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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: JGoren who wrote (47881)	11/4/1999 11:13:00 PM
From: cfoe	Read Replies (5) \| Respond to of 152472

<[their] calculations would indicate that Qcom is overvalued at current prices.> Yes, that is what I took from the calculations. And I agree with your conclusion that these measures don't hold up with companies in QCOM's situation. Two more points that I think are relevant to valuing QCOM: Just read a recent piece about an economist with the Philly Fed who according to the article's author has AG's ear. This economist says two things: real growth has been and is being substantially understated (the latest GDP numbers include the Commerce Dept. economists' beginning attempts to address this) and that "real" PE's are closer to the high end of normal, rather than way above the norm as most "knowledgable people" are saying. One of the reasons he sites for this is that much "long-term" investment is being written off as ordinary expense (therefore lowering PE's). This long-term investment is IPR! The product of the knowledge workers, whose cost is a current expense and not a capital expense like buildings. (As an aside, critics of this economist say in defense of brick and mortar assets that they have salvage value! While I find this kind of thinking close to unbelievable, at least it and thinking like it allow me to buy more QCOM at undervalued prices.) Like you indicated, QCOM's main assets are their IPR and the people who create it. Current accounting and economic measurements have not caught up with this change. Second point is that I remember someone on this thread some months ago posted PEG numbers that showed QCOM as undervalued as compared to other growth stocks. I don't know if the writer was using their own growth rates for Q, or if the recent price rise has outpaced their estimates. If that person is still on the thread, could you update your calculations?