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

To: Maurice Winn who wrote (118782)	5/14/2002 4:47:06 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 152472

Maurice, nice try at squaring the "it's different this time" cube. i don't buy any of your arguments, even though you offer them for free. but they are fun to read and you have a kind of infectious optimism. btw, you and Irwin Jacobs do NOT have the same agenda.

To: Maurice Winn who wrote (118782)	5/14/2002 6:44:27 PM
From: marginmike	Respond to of 152472

hey maurice what about price to sales? or maybee real cash flow, by any standard this market is over valued. Though some stocks including Qcom have come into sane levels.

To: Maurice Winn who wrote (118782)	5/15/2002 8:58:59 AM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 152472

A P:E is not like the gravitational constant and laws of physics and maths. well, not that firm, to be sure, but the more general idea of valuation being the ultimate determinant of equity returns is valid, imo. and has been eloquently analogized to gravity by Grantham (as i have mentioned here several times: imagine you're standing on top of a tall building and throw a bunch of feathers into the air. the wind takes them away to you know not where. you cannot know what their paths will be in advance--there are too many unpredictable short-term variables. but you know that eventually the feathers will land...somewhere, be it on the street below or in your back yard or in the next state. the gravity subtly weighing on those feathers is like the gravity of value weighing on risk assets.) Life expectancy is a decade longer. There is no gold standard. For those two reasons alone [there are many more of less importance], the P:E of 1960 is irrelevant today. actually, i would think longer life expectancy would require higher expected returns or less risk--after all, longer life means more years without earned income, which means today's investment dollars must cover more days of need in the future. so those dollars, if large enough, must be protected (from inflation and capital loss); or if not large enough, must be grown quickly (through investment in ex ante high-return prospects, a/k/a cheap stocks). i think there are a whole host of reasons why equities are expensive today, as presented in excruciating detail in Irrational Exuberance. none of the factors seem to be permanent as far as i can tell. in any case, both bulls and bears can agree that the market is cyclical, and all one has to do is assume US equities hit a trough over the next decade equal to just the AVERAGE PE of the last eight decades (not the lows of the past; just the average PE since 1926) and it looks to me like the market could be cut in half. as for the lack of a gold standard today, i don't see what bearing that has on equity prices; perhaps you can elaborate on your point here a bit. as China becomes wealthier, they'll buy more flash toilets, you know, the other day my wife wrote "Not Flashable" on a box of baby wipes next to the toilet. but she has the excuse of not being a native Anglophone...-g-