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

To: Stock Farmer who wrote (129493)	6/3/2003 7:12:01 PM
From: qveauriche	Read Replies (1) \| Respond to of 152472

Thanks for your reply. It was interesting to read, and as a theoretical construct, I think your model has a superficial appeal. The problem I have with it as a practical guide to valuation is that it falsely presumes the death of capital in the ordinary course of business. It fails to apprehend the immortality of properly managed capital. It is the duty of good management to make the optimal return on its asset base wherever it may be in the life of a given enterprise. I don't think its contemplated that a properly managed company would ever, in the anticipated trajectory of the life of that enterprise, arrive at a point of zero value of its assets. This discount to zero of an equity share's worth as a store of value is not supported by the historical record of the US stock market,which instead shows over the long term a gradual increase in value commensurate with the growth of the efficiency, productivity, and size of the economy whose value it reflects. The genealogy of the collective wealth of the economy would show that it all has some ancestral connection with, and is a reflection of the current going concern value of, previously produced wealth. The model of capitalism is to preserve and enhance the value of capital (ie, equity), to constantly change it to its most productive use, for it to live forever and not merely be sat upon until it is exhausted to zero. Your model therefore appears to be married to the false assumption that the company exists in a vacuum ,its capital wedded to its current use, until the use has outlived its usefulness and it is reduced to the worthless piece of paper to which you refer.