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Strategies & Market Trends : Gorilla and King Portfolio candidates - Moderated -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (194)	10/30/2003 4:50:05 PM
From: Mike Buckley	Respond to of 2955

Frank, Similar observations regarding Siebel's valuation ... Free cash flow has been erratically up and down in the past few years. Trailing free cash flow is significantly less than cash flow in FY01. In each of the four past quarters, each dollar of sales has produced a declining amount of free cash flow. (Though I pay little attention to quarterly aberrations, I don't like that trend.) Yet the enterprise value is equal to about 20 years of trailing free cash flow. In my mind, the market is either valuing the company irrationally or it is expecting a significant turn of events (for the good) in the company's fundamentals next year. --Mike Buckley

To: Mike Buckley who wrote (194)	10/30/2003 5:57:48 PM
From: Jim Mullens	Read Replies (1) \| Respond to of 2955

Mike, re: QCOM Free cash flow and” Qualcomm's free cash flow metric that I use grew from a negative $290 million in FY99 to a positive $290 million in FY00. It grew more than 50% in FY01 and more than 50% again in FY02. Trailing free cash flow as of Q3 is more than 50% greater than in FY02”. I come up with significantly different free cash flow figures(CF from Ops less CAPEX) than you- FY 00..................$648.9M FY01.....................577.3M FY02.....................826.1M FY03 9 months....1,068M Additionally, Qualcomm has increased it’s cash plus marketable securities by $1.8B over the last 9 months, some $600M per quarter. Help- What is your source and how do you calculate Free Cash Flow? TIA- jim

To: Mike Buckley who wrote (194)	10/30/2003 6:38:58 PM
From: alanrs	Respond to of 2955

"Seriously, I hope I have the discipline in the future not to publicly announce any buy or sell decisions. Since people shouldn't make any decisions based on mine, there is no benefit in knowing those decisions." I find that when to buy and sell is extremely subjective and an entirely personal matter. I don't try to out-guess the people with banks of computers or a room full of accountants pouring over the numbers. I also think doing the woulda, shoulda, coulda is a waste of time and probably gets in the way of where am I at NOW and what do I want to do NOW. The one test that I ALWAYS do before I buy is to ask myself if I will be happy owning XYZ stock even if it goes down. Similarly, when I sell it's got to be ok WITH ME if it continues to go up and up and up without me. And then I do it and go on, often with a little "oh well" in retrospect, which is also ok with me. I think a lot of people spend a lot of time looking for the magic P/E ratio, or enterprise value, or free cash flow, or cup and handle formation, or whatever, without spending much time defining-even in a rough way-their own personal parameters, that is, how much do I expect to make and how much am I willing to lose. My suspicion is that many people have "all the money you could possibly imagine" as their ill-defined goal, which of course makes buy and sell decisions more difficult. ARS