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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (341)	7/29/1999 1:58:00 AM
From: John Stichnoth	Respond to of 13582

Re: "fully valued"--if I might paraphrase, is an appropriate price based on expected future earnings. May I suggest you refer to The Gorilla Game, if you haven't already? Terrific distillation of the power that falls to the winner in a war of proprietary standards. One of the points made is that the gorilla's forward earnings are consistently underestimated by analysts. This has now happened for two quarters with the Q. And analysts are still underestimating 2000, clearly. Other issues with a gorilla are that it becomes the preferred partner with others. We've seen evidence of this happening (Msft and wireless knowledge, eg.; Loral and Globalstar). Also, the gorilla is able to impose its standards on future developments and adjacent developments, to its own benefit and to the detriment of challengers. The Q is doing this, too, in 3G. And eventually, as the gorilla is recognized as such, its PE expands beyond its competitors. All of which suggests that your 2000 earnings estimate of $4 may be light, and you may have to apply a higher PE (60 rather than 40 at current market levels?). Which gives a fair value of $200+? Glad to get things back on topic. <g>