Mq, QCOM has been a terrible investment for anyone who bought it precisely ten years ago. If you factor in inflation and the diminished value of the dollar over ten years, it has been a miserable investment, yielding negative returns. If anyone bought in the high 20s and low 30s in 2008, they have done very well. However, that applies to just about any stock, proving the old maxim, buy low.
I was tempted then, but didn't do it. Should have.
Because you were early, very early, you have done extremely well with Q over the very long run. However, the last few years have seen the value of your investment diminish. The company has matured, the law of large numbers applies to it, management loves to waste your money, there is competition, it has had terrible lawyers who will throw away your money on 'sure things,' etc. None of these imponderables apply to gold. Simply keep your eye on a global fiscal and monetary trends, apply a few well-known rules to which gold adheres quite consistently, and you should have an answer as to whether it will continue to rise or not.
Application of these rules tells me that gold should continue on its bull run. In fact, I think it will go parabolic when a global gold mania hits in 2012 or 2013. My plan is to then partially exit gold for who knows what (probably some high yielding, high value real estate in some beautiful place or other, Hawaii, the Rockies, etc.) for I know that parabolic rises always result in crashes.
My end of year target for gold is 1800.
Why? Global monetary and fiscal follies continue. Kicking the can down the road - to use a hackneyed cliche - seems to be the gutless policy response around the world. The bottom line is that everyone is drowning in a sea of debt and no amount of finagling of terms and rates can hide the fact that this debt has to be re-structured on a near-global basis. Part of the policy response has been to increase the amount of currency in circulation and keep interest rates at ZIRP rates. This is excellent for gold, though not so good for the public.
I am very concerned that when it does hit the fan (and it may be sooner than you think, see my post on how the bond vigilantes are laying their traps, as shown in the increase in rates for CDS 'protection' on sovereign debt for the US, China and Japan), it will be a complete surprise to policy makers, resulting in the kind of failed policy responses we saw in 2008-2009, i.e., more debt, more stimulus, more bail outs, cash for clunkers, etc.
You don't really think that the kind of ill-tasting medicine which will cure the patient will be prescribed in the US during a Presidential election cycle, do you?
All of which bodes well for gold.
Back to QCOM.
In the last 5 years Q has gone up about 50% while gold has gone up 150%.
finance.yahoo.com
This is not to say that good things cannot happen. IDCC, which I loved to deride when I was Q-blinded, has had an incredible run. I should have looked at it more carefully rather than take a stupid ideological position. I was right, however, about Nokia, which is headed for reverse splits, BK, etc.
Live and learn. |
