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

To: qveauriche who wrote (111693)	1/25/2002 4:24:13 PM
From: A.L. Reagan	Respond to of 152472

As CDMA becomes more widespread as we move through the transition from 2g to 3 g, the need to do this will correspondingly diminish. Yet another drag on earnings disappears, further amplifying the growth rate. Now there's the premise that if/when fulfilled, will truly drive the stock price higher. The multi-billion dollar issue. If organic growth in CDMA versus "subsidized growth" really gets rolling, and you put that into the awesome R.O.I.C. equation of the chip design and licensing businesses, Paine Webber might be bringing back Wally Pieczyk! Have a good weekend, y'all.

To: qveauriche who wrote (111693)	1/25/2002 6:32:24 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 152472

hi qveau, re: the need to make moneylosing investments in carriers... As CDMA becomes more widespread as we move through the transition from 2g to 3 g, the need to do this will correspondingly diminish i would think QCOM is already at the point where CDMA has "critical mass". but in any case, i believe their pro forma results do not include the investments. rather, it is straight operating profits from "core operations" as defined by QCOM (and now clearly excluding QSI). if they were including those investments as expenses or capitalizing them and amortizing them in their pro forma at the present time, i agree with you that earnings could expect a "turbo charge" at a later point. but my understanding is that the whole purpose of pro forma is to back out those negative cash flows immediately. and further understand that to use earnings the year before true 1x emergence and in the midst of a tech slowdown unprecedented in history as the baseline for such models is, I think ,unfair i think $1 baseline is OK, seeing as how that seems like more than this year's pro forma will be at this point. in any case, the future growth can be captured based on the CAGR input assumptions. like i said, i can create a scenario where the stock is fairly valued at $46 with $1 in 02...as long as i only expect an 11% future return and assume the earnings CAGR for the next decade is around 30%. while 11% compound return may not sound so great (i.e., it's the SPX avg return from 1926), it's probably an excellent forward return, given that the high valuation of the SPX makes it unlikely imo that the market as a whole will achieve 11% going forward. of course, there is the small matter of compounding earnings at 30% for the next decade... I just pray like hell that he's wrong. contrary to popular opinion, i do not assume i am correct. in fact, my portfolio's survival has depended on a complete dismantling of my previous investing philosophy (i.e., admitting i was "wrong") several times so far, and it could happen again. i would be more than happy to change my mind (after all, theoretically, wouldn't i rather expect a 20% CAGR off my investments as opposed to 5-6%?) if i could be convinced otherwise by the numbers. someday, i believe the chance will come.