Qualcomm Incorporated (QCOM) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 170.90

-1.3%

Nov 7 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: pyslent who wrote (111878)	1/30/2002 12:42:49 PM
From: Stock Farmer	Read Replies (2) of 152472

psylent - Now that I've fully accepted pro-forma dollars (ok, maybe not, but let's drop that for a while), the next most significant quibble with such excellent logic hinges mostly on the assumptions. GIGO and all that. In particular, the key "500 M phones per year in 2006" assumption. From this assumption you demonstrate we could see 30% annual return on investment. I'd sign up for that. But here Message 16982922 we see that 500 M is one person's estimate of the total market. Betting that Q gets a 90% margin on 100% of the forecast market is a smidge more optimistic than I find comfortable. What if we take the article's view that 35% is forecast to head Q's way? Which winds its way through the multiplication signs in your logic to give 35% * 125 = $44 p.s. in 2006. Pretty close to 0.00% CAGR from here. That's another also legitimate view. If we ratchet up Q's share to 44% we get $55.50 in 2006, for a rate of return to shareholders of 6%, just squeezing out what I'm getting on my pile of risk free government bonds. Then a fourth perspective. I wouldn't send someone to the asylum just for contemplating that GSM actually picks up or at least maintains market traction in a kind of son of VHS kind of way. There are quite a few conceivable alternate futures in which 35% to Q is way too high, and 0.00 CAGR would look quite nice in comparison to what we might get. So in juxtaposition to the rather good looking 30% rate of return you initially posited, there are legitimate alternative scenarios. Differing only in one key wet-finger estimated number. And which speak to a return rather substantially less than staying in bonds. Or, if you put a price on risk as some people do, a substantially lower return than a zero interest checking account. Not exactly the stuff that would suck the cash from the sidelines. Thinking along these lines might actually trigger a kind of reverse effect. Or maybe that's what's been happening? Food for thought. John

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next