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

To: JGoren who wrote (6469)	2/13/2000 8:12:00 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 13582

I'm always quite skeptical about S&P recommendations, especially when it comes to stocks suitable for individual investors (as opposed to institutions). Stovall and S&P don't have all that great a record. So I'm doubly pleased that QUALCOMM was not in their list of recommended stocks, for fear that if it was, the stock would become overpriced. Here's an example of why I'm skeptical. They like Vodafone AirTouch, which is on its way to becoming the largest wireless service provider in the world. This is happening because VOD is paying top dollar for Mannesmann. VOD will generate cash by issuing more stock, issuing more debt, and in general, diluting potential earnings per share. Of course, overall earnings will increase substantially, but very likely at the expense of existing shareholders. I'd rather be holding QCOM any day, compared with VOD. They correctly point out that oil companies with substantial downstream business could suffer from the continually increasing prices of crude oil. However, the real problem here is that if crude keeps going up, it will place a real damper on consumer expenditures (we'll be spending money on gas that would otherwise have been spent on more cell phones, etc.). Higher crude prices could easily cut into the kind of earnings growth that has propelled the markets over the last several years. As to what decisions investors should make, it depends on their own particular goals, objectives, ability to handle risks, etc., but one thing for sure, the favorite stocks of institutional investors may be the worst choices for individuals.