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

To: Maurice Winn who wrote (122688)	8/2/2002 4:07:54 PM
From: alanrs	Read Replies (1) \| Respond to of 152472

"well, if you want the bad news, just read a financial history of the railroad industry." Completely applicable if QCOM was in the railroad industry in the 1800's. ARS

To: Maurice Winn who wrote (122688)	8/3/2002 12:16:40 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 152472

Did the people who supplied the steel to the companies who made the rails lose money? you are missing the point of the discussion.

To: Maurice Winn who wrote (122688)	8/3/2002 1:24:15 AM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 152472

I've invested in the company collecting a royalty on each thing sold and which designs and sells the locomotives the thing is, i believe it's hard to say in advance how the cards will play out for QCOM if the industry experiences extreme difficulties (one might say that is already starting to happen). i agree that QCOM is in a very good position as far as the industry goes. but i don't think the industry is too good. also, i believe the share price (high PSR) is discounting a considerable and fast move into 3G, which may not materialize on schedule if carriers have funding difficulties. a bull might respond that it will happen "eventually", so it doesn't matter. but i believe it does matter, for several reasons. first, when one considers return on investment, the longer the return takes to materialize, the lower the annual rate of return is (e.g., a 50% return on an equity realized over one year is attractive; over 20 years, it is not very attractive). second, the more time it takes, the more other things could come along to change the story. "other things" might be competing technologies, expiring patents (oh, i forgot, QCOM's licenses are supposedly for a "long time" -g-), renegs on greenlighting by carriers due to funding difficulties, and so on. QCOM trades at a price-to-sales premium to just about any wireless company i can think of. i believe some level of premium is probably justified, given their high margins and low capital requirements. however, i believe that premium has already been realized. imo, the potential as an investment would be more attractive at a time where the co was trading at a non-premium to other wireless cos, and also at a sufficiently low PE as to provide high expected forward returns. i just don't believe that time has come yet.