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

To: Jim Mullens who wrote (134329)	6/3/2004 11:28:41 PM
From: Jon Koplik	Read Replies (1) \| Respond to of 152472

Re : the "great" Warren Buffett / speculating in silver -- Just for the record ... Having personally worked as a commodity futures broker during both the 1980s and the 1990s, I can say ... Only the most amateurish, foolish, stupid people would call and insist on trying to make money by going long silver. They all remember the 1979 - 1980 Hunt brothers run; and have been hoping for over twenty years now for a big bull market in silver. Jon.

To: Jim Mullens who wrote (134329)	6/4/2004 10:20:09 AM
From: Art Bechhoefer	Respond to of 152472

Jim, while I'm not a big fan of Berkshire, I believe the company is more successful than your comments suggest. I also believe that comparing what Berkshire does with a company like QUALCOMM is like comparing apples and oranges. The period between April '99 and June '04 includes 911, which was not a very happy time for insurers, including Berkshire, which had quite a lot of reinsurance exposure. Looking at the insurance end of the company, I'd say they did remarkably well, given the catastrophes that occurred during the period. The ensuing rate increases for casualty insurers were across the board and have benefited all of them. Buffett prefers to invest in companies that will be doing the same things in five years. This is decidedly NOT the business plan for QUALCOMM, which relies on innovation and its huge patent portfolio to stay on the cutting edge of wireless telecom equipment. What Buffett and his managers at Berkshire look for is intrinsic value in well managed companies. Since they don't specialize in technology, they are unable to understand either QUALCOMM's technology or its quality of management (though the balance sheet might give them a clue if they read it). The reason for investing in QUALCOMM is to share in its innovative approach to wireless communications. The reason for investing in Berkshire (but probably not at current prices) is to take advantage of the ability of HONEST and capable managers to find value in mature companies. As to what Berkshire does with its internally generated capital, they stash it in anticipation of an acquisition or two, hoping that the return they get in the meantime is not too low. It is also true that the best days for QUALCOMM are still ahead of us (due in part to the opening of European markets through WCDMA), whereas for Berkshire, Buffett admits that it's impossible for a company of that size to grow as fast as it did during its first 30 years. It's just too large. Aside from that, the honesty of management ought to appeal to a large segment of investors. Art