>what do you think of this post?
Message 11236436
Interesting, but what do you think? I guess, as Gorilla Gamers, most of us do hold shares in Cisco which would diminish our risk while also holding shares of Qualcomm. I am certainly in belief that both companies are well positioned to benefit over the next few years. I am a little skeptical about the post myself.
I hope that we can all put a few things in perspective in regards to the share price of Qualcomm going from 198 down to 153 (or wherever it ends up being). It has been quite an emotional roller coaster ride for the market in general if you rewind yourself to 1996/97 and then play through to the current date. The appearance of many 'Godzilla' stocks, the extreme highs/extreme lows caused by FUD, interest rate worries, various international implosions and what not. Then our 'manual' comes out - two of them in fact. We learned, or rather validated, our reasons for holding Microsoft, Intel, Cisco, Oracle, SAP and what the underlying fundamentals of a company like Qualcomm really means as a portion of our portfolio. The momentum in and out of various Godzillas and - to borrow Jim Cramer's coined phrase - "The Stocks Everybody Loves" has been daunting if not amazing. Think of stocks like Amazon, AOL, DoubleClick, EBay, Dell, RedHat, Qualcomm, Intel, Brocade, JDSU, Cisco and many others. We know they are not all in the same game, but that doesn't stop the roller coaster from happening. There is no protection if you are in the Gorilla Game, Royalty Game or Godzilla Game from such moves. All are equally hit in both directions.
Put a few things in perspective. I apologize if some of the numbers are just approximations, but most of them I am well aware of since I follow and have participated in the cycle.
DoubleClick runs from about 20 up to 175 then back down to 70 when the Alta Vista deal is done. If you think going from 198 down to 153 is fun, try going from 175 to 70!!!
Amazon runs all the way up to $220 before dropping down well below 100 (pre split).
America Online runs up to $170+ before dropping down to the 80's.
Intel runs up to $142 earlier this year before dropping back down to below 100. (pre split) Now we stand well above the earlier high. The recent dip in QCOM has yet to match how far Intel fell......
Dell makes a huge run over the past 2 years up to 55 before cooling off to the low 30's when many thought 'life was over in Round Rock'.
Cisco goes from 20 to 70 in less than a year's time. Wow!!! John Chambers.
Whether they are Godzillas, Kings, Princes or Gorillas - the volatility is certainly evident in the market. Plenty of people chasing the quick gain and plenty of people making money as the stocks are running up as well as running down. Plenty of rumors, noise and fire to help create the buy side and sell side of each issue - as well as the entire market. The entire market has not been too healthy over the past two years. I think we can agree on that. The hit tunes have been the market. It's no wonder so much money has been focused in and out of the hit tunes. They are 'the market'. Qualcomm is now a hit tune as well as all of the gorillas, kings, princes and godzillas that we love.
Regardless of our long term views on our stocks - people will always be taking their profits, acting on the noise, FUD and momentum of each stock. That's part of the 'big picture' that we have to be aware of and get 'comfortable' with over the long haul. Rewind the tape back to 1990 for Cisco, or 1986 for Microsoft. The revised edition of the 'manual' states this on the inside of the front jacket cover.
*$10,000 invested in Cisco back in early 1990 would now be worth $3,650,000
*$10,000 invested in Microsoft in 1986 would now be worth $4,721,000
*$10,000 invested in Yahoo! in 1996 would now be worth $317,000
We could even add this for our 'baby' Gorilla:
*$10,000 invested in Qualcomm (at the 52 week low of $19) would now be worth $80,500
How about if we contrast those numbers with the inside jacket cover of the first edition?
*$10,000 invested in Cisco in 1990 would now be worth $1,285,000
*$10,000 invested in Microsoft in 1986 would now be worth $1,800,000
That's quite a move for these two between editions. That Internet is quite a Gorilla.
Keep it all in perspective and know how to handle the FUD, noise, rumors, ups and downs of a market focused on the 'hit tunes'. Plenty of us remember back to all the noise, FUD, rumors, ups and downs of the market from 1986 to present. Nevertheless, the GG advantage of holding those famous stocks is certainly evident. Imagine the power of those numbers had it included buying more shares on the dips? Think about that when noise and stock price swings create fear and remove focus from why we have our chosen portfolio cornerstones.
After all, we do want to sleep at night while our wealth is appreciating.
BB |
