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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 172.80-3.5%10:41 AM EST
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To: Jacob Snyder who wrote (90962)5/7/2010 10:48:08 AM
From: Jacob Snyder4 Recommendations  Read Replies (2) of 196519
 
QCOM's range has been 36-48 since 2004. Moves above and below that range have been brief, for the last 6 years. This suggests two simple ways to make money:

1. Short around 48, cover around 36.
2. buy around 36, sell around 48

...and one way not to make money: LongTermBuyAndHold. Actually, going all the way back to 1999, BuyAndHold has been punished by the market.

Given that stock valuations are inversely related to interest rates, and we ended a 27-year decline in interest rates in 2008 (so, probably the next 27 years will see rising interests rates), BuyAndHold will probably continue to be punished.

At 36, QCOM has a PE of 36/1.77 = 22. If I subtract the net cash from the stock price, I get a PE of (36-11)/1.77 = 14.



disclosure: no current position, but very close to buying.
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