Let's put the 29% drop in perspective...
Like you Mike, I am a long term investor, and questioning it. I have owned Q since 12/97 IPO @9+ (correcting for split) and have been buying ever since. If you look at its spectacular falls:
10/93 41.37 to 6/94 15.5: a 64% drop!!
11/95 47.37 to 4/96 31.6: a 33% drop!
and now
11/97 71 to 12/12 50.7: a 29% drop! (and maybe to 45, a 37% move)
Even with these drops and the present stock price, the compounded annual stock price growth for the past six years to date is 33%!!! Without, for a moment, considering the strong growth phase Q is entering, projecting the past six years growth rate for the next two years, we end up with a 12/99 price of 90. Is 90 unreasonable based on projected earning of $3.00+? That price will give us all a 33% annual return on our present investment.
To get a return of 15% annually, which still beats long term historical stock averages by 3-4%, QCOM has only to be at 67 in 12/99. (With a PEG that Peter Lynch would say mortgage the house for.) Have we reached the point where we are not satisfied with a reasonably secure 15% annual return? I remain with the two thirds of Qualcomm holders that did not sell this past week.
I have been an infrequent contributor over the years but very much appreciate the contributions of all who post on this thread, with particular thanks to Maurice, Chris and Ramsey,the founding fathers.
Regards to all, remember it can't be too easy,
Eric Daniels |
