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

To: Stock Farmer who wrote (125958)	12/11/2002 9:41:05 AM
From: Jim Mullens	Read Replies (1) \| Respond to of 152472

John- you wrote in your latest post to me of 12-11->>> “Astounding... simply astounding... I am trying to clue you in to inconsistencies in your logic and you persist on writing back to me about "comprehension"..<<<< I too find it “astounding” at your apparent continuing lack of and now denial of having a problem with “reading for comprehension”. Or perhaps you have your senior moments (as I do), or perhaps you choose to ignore what I say as your only intent is to debate rather than listen (comprehend) the other person’s ideas. My post to you of 12-09 regarding “reading for comprehension” was in reference to your question regarding the “mysterious” PEG in your post to me of 12/09.>> “there's this mysterious PEG. Why did you choose 1.8 <<<< I questioned your “reading for comprehension” in my 12/09 post because in my post to you of 11/28 I provided you with my rationale for using a PEG of 1.8, so I was at a loss as to why you were asking that question when I had already provided you such.. This is our discussion in my post to your of 12/09 regarding my basis for choosing the “mysterious” PEG of 1.8- >>>>> 2. (John’s statement)>>“ And then there's this mysterious PEG. Why did you choose 1.8? Even during the bubble PEG of 1 was used to justify overinflated prices” (My reply)>>>John, again, you’ve got to start reading for comprehension. I discussed the basis for the 1.8 PEG in my reply to you of 11/28. “Value Line shows the DJIA companies for the last 10 years (ending 2000) with a average PE of 17.4 and earnings growth rate of 9.7% which yields a PEG of 1.8” For the past 20 years (PE 13.4, earnings growth 7.3%, PEG 1.83). For the past 50 years (PE 12.7, earnings growth 5.7%, PEG 2.2). I read a recent article in which a University was comparing their 2002 investment portfolio to the S&P500 and stated their PEG was less than the S&P500 which stood at 1.7 at the time. A Smith Barney study reflects a PEG of 1.8 for a company with an earnings growth rate of 35% with long term interest rates at 5.5% So, I really don’t know what your basis is for saying- “Even during the bubble PEG of 1 was used to justify overinflated prices” <<<< My post to you of 11/28- for reference where I first provided you with my rationale for using a PEG of 1.8— >>>>> 1.(John’s statement) >>“And maybe by then the 25 year old company has matured enough to a blue chip company and command a traditional PE for a healthy and growing big company of about 17 or so.”<<< (My reply)>>>>You appear to continue to base you projections on happenings 15 to 30 years out and you’re right in that who can accurately forecast that far into the future. Qualcomm, I believe, is at the beginning of a new technology adoption life cycle (TALC) and its growth will be extraordinary in the next 5 to 10 years. I’m not speaking of a “mature” company with “a traditional PE for a healthy and growing big company of about 17 or so.” Value Line shows the DJIA companies for the last 10 years with a PE of 17.4 and earnings growth rate of 9.7% which yields a PEG of 1.8. In my models I’ve been using a growth rate of varying between 25 & 35% (probably understated) which yields a PE of 45 to 63 in a normal market environment. <<<<< For further reference to my thoughts regarding PEG this is my 12/10 post to Huey and Mucho which I posted prior to your latest post to me. My Post to Huey and Mucho of 12/10- Mucho, you wrote- 1. “you seem to be under the impression that PEG is a real metric. it's not. it was made up in the bubble years to justify ridiculous PEs. “ You should have preceded your statement with “IMO”. A PEG ratio is a means of calibrating a companies future earnings expectations with its growth rate. I believe that you would agree with me that a company that is growing its earnings at a 20% clip should have a higher PE than one growing at 5%. 2. “when one uses a PE based on next year's pro forma "earnings", that number is also a fantasy, so the resulting "pro forma PEG based on next year's pro forma PE fantasy" is a double fantasy. “ I guess any forecast of the future (E, GR, etc) could be considered “fantasy” by some. But, it’s what we have to work with. I don’t believe any serious investor would project a companies future based entirely on it’s past. <<< All the best, hoping your affliction is a temporary one. If not, maybe you should consider seeking help. - Jim

To: Stock Farmer who wrote (125958)	12/11/2002 9:41:17 AM
From: Mike Torrence	Read Replies (1) \| Respond to of 152472

What's astounding to me is Wells Fargo's price target of 26 which accompanied their initiation of coverage of QCOM today with a sell. Can't wait to read what this call is based upon.

To: Stock Farmer who wrote (125958)	12/11/2002 10:12:30 AM
From: H. Bradley Toland, Jr.	Read Replies (1) \| Respond to of 152472

If, and this is a small "if", Qualcomm grows into the company we believe it can, where cash flows (free) expand to 4 to 6 billion we also believe the company's p/e will expand--maybe to one hundred. But only to a hundred--temporarily--if,and when, what we call the crazies come in and run the stock. No crazies, the p/e can still expand to 50 during the 05-07 period that might be viewed as the Q's heyday someday thereafter. regards, bt