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

To: Art Bechhoefer who wrote (116547)	4/11/2002 9:24:21 AM
From: Jon Koplik	Respond to of 152472

Art -- great post ! Jon.

To: Art Bechhoefer who wrote (116547)	4/11/2002 9:43:22 AM
From: JGoren	Respond to of 152472

I agree but the delay is killing me.

To: Art Bechhoefer who wrote (116547)	4/11/2002 5:27:00 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 152472

Timing is always the problem with options because they lose their premium as they approach the expiration date well, i think he was talking about SELLING the options, in which case he would presumably be happy for them to lose their time premium. in the same way that some people sell covered calls against a long (which i do from time to time), i might and do sell puts against a stock i am short. also just a matter of time before institutional investors and portfolio managers realize that QUALCOMM is the only telecom equipment firm without any major debt i think they already realize this. the proof is that QCOM is not really valued the way other telecom equipment companies are (e.g., QCOM is at 10x sales; while NOK is at 3.3x; ERICY at 1.35x and MOT at 1.02x). if it were valued the same way as these other companies, QCOM would be much cheaper or the other companies would be much more expensive. one of the few large-cap tech companies that seems valued similarly to QCOM, imho, is MSFT (QCOM at 10x sales, MSFT at 11x). however, MSFT has nearly double the operating margins QCOM has (42.8% vs. 22.5%). upward potential here, it's foolish, IMHO, to risk investment funds on the premise that a stock with no debt and far better than average margins is going to fall. it may or may not be foolish to short QCOM, but you need to look at why somebody is short. e.g., somebody could have done well shorting GX or Enron into the ground because they were bound for bankruptcy. such an approach would probably not work for QCOM (and i doubt many are trying that approach). but some people might short a stock because they think it is overvalued. QCOM has delivered tremendous profits to shorts over the past 2 years as its bubble valuation has unwound from 200 (or 179, according to slacker) to the current 34 and change. similarly, CSCO has delivered tremendous profits to shorts, as nearly half a trillion dollars in market cap have been wiped out in two years. so people could have shorted these stocks based on a valuation call (as opposed to a bankruptcy or "bad business model" call) and done quite well these past two years. whether the overvaluation call will continue to prove profitable on QCOM remains to be seen. i would not be surprised to see it cut in half again, at which point it would still trade at 5 times sales. that does not seem outside the realm of conceivable reality to me, but hey, i read a lot of SF. in any case, i don't have a short bet on QCOM, because i think the risk/reward is better elsewhere on the short end. on the other hand, not wanting to be short is not the same as wanting to be long. there is an obverse to your statement: it's foolish, IMHO, to risk investment funds on the premise that a stock with no debt and far better than average margins is going to fall which is, IMHO, that it's foolish to risk investment funds on the premise that a stock with a historically high valuation is going to rise. whether this statement applies to QCOM at this moment in time remains to be seen. personally, i would like the long-side risk/reward proposition better if this stock were in the teens. and i honestly believe i will get a chance to go long this stock at a price i like within the next decade. BWDIK! all JMHO, and i could be completely wrong.