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

To: pcstel who wrote (103408)	8/30/2001 8:22:05 AM
From: kech	Read Replies (1) \| Respond to of 152472

<<Should the market value of a company be a reasonable multiple of next year's earnings, even in a recession?> Greg Kaminsky (the CNBC guest rear view mirror prognosticator) is on CNBC repeating this mantra and supporting your position PCSTEL. Maria solemnly agreed with him and they both indicated that Sun should go to $7 because that is its historic p/s value of the 90's. At least this comment is based on p/s which would be a little more stable in a recession than p/e. Still it is likely to also be low relative to ongoing expected future p/s. It seems to me this misses the point that firm valuation is supposed to be the discounted value of ALL future cash flows. If one thinks that current and next year's earnings are at a depressed level compared the the average level of expected earnings, then a multiple of this level of earnings will systematically give you a low end estimation of the value of the company. Maybe this is why the p/e multiples are still "high". See MQ's point that Q's earnings in 2010 will be (with certainty :-)) $10. It doesn't seem too bright to value it today at 15 p/e of $1 earnings or $15. Fortunately the market is smarter than that and gives it a 60 p/e on its $1 in earnings instead.