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To: techreports who wrote (9468)	11/9/2001 1:21:49 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 10934

OT re QCOM: re: don't forget the investment gains You are hoping for good things in the future, a hope that the company's track record should not lead you to expect. Generally, I expect management of any company, to continue whatever pattern they have demonstrated in the past. Habits and patterns tend to continue into the future, even clearly self-destructive habits. Now, in this downturn, a lot of bad habits that managements could get away with in good times, have been exposed. JDSU paying far too much for acquisitions. Cisco being far too optimistic about their ability to predict the future, and locking themselves into longterm contracts with their component suppliers. And everyone handing out too many employee stock options. For QCOM, their bad habit is spending money on startups, to try and expand CDMA's footprint. Since these investments are necessarily risky, some losses are to be expected. But it is a failed strategy, if the losses from those investments come to more than the profits from the "core" business (chipsets and royalties). If current business conditions persist, then QCOM is going to continue to take losses on their investments. Capital for telecom buildouts has gone away, and shows no signs of coming back. We may (just may) get out of the recession (in the overall economy) by 2H02. But the telecom industry is going to take longer, to dig themselves out of the hole they created for themselves. The overcapacity, overleverage, cash flow squeeze, ugly balance sheets, it'll be 2003 at the earliest before this gets fixed, which means capital for risky telecom startups isn't going to become available till 2003. At the earliest. Which means QCOM's losses are likely to go on for a while. So, my attitude toward the "investment gains" you're predicting is, "show me". I'm sceptical, until it happens. My scepticism is based on their track record. What is your optimism based on? re: cash available for return to shareholders. Yes, one of the reasons I am long the stock, is because of that cash. Not that I expect it to be returned to me anytime soon, in the form of stock buybacks or dividends. I'm just hoping they don't blow it on another Globalstar. And I'm wondering how many more skeletons are in that closet.