Mucho has been making provocative posts for years often on subjects he/she does not have a clue. If QCOM was making $6 billion a year and growing at 15% a year according to Ben Graham the stock should have a market cap of $200 billion not $40 billion. Enough said.
ROFLMAO. later i will present you with a quote from BUFFETT that says EXACTLY THE SAME THING as what i said. it's reel simple: if you want a 15% LONG-TERM return and QCOM has a $40 BILLION market cap, QCOM needs to earn $6 BILLION today, and every year from now own; or if it earns no money this year (like last quarter), then it needs to earn 15% MORE than $6 BILLION next year; etc.
of course, if qcom actually DID earn that kind of money, it's market cap would likely get bid up much higher in this environment. however, all that means is that the short term price appreciation would be borrowing from future returns, and future returns would be commensurately lower than 15%. if the market cap went to $200 billion, then after that one-time adjustment, future expected returns would be 3%. so in fact future LONG TERM returns from the $40 BILLION level would STILL be 15%, once you factored in the long string of 3%'s going forward.
the whole irony of this is, QCOM has ALREADY been bid up to the point where earnings are less than about 2% of its market cap. the one-time adjustment based on prospective higher earnings already took place three years ago. so this discussion is the same one we'd have if qcom earned $6 billion and had a $300 BILLION market cap, and i said they'd need to earn $45 BILLION a year to have a 15% return, and then you said if they earned that much they'd have a market cap of $1.5 TRILLION...to which i say...
ROFLMAO! |
