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

To: Tom Kearney who wrote (91346)	1/6/2001 4:36:21 PM
From: Art Bechhoefer	Respond to of 152472

Tom, concerning the accuracy of estimating additions to book value from patents, of course one would have to estimate a range of outcomes. But a precise figure for book value is less important than the gains or losses in book value per share, as that marginal figure directly affects shareholder wealth. If one applies the same thinking to Microsoft, for example, the result is a better understanding of how the company until recently could command a relatively high ratio of stock price to book value. The book value of Microsoft does not accurately reflect either the quality of its software engineers or the high margins obtainable from its copyrighted software. Similarly, the book value of QUALCOMM reflects neither the worth of its patents, the quality of its engineering and scientific personnel, nor the quality of its management. I am suggesting nothing more than a method for distinguishing between the value of innovation and the more ordinary value of a company based on its day to day operations. The failure of investors and analysts to make this distinction seems to explain, at least in part, why good stocks tend to get lumped with bad stocks and react similarly when the market goes down. Art