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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: surpow who wrote (22608)	4/12/2000 11:43:00 PM
From: John Stichnoth	Read Replies (1) \| Respond to of 54805

When you follow stocks, do you try to figure out what specific future earnings will be from new releases? I wish I could! Sometimes, you can run numbers, such as subscriber growth translating into earnings, but I generally don't have the information or tools to do that. All I can usually do is look at the analysts' numbers and judge whether they are reasonable, and how the price relates to those numbers. One company for which it is possible to run scenarios is Globalstar (GSTRF). They are an exception. Most of the analysts don't run the numbers from scratch either. For instance, for years AOL was valued as a multiple of the number of subscribers, and this value was compared with other ISP's. No one was making serious attempts to estimate the future earnings that this implied, as far as I could tell. Sophisticated companies are able to guide analysts to numbers that will be met. The greatest example of this in our environment is Cisco, which quarter after quarter guides the analysts to estimates that justify the stock price, and then beats those estimates by a penny. Specifically on QCOM--I can't see their growth slowing (35% p.a.) in the next decade. Yes, the WCDMA vs. CDMA2000 outcome will have some effect on that growth. But, remember that the manual states that we should only watch for threats to the Gorilla's hegemony. The WCDMA vs CDMA2000 debate doesn't threaten the Q's gorilladom one way or the other. [I don't know the royalty rates implied in either case. And I think that WCDMA will be adopted faster than CDMA2000, offsetting the negative impact of the presumed slimmer net royalty rates that WCDMA might imply.] So, yeah, with QCOM I pretty much end up saying "oh, that sounds good". :o( If anyone wants to do a more rational analysis of QCOM I'd surely read it. Best, John