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

To: Sawtooth who wrote (103953)	9/6/2001 2:57:36 PM
From: marginmike	Read Replies (2) \| Respond to of 152472

PE's are irrelevent because they are based on estimates that can change for better or worse. In 96 Qcom had a forward 100Pe, in retrospect it was pretty cheap. The issue is does the economy, and wireless business start surging again. If so Qcom's earnings could increase 10-30% making the Pe a very reasonable 20-30. However the reverse is true as well. I remember BRCM was expecting to make 1.00 this year as of last DEC. Those estimates are now down 80%. The overall market PE is signifigent as a picture in time of where markets are in relation to business cycle. However trying to pick which stocks E will increase dramaticly is the issue. That being said I think Q is at fair value at 50-60

To: Sawtooth who wrote (103953)	9/6/2001 3:16:08 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 152472

No, I didn't add shares. This was an initial position, my first in a series of planned purchases. Longterm, a PE of 50 (using forward, or backward, earnings) is not sustainable, for any company. If QCOM returns to a 30-40% EPS growth rate, then a PE of 50, using trailing earnings, is sustainable. But that PE isn't sustainable longterm, because earnings growth in that range isn't sustainable longterm, if you define longterm as 20 years. That earnings growth rate could happen for a period of 5 consecutive years, in the initial worldwide adoption of a technology that QCOM has proprietary ownership of. Which we may be on the verge of. I've learned the hard way, to start buying above where I think a quality company is fairly valued, and hold back some cash for the possibility that the stock gets far below where I think it should be. Mr. Market is a manic-depressive; he can keep a stock at twice, or half, where it should be, for years. I have the cash and courage to keep buying (stock, and then LEAPs) all the way into the 20s with this stock. If it gets that low, the volatility of the stock will give me the opportunity to sell my higher-cost lots on rallies. That's how I got out of the position I initiated last year, with 95% of my capital intact. I may have to do that again. I hope not; I'm tired of trading, I'd really like to go back to LTB&H, but that isn't the way to make money in this market.