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The only way Ericsson is ever going to grow at a 20 percent rate is to employ CDMA technology on QUALCOMM's terms. As to the action of QCOM in the market today, I think it has nothing to do with Ericsson and everything to do with the Morgan Stanley downgrading of IBM and the entire computer/technology sector last Friday, followed by similar downgrades on numerous computer/semiconductor stocks, on the simplistic assumption that the market for computers, semiconductors, and similar technology is the same as the market for telecommunications equipment. That is a very simplistic way of looking at things, typical of those who may know a lot about finances, but relatively nothing about technology in general, and CDMA in particular. When you get a general selloff in one particular sector, that's when I look for buying opportunities. I never recommend buying QCOM except for the long term, because there is so much volatility that the average investor can only hope to make a good profit by going long. I would suspect that the immediate reason for the drop in QCOM is shorting by traders. Once the charts show a little support, those with a short position will quickly cover their shorts, creating a sudden upward movement in share price. This is too risky for options traders, but still, if someone wanted to try options, I would suggest a May expiration date - after the next earnings announcement, and probably after an announced split. Art Bechhoefer |
