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

To: slacker711 who wrote (111937)	1/30/2002 9:40:29 PM
From: Wyätt Gwyön	Read Replies (3) \| Respond to of 152472

Coke is one of the reasons i have not held onto Berkshire (although holdings like KO and Gillette are now a much smaller part of the pie than in the past). i don't think i would argue with him. i think he is realistic about Coke, and does not expect a high future return. one must consider that he bought his 200MM shares of Coke at a very low price. i was reading Buffett/Munger dialog re Coke valuation a while back...basically, the logic is that it will continue to be a steady (albeit slow) grower well into the future, so one can use a low discount rate (i.e., accept a low future expected return) due to the supposed high reliability that the company will continue to grow at some rate. probably there are tax considerations as well, but i don't think Buffett is naive about future expected returns for the company. one difference between a KO and a QCOM, in my opinion, is that KO's brand doesn't expire, whereas QCOM's patents will. i know people think the patent issue is dead and buried, but i am a little more skeptical. i understand QCOM's "license-one-license-all" approach, but my skepticism is based on the idea that once the patents for the essential CDMA features expire (the rake receiver, etc.--you know them better than i), perhaps some companies won't feel the need to license any of QCOM's IP, or else perhaps they will renegotiate the licensing of remaining patents at lower rates. i can imagine that QCOM would not have quite the same leverage as now, BWDIK. just a little skepticism of mine about the perpetuity of QCOM's royalty-based business model. feel free to demolish if you can.