Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Keith Feral who wrote (1308)	9/6/1999 2:50:00 PM
From: gdichaz	Respond to of 13582

Keith: Suggest you reread Mike's posts. Both of you are trying to do what is extremely difficult if not impossible IMO. Right now is probably about the most difficult time in the Q's history to try to assign value numbers to the Q or do "value analysis". Note that Gregg has been careful on that front and so was Mike. The obvious problem is that the "base" is hard to define. And the "growth rate" is very difficult to predict. As an old economist I have to chuckle. An economist would have no problem with a "forecast" in these circumstances. The joke of course is that such a "forecast" for an economist can be based on any assumptions - real or unreal. All that matters is that the "assumptions" be clearly stated and then the "model" run. The "model" can be elegant or simple, but the predictive power in the real world is close to zero. Suggest math manipulation re the Q at this point in time is a great intellectual exercise and may give some useful insight, but think that a qualitative analysis (looking at the fundamentals) may be a better way to go. But I look at this a little different than Mike does and it looks like you do. Good luck and good "valuation" Chaz

To: Keith Feral who wrote (1308)	9/6/1999 4:20:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 13582

Keith, I'm not debating with you what the estimated earnings will be for QCOM. I laid out the exact methodology that I used to arrive at numbers in response to Brian's questions. Anyone can change those numbers or the methodology as they see fit. This isn't a debate. In the last day or so when the stock hasn't been trading and after seeing my post, you have gone from publicly stating that Qualcomm's PEG is 0.20 to stating that is 1.00. You haven't shown how you arrive at the figures. Disagree with mine all you want, and I mean that as a sincere invitation, but remember that you and everyone on the thread are able to disagree or agree with me because I've provided all the parameters and the methodology. You haven't given us that benefit, nor have you explained the sudden change in your mind. Take a look at the PEG ratios for CSCO, LU, MSFT, SUNW, and other big cap tech stocks. They are all trading above 2. As I mentioned, I don't dwell on them. And I can only remind you that your PEG ratios are subject to change. Until we arrive at an understanding of how you calculate the PEG ratios, discussion of your impressions with them are moot. Don't you think it's strange that QCOM has 4 times the growth rate of most of these tech stocks with half the forward PE? Not at all. Qualcomm is not nearly as established, doesn't have nearly the long-term track record, and isn't nearly as well known in the investment community as the other stocks you mention. That's part of the inefficiency in the stock market that I believe will continue to inure to your and my benefit. You don't have to convince me that Qualcomm might be an exceptional value. I'm a long-term holder. But if you were trying to convince me, changing the PEG from 0.20 to 1.00 on a public forum without explaining it wouldn't do the trick. --Mike Buckley