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Technology Stocks : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (5421)	2/10/2001 9:31:13 PM
From: Jay k.	Read Replies (1) \| Respond to of 6531

"Lots of if's. What if margins tank due to competition and/or sales grows @21% not 31%?" Well in terms of margins tanking due to competition - isn't this risk always in play? Why is it all of a sudden an overwhelming concern? What factors- compells you to say this? and why now? In terms of sales growth slowing.. this is a possibility. But even if current sales growth slows in their current businesses, what about all the new businesses they are soon to enter? Their recent acquistions such as Serverworks, Element 14, siByte etc etc is projected to add an additional 1.2B in revenues by 2002. If they can maintain their profit margins in these new businesses(and theirs no reason to believe they won't) this should be accretive to their profitability both top line and bottom line. Just as these acquistions were dilutive to earnings when they made the purchases. "What if they only earn .90 or less next year?(not a typo)" Unless something drastic happens.. why would they make .90c vs what they've stated? What makes you smarter then the people running the company? "What if the econ continues to erode???" This is the crux of your argument.. what if the economy erodes and sales really do plummett. Well if this is the case(and I admit its a possibility) then we are all in big trouble. If this is a hard landing- ie a prolonged recession or heaven forbid a depression.. then no stocks should be owned. Everything will tumble. There will be mass anarchy, disillusionment, homelessness, despair, suicide, hopelessness and its something NONE of us should want to see happen. Its almost unamerican. "What if any/many of these great purchases blows up?(man those dudes got smoked,,, must be steaming hot, most of them)" ????? -What the hell does this mean? "What if my dog $hits in Henry's back yard again?" ah.. thats something you will have to discuss with him. "Seriously, when things go bad in chip land...they usually go "BAD". These are the first revisions DOWN...and if the econ continues in its current trend, expect more,.. soon. I don't even want to get into the other stuff, i've documented most of it here already. A while back I said 55 was approx. fair value for it. I'm not sure which post explains why:" Why the heck is 55 fair value? What metric are you using? If your scenario passes and we do enter a prolonged recession/depression.. I wouldnt want to own BRCM at 5 let alone 55.. why own any stocks when earnings will contract year after year? That makes no sense and your "fair value" makes no sense.. "Econ takes a powder and 35 is my New "recession" target. Say they earn 1.00 but things still slow into end of next year, so it trades at 35pe as we come out of the cycle. Not so crazy now is it? " Well in your recession scenario.. I wouldnt want to own BRCM at 35 let alone 2.. but if this recession is a short lived one and theres no reason to believe it won't be a brief one like we had in 1990.. then BRCM is a great buy at current levels. Any feedback on this is welcome.