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

To: marginmike who wrote (103198)	8/23/2001 8:01:35 AM
From: Robin Plunder	Read Replies (2) \| Respond to of 152472

The Levy report also includes a chart on household debt. It shows that between 1960 and 1985, the ratio of household debt to disposable income ranged between about .75 to .9. After 1985, this ratio increased in a fairly steady progression from .9 to 1.2, where it stands today. This is definitely a much higher ratio than we have observed in the past 40 years, and is a cause for concern. However, as the report notes, capital gains are not included in the disposable income figure. Since we had such a powerful bull market from 1982 to last year, it is perhaps not surprising that this debt ratio would increase. I guess a question would be, now that capital gains have turned negative, how much will the consumer reduce debt to compensate for reduced income. This may depend on how long the stock market provides negative returns. Also, interest rates are now much lower than they have generally been in the last 20 years, and may go still lower, which can allow the consumer to service a higher debt ratio without increasing debt service payments. Given the debt ratio, the slowing economy, job losses, declining stock market values, it seems pretty likely that the consumer will reduce spending. This will affect our economy, and also those abroad. For QCOM, problems in China due to slower exports to the US may become a big limitation on growth, as Korea has limited QCOM for the last year. Still, QCOM has what is, perhaps, the greatest business opportunity in the history of human activity, and even given this likelihood of a weak economy, it is hard to conclude that one should sell QCOM (especially as the wireless data implementation is just about to increase dramatically). Even with the Nasdaq down about 40% in the last year, QCOM is flat to slightly higher. Robin