Jon,
I think you're neglecting something important in Warren Buffet's message. He didn't say if a particular stock goes down, he said "stock market". Mr. Buffet has an incredible knack for picking great long term winners. If the stock market goes down, that doesn't necessarily mean that a winner becomes a loser. It just means that you get to buy the winner at a lower price. Historically, there have always been upturns and downturns. Neither have lasted for more than a generation, and downturns have historically been excellent times to buy equities with incredible potential gains during the next upturn. This idea is much different than picking a stock and averaging down until it's zero.
Having said that, I do believe that Qualcomm's a long term, Warren Buffet style winner. If so, I also think that, over the next year, most of the current concerns will be addressed. At that time, QCOM should increase both due to increased revenues/earnings, and an increased PE multiple. If the market goes down, that multiple will most likely be scaled relative to the rest of the market giving us another opportunity to buy more of a great company.
Thanks,
Mike |
