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

To: Chuzzlewit who wrote (58177)	12/30/1999 2:07:00 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 152472

ctc, this market is not about analysis. it is about potential and hype. the mere fact an analyst is talking about 2010 when the can't get next month right more than 30% of the time is an indication of this. this is the amazonian style of market analysis (style formerly known as pump and dump). remember the $400 price target out of the blue w/ no supporting documentation? amzn was up 50%+ in a week or so and hit $400. get while the gettin' is good.

To: Chuzzlewit who wrote (58177)	12/30/1999 2:10:00 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 152472

instead of "handsets", try "subscriber devices" of all sorts that can be made wireless. think of 200%+ penetration rates for devices that will be replaced frequently. static analysis of handsets like the phone in your dwelling misses the point.

To: Chuzzlewit who wrote (58177)	12/30/1999 2:10:00 PM
From: Voltaire	Read Replies (3) \| Respond to of 152472

VALUE? Take $10,000 dollars worth of gold and place it on the floor of the exchange with a stock certificate sitting on top showing 100% value. Take another stock certificate showing $10,000 worth of Qcom written on it and ask the buying public which one they want. You are making one of the biggest errors made in Determining Value, WHAT KIND OF MARKET ARE WE IN? There is only one question that need be asked when determining the value of a particular stock, pure and simple - DOES ANYBODY WANT IT! V

To: Chuzzlewit who wrote (58177)	12/30/1999 3:11:00 PM
From: RocketMan	Read Replies (2) \| Respond to of 152472

Glad to see a skeptic on this thread, we can all learn by debating the pros and cons of this company's future. While I disagree with your position, I can understand it, but differ with you on several points: QCOM will face competitors who will try to circumvent its patent on CDMA And Intel has faced the same situation for how long? It has not slowed them much. And Q does not have a single patent, it has multiple patents. It is one thing to try to circumvent, another one to do it in a way that is held up in courts. The one area I would worry about is China, because they don't have the best record for observing patents. CDMA has yet to be recognized as a standard in Europe and China What does it take to be recognized as a standard? Why would a Chinese manufacturer ask for permission to manufacture CDMA phones unless they thought it was the standard to be built to? Why would China allow five manufacturers to develop CDMA, and why would Korean Economy Minister Kang Bong-kyun ask for Chinese permission to help build out their CDMA infrastrucute? Better yet, why would China, with pretty much a clean slate, go to a lesser technology, TDMA or heaven forbid GSM when they can jump into the state of the art? As far as Europe, do you think they would remain in a backwater if and when they saw the rest of the world adopt CDMA? QCOM's future depends entirely on the success of CDMA, which means that a technology developed in the future could obsolete CDMA. True, that is the way technology evolves. But by the time a competing technology makes CDMA obsolete, the 1000 target will seem quaint. If/when CDMA infrastructure is in place, how long do you think it would take for a competing technology to supersede it? Look at TDMA and GSM. Heck, look at Dell, how long did it take for competitors to match the way they built and sold PCs The "analyst" who set off the current buying binge made some pretty outrageous assumptions, not the least of which were: -- 3 Billion hand sets sold in 2010 (about 50% of the earth's population) OK, that assumption does seem stretched to me, for handset sales. But not for device sales. First, 3B is 50% of the current population, not the 2010 population. Let's say that in 2010 the population is 7-8B, so 3B is still a large percentage, but if we are talking devices (cellulars, personal assistants, devices to interoperate with your stereo, tv, car, etc), it is not a 1-1 between devices and people. How many people today have more than one PC, more than one phone, more than one TV. If the average is two such devices per person, that is a penetration of 1.5B out of say 7B population, not as far fetched. The average may well be 3 or more per person. -- a terminal value of 60x earnings (with 3 Billion hand sets sold in 2010 who is left to buy? Perhaps QCOM will be selling hand sets to Martians). Again, this seems too high for handsets, not so for HDR devices, with technology that even in ten years should be in the ramp-up phase. Thanks again for visiting!

To: Chuzzlewit who wrote (58177)	12/30/1999 3:21:00 PM
From: waverider	Read Replies (1) \| Respond to of 152472

Hey Cat! Welcome to the Q love fest! Haven't seen a post of yours for a long time...nice to see ya around. Your analysis is valuable and I hope you continue to make frequent visits. We need some reality checks from time to time...since the time we are in now is BEYOND anything I have ever experienced. Hope you had a great holiday. You scampered away from the oils I presume. Rick <H>

To: Chuzzlewit who wrote (58177)	12/30/1999 3:47:00 PM
From: Boplicity	Read Replies (2) \| Respond to of 152472

Hi ya Chuzz, good to see you over here, we need it. Ok first off, as you mentioned "Black Box" approach. The following question is the big problem we all are facing. How does one value IP? Very hard to do, in fact the only way one can really do it is to take a vote. It's like land. What is it worth? It's worth what the next guy will pay, or what the market will bare. I know it sounds simple, but this is the market we are in. Next, also related to your Black Box. Your use of the following, "I generate a risk adjusted discount rate to apply to those cash flows. I use the following: risk-free rate = 6.5%. I add risk premiums of anywhere from 3.5% (for ultra low risk stocks like utilities) to 30% (for ultra risky companies). For QCOM I use a risk-adjustment of 20% for three principal reasons: QCOM will face competitors who will try to circumvent its patent on CDMA, CDMA has yet to be recognized as a standard in Europe and China; QCOM's future depends entirely on the success of CDMA, which means that a technology developed in the future could obsolete CDMA. Who is using these risk adjustment numbers? What standard body decided on them? I'm sure it's all yours. Until the masses adopt your thinking, it's merely an academic exercise to quantify something, that can't be, unless the masses believe in it. That is why we have markets. Greg p.s. I hope all is well with your wife.

To: Chuzzlewit who wrote (58177)	1/2/2000 11:52:00 AM
From: mauser96	Respond to of 152472

Interesting post. The whole methodology however depends on a set of assumptions about risk premiums. By definition you can't really know future risks. The future is not the same as the past or anybody could make billions in the stock market. Therefore these assumptions are really guesswork, and therefore anything that follows is guesswork too. That's not to say that it might not be useful guesswork, and I would be interested in seeing your work applied to other stocks followed on the G&K thread. I do agree with your statement that today's price is the best estimate of QCOMs worth, because it is the price determined in an open auction. However,in the stock market today's best estimate is is usually wrong tomorrow.