Limtex, with all due respect, greed and impatience are dangerous adversaries of wealth creation. If you had bought QC's IPO, and gone into a cave, you would have compounded your capital at roughly 30% per year to date. Not astronomical relative to the market's recent performance (and many investors' overblown expectations), but hardly a poor investment. Depending on when or where you bought the stock during ensuing periods, your annualized return could be much higher or much lower. Fine. But whining about the stock's "resilience" or plaintively stating that its home is "in the forties" is just plain silly, as are comparisons to Nokia or Ericsson.
Since nobody is compelling you to invest in telecom equipment, you could just as easily compare QC to Yahoo, Hewlett Packard or Eastman Kodak. The sector is less important than the stock selection process. However, with regard to Nokia (or Ericsson) versus Qualcomm, I would argue that you are comparing apples and oranges. Nokia and Ericsson are today reaping the rewards for their development and successful commercialization of GSM. They have fought a good fight and created successful worldwide digital standard and their investors have been well rewarded for their companies' good execution. The CDMA-TDMA debate is important because it transcends near-term stock performance and relates to the product cycle for the next decade.
If you believe as I do that the air interface for mobile telephony is converging around direct sequence spread spectrum (i.e. IS-95 or W-CDMA), then QC should prove to be the superior investment over the next ten years (point-to-point). Nokia and Ericsson will navigate through the technological fork in the road, but their valuations already reflect their operational success and a fairly high degree of forward expectations. Qualcomm's valuation (on an absolute or relative basis) is lower and currently reflects a dismal level of investor confidence. The dichotomy between the company's internal realities and external perceptions should prove a material accelerent to appreciation once the company's fundamentals turn the corner.
My venture capital experience has repeatedly taught me that the road to success is rarely linear and new technologies ALWAYS take longer to commercialize than their adherents expect. South Korea is a good example of one of the "bolts from the blue" that start-ups have to deal with. So be it. While I am disappointed when QC stumbles, in my mind, it's all part of the commercialization process. So my attention inevitably turns back to whether or not the "stumble" has impaired the long-term economic opportunity. If you don't have the stomach to understand what you own, and why you own it, I suggest you invest in something less volatile. But only a short-term oriented momentum investor would suggest that the debate between TDMA and CDMA is meaningless, since resolution of this debate will profoundly impact the long-term industry fundamentals. |
