Complete ignorance? Hardly
No, Mq, this guy JS is talking out of complete ignorance. the company has $2.4 billion in cash and marketable securities. They also have $2.0 billion in investable assets in QSI. They also have $1.0 billion in fixes assets & 0.9 billion in inventory. That is a total of $6.3 billion in total assets.
The company has 6.3 Billion in assets. Very observant. But in your sums, did you forget about the 1.2 billion in liabilities? Or do you suggest we just ignore those?
Leaves 5.1 Billion for the pickings if we aren't to be ignorant.
Did you forget about the 4.8 Billion contribution by shareholders? Or do you recommend we remain completely ignorant of this as well?
Leaves 0.3 Billion in wealth creation. And peeking into the assets we see 0.5 Billion in "goodwill" right off the top. Which does not appear obvious anywhere in your sums. A mistake, or more ignorance? Or purposeful obfuscation?
It seems that a very objective look at the facts shows that in its entire life, the company has managed to convert 4.8 Billions in shareholder cash into 4.6 Billions of stuff and 0.5 Billions of blue-sky hopes and dreams goodwill.
Which it also seems is something that QCOM investors had, and still have, in abundance. So those of us who aren't ignoring the details of the balance sheet are left wondering what wealth the company has *actually* created for shareholders. Not in one of many possible alternate futures, not in the last week or so, but over its entire life.
And just because these 4.6 Billions might be invested somewhere by the company for a profit-to-come-any-day-now is hardly a claim. Shareholders could have taken their own 4.8 Billions and invested directly in the same stuff that QSI holds. Or perhaps more safely in a mattress, given the past track record. Or flooded the USPTO with 4.8 Billions worth of patents. Or some combination of above.
And while we are speaking of opportunity cost, 4.8 Billions invested in 10-year T-bills for the last three years would have generated 0.0 Billions in hopes and dreams and 0.9 Billions in cash. Which is superior (in some people's eyes) to 0.5 Billions in hopes and dreams and negative 0.2 Billions in cash.
These are facts. Whether you like them or not. And they remain on the table, whether you choose to ignore them or not.
I am not saying that the future of CDMA is dim or bright. Nor am I conjecturing about whether it will win or lose in the marketplace. And I am not claiming that the wealth of a treasure trove of patents is or is not worth billions. These are all positions of ignorance to one degree or another, given that we really can not see very far into the future.
I am merely observing that the *theory* of untold riches just over the horizon has been with us for at least three years now without any measurable *results*. Except that the horizon remains in front of us like a carrot on a stick.
In other words, I'm observing that the company has zero dot zip in the way of track record of *actual* wealth creation behind it and only blue-sky hopes and dreams in front of it. Which has been characteristic of the company for some time now.
And which was fine when the market was paying for blue sky. Perfect, indeed. But now it seems that the market is paying for results. And sadly Qualcomm doesn't have enough to show. Where the term "enough" is measured on the only ruler that matters: against the market, by the market.
Sure, the results may be in the future. They darn well better be, or shares are suddenly worth south of $5. But if we want to know why the share price is doing what it is doing and project where it might go, all we have to do is open our eyes and note that hopers and dreamers with both the inclination and cash to place bets on more hopes and dreams are amongst a growing minority in the marketplace.
The law of supply and demand takes over from there.
Me, I'm a hoper and a dreamer too. I'm not short QCOM or betting against it like others. But I'm not long either. And I'm not here mocking folks who have lost piles of money. Or here reminiscing about how wonderful our investments have done in years gone by and pining for these lost days.
I am just here to engage in objective commentary on what is happening to an icon of the tech genre. Trying not to get caught up in the depression of doom and gloom, and also trying not to have my hard-won wealth vacuumed out of my portfolio by remaining obliviously optimistic.
And so I have taken what I believe to be an objective view of the market. And tried to explain why I hold it so that when I am incorrect that others might help me see things differently. And perhaps do the same service to others if the shoe belongs on the other foot. Quid pro quo.
Feel free to shoot the messenger. Mistake me for the message. Rant and rave against the economic pain that the market must be doing to your portfolio. These I understand, because it's tough to see the market turn against what we believe. Been there. Have the scars.
But in all of this, it is hardly appropriate of you (of all people) to slander others with the word "ignorance". Particularly not when the market has been rather relentless in validating a point of view that you do not seem to share nor seem to want to acknowledge. |
