these Hard Times....one possible reason is the anticipation that carriers around the world are going to flood the bond markets with more paper than they can shake a stick at, resulting in a general glut of corporate issuance. And as supply rises relative to demand, corporates become cheaper, which is to say yields go up. The carriers will have to deal with the vicious circle of High Yields, which begat Poor Returns, which begat Slower Rollout. Whether the consequences of such have been sufficiently reflected in the stock prices of any equipment makers banking on a rapid 3G rollout remains to be seen. But that might be one reason why interim solutions (e.g., GPRS) will carry weight.
*The real problem with today's market is that it breeds a kind of cynical investor who's just in it for the money...who whines about the expensive prices of stocks out of one side of his mouth even as he cynically plays the Keynesian beauty pageant game by aggressively buying the hottest stocks when the market takes a dive. That kind of character probably hopes stocks will plunge further in a self-exacerbating margin-call spiral, just so that he can double-dip. How un-american. |
