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

To: slacker711 who wrote (123139)	8/13/2002 5:10:27 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 152472

.....It was just a rhetorical device well, it seems more like a crutch than a device. some people obviously need crutches (or baseball bats in some cases) and others don't. i'd like to think you fall into the latter category. Over the long-term, the DCF will rule in the end. If we did have all of the various inputs we needed, but that's the thing...you're saying if we knew all the things that will matter in the future, we could predict the future and thus discount it back to the present. to which i'd say, sher, but... we don't know those things. instead, we make guesses or approximations, and errors in these approximations expand greatly into errors in end results. that is the real weakness of any DCF-based approach. like any model of a complex system, it requires all the right inputs in all the right weightings, but there's no way to know in advance what those should all be. it is even worse than meteorological forecasting, because economic behavior is highly reflexive (in the Sorosian sense). and in fact, meteorologists are better at forecasting the weather than economists and market analysts are at forecasting in their fields (this has been shown to a statistically significant degree in academic studies). so the logical conclusion of your point is that the method which is accurate is the method we can never use. Qualcomm's share price is going get to that identical destination (plus or minus some unknown delta) regardless of it's decision on expensing options. one must be a little careful with "in the long run" reassurances. e.g., Enron's share price got to that identical destination of zero despite the fact that it lied to the public. but that was no excuse for them not to tell the truth. that information, which is available now for Enron and various other scandal stocks, was not available when they were at 80 dollars a share. while the market one hundred years from now will go where it goes regardless of the options decision, that is neither here nor there for investors today. the point is to have the most accurate description of a company's economic profitability available to investors today, not 20 years from now. and i submit that expensing options will add to this description of economic profitability today.

To: slacker711 who wrote (123139)	8/14/2002 10:56:48 AM
From: hueyone	Read Replies (1) \| Respond to of 152472

Qualcomm's share price is going get to that identical destination (plus or minus some unknown delta) regardless of it's decision on expensing options. Not necessarily. As I believe Carranza noted, when stock options are expensed, they may be reduced like any other unaffordable expense. My guess is that the long term stock price of chronic stock option abuser companies---Cico and Sebl for example, are going nowhere until they get this expense under control. Expensing stock options on the income statement may encourage tech companies to get the expense under control sooner rather than later and be helpful to the long range stock price for some of these companies. There could be other companies that are so reliant on diluting shareholders to pay employees that they cannot compete at all when stock options are expensed on the income statements. We will have to look at the impact on a company by basis, but expensing stock options may have important impacts on the long term stock price of some companies in both favorable and unfavorable directions--- depending on how these companies are able to control stock option expense and depending on how well companies are able to adjust to life without the no-expense stock option loophole. Best, Huey