Bux , Here's one of Gregg's post's regarding splits. As you can see by his comments he doesn't place to much value on splits and shares his values on how investing for splits has many pit falls and dangers.
You said : I'm not sure why you posted this here since it appears to be primarily of interest to Q investors but I don't know that it is possible to respond in a forum different from the original post so..
I posted it here because as you know a post like that in the Q forum is cause for be-heading. I like to see long timers like you visit this forum because it shows you have an open mind ? The great TDMA/CDMA debate in the Frezza forum actually hurt investors. Many chose sides and stuck with one or the other? Plain and simple it was stupid because there was only two sides and both won. You and a few others love busting Tero's nuts and try and pick apart some things that he posts. If we are honest and look back over the past, who was right first and for the most years? No one can disagree on the performance of the Q over the last year but can this type of performance continue 5 years in a row ? Everyone who posts will someday regret a post and that?s only human. Check the included post by Gregg on the handset division. I think he would love to eat that post but it's forgotten by all because of the glory? If we honestly look back at it and consider the handset division was of value to Gregg , praytell why are they dumping it ?
Gregg said Sell the handset division? Pray tell, why should the company do that? Hopefully not because some (still) misinformed analysts would prefer simpler spreadsheets!.
I'm not looking for argument over the Q or Nokia I'm just saying give the Devil his due who ever he is? Gregg and Tero both should be judged on their recommendations over the years because their both winners and have shared with all and we all benefited .
To: Gregory Mullineaux who wrote (27266)
From: Gregg Powers
Friday, Apr 16 1999 11:17AM ET
Reply # of 48620
Gregory:
To be candid, and I am NOT trying to be snide, I find it very scary that people believe a split to be economically meaningful in the first place. If a company is worth $100 (not $100 per share, but a total of one hundred dollars) and has 25 shares outstanding, then each share is worth $4. If the stock splits two-for-one, there are now 50 shares outstanding, each worth $2. Nothing at all has changed. That people get exited by 'a split' is suggestive of just many naive and unsophisticated investors have jumped into the market.
Even worse, in my mind, is the people who understand the former, but cynically buy stocks in anticipation of splits because they are sure that somebody is stupider than them. Greater fool investing, in any form, remains dependent on that sometimes elusive greater fool. This stock market party will turn very, very ugly when the music stops. I am VERY distressed by the pervasive arrogance and greed I seem among many investors. Investment timelines, which were probably too short to begin with, have been further compressed from months, to weeks, to days, and now to minutes....companies that employ thousands, earn hundreds of millions of dollars, are routinely classified as 'dogs' if their stock fails to appreciate hourly. To wit, I was recently at an investor conference where investors excoriated the management of a company...because the stock had failed to keep pace with the market FOR THE LAST NINE MONTHS. The stock market is turning into one giant online lottery and its participants perceive it to be a no-lose game. Sadly this is not a new phenomenon; Holland had its tulips; the late 1920s had its electric utilities and blind pools; we have Internet traders trading Internet stocks.
Sorry...didn't mean to vent my spleen at you...but it seems to me that the lunatics are running the asylum, and seem ready to expand the facility to accommodate the entire population.
Best regards,
Gregg
To: marginmike who wrote (27281)
From: Gregg Powers
Friday, Apr 16 1999 1:26PM ET
Reply # of 48619
Jason:
We are a modest sized ($2.5 billion) institutional investor and, I for one, am sick to death listening to people talk about 'float' (I am directing this at my industry, not you Jason). The "float is too small" argument is the biggest pile of crap every to come down the pike. Do you know what an institutional investor really means when he says the float is too small? He is really saying that he has no confidence in his analysis, so he wants the stock to trade well so that he can get out in a hurry if he is wrong. I would rather take the time to understand what I was buying in detail; to understand why it is undervalued; what is going to change; how the business going to evolve etc. Then we can make an investment with a three-to-five year timeline...and not be worried about float or liquidity.
I LOVE STOCKS THAT TRADE POORLY. Remember when Qualcomm barely traded 600,000 shares a day? Liquidity was relatively poor for a $4.0 billion market capitalization. The institutions were disinterested; the sell-side analysts didn't understand the story; retail investors either hadn't heard the story or didn't believe it. Bang. Now that the stock is liquid, and trading like water, its stock is three times higher. That's one hell of a price to pay for liquidity.
I place a very low value on liquidity and/or float.
Again, enough pontificating.
All the best,
Gregg
To: w molloy who wrote (27141)
From: Gregg Powers
Thursday, Apr 15 1999 12:35PM ET
Reply # of 48619
Sell the handset division?
Pray tell, why should the company do that? Hopefully not because some (still) misinformed analysts would prefer simpler spreadsheets!
I presume you realize that Qualcomm has a substantial embedded margin advantage in handsets? You recognize, of course, that the company does not have to 'pay itself' royalties? On top of this, everybody else is either buying ASICs from Qualcomm (the margin on which QC again does not have to 'pay itself') or is spending a fortune (on a fully allocated, unit cost, basis) to develop their own chip. Given these dynamics, QC should have an embedded margin advantage somewhere between 500 and 700 basis points....which is roughly twice the operating margin achieved by MOT its entirety last quarter. After some annoying fits and starts, the team of Jacobs and Dollard seem to be making lots of progress. My vote would be to let them do their thing.
It amazes me that Dr. Jacobs has brought us this far and people still doubt his judgment. Oh well.
Best regards,
Gregg |
