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

To: LindyBill who wrote (27144)	7/1/2000 11:20:19 AM
From: Knight	Read Replies (2) \| Respond to of 54805

Exchange from QCOM-S&P 500 thread. Who's right? Note: This post has a "stream of consciousness" style which is not the style I normally prefer. However, I think it may reflect the recent thought processes of others who are following QCOM discussion on this thread. This morning, I've been somewhat taken aback by posts I've read regarding QCOM. I recently added to my long-term QCOM position with some shares I purchased at $64 and some change. First I saw this statement from LindyBill: <<I think, long term, that QCOM wins out in 3G. I also think that it may be longer than we think before the companies are forced to go to CDMA. We could be looking at 4 to 5 years before Q wins.>> Although, LindyBill still believes QCOM wins long-term, this is the first time I recall seeing any of the thread regulars I respect push the QCOM victory out as much as 4-5 years. I recently added to my core QCOM at $64 and some change. After reading that post, I was seriously questioning whether I should have made the most recent purchase, since it was looking like it may be dead money for the next year or two. (FYI, QCOM is < 5% of my portfolio.) Then, I went over to the QCOM-S&P 500 thread and encountered this post from mightylakers written yesterday afternoon, which essentially declares victory for W-CDMA. Message 13978868 At this point, I'm really starting to worry that QCOM's short- and intermediate-term prospects are not quite as rosy as I'd thought. (Even though they will get royalties for W-CDMA.) Then I see the following tongue-in-cheek response from Maurice Winn. (Is it really tongue-in-cheek or just unadulterated sarcasm. :-): Message 13981652 Maurice's viewpoint seems to match better what folks have been saying over here on G&K. I then went back and looked at mightlaker's post. His post reads like a press release (sounds so official & confident), but mightylaker doesn't state any sources for his confident assertions. Now I'm suspicious. Looks like mightylaker's spreading FUD. (I even begin to quietly wonder if he has any associations with Mike Snyder...). Now I remember the advice from TFM: Hold gorillas until there is a proven substitution threat. We certainly don't have a substitution threat here. However, with W-CDMA (vs. CDMA2000), it appears that QCOM might lose negotiating power since other vendors might be able to throw some of their own IP into the solution. Based on the above, my assessment of QCOM now hinges on three questions: 1) Is it possible for anyone to implement CDMA without violating QCOM patents? (I believe the answer to this question is "no", and the actions of QCOM's competitors so far reinforce that belief.) 2) Is W-CDMA a viable technology? (I.e., can it be made commercially available in the next year or two or is it vaporware that QCOM's competitors are using in order to create FUD and stall for time?) 3) If the answer to #2 is that W-CDMA can be made available in the next couple of years, does it require IP from other vendors to make it work? The whole QCOM gorilla story hinges on the answer to #1 being "no." If the answer to #2 is also "no", then QCOM's intermediat-term (1-2 year) prospects are great IMHO, because market forces will dictate CDMA roll-out within the 1-2 year time frame. If the answer to #2 is "yes" and the answer to #3 is also "yes", then QCOM's prospects are still good because of its CDMA IPR; however, the potential future licensing revenue from that IPR will be diluted because it will be forced to do cross-licensing agreements and, hence, won't have the some degree of pricing power. I'm settled, for now, on question #1. I'm still not sure about the answers to #2 and #3.

To: LindyBill who wrote (27144)	7/21/2000 1:18:04 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 54805

LindyBill: You've said you won't buy QCOM above 40, and don't expect the stock to sustain any upmove till 2001, but you do expect to be back into the stock in 2001. Every piece of news I read says: "great investment longterm, bad investment shortterm". So, you agree with the market consensus. My question is: what are you looking for, before you start buying? News? TA? Waiting till 2001 no matter what? My take is that: 1) the bad news is in the stock, 2) the stock is now in a volatile sideways basing pattern, the stairstep down is done. 3)at an unpredictable moment, good news will rocket the stock up 20 points (and then it's up from there), and this buying opportunity will be over permanently.