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

To: ggamer who wrote (147295)	12/28/2006 5:58:10 PM
From: SirWalterRalegh	Read Replies (1) \| Respond to of 152472

For those who are fully invested in QCOM, are you worried at all about the impact of a stock market crash due to credit/ housing/ derivatives/ hedge fund/ etc. bubbles popping next year??? My major worry is a terrorist attack either here or abroad. Whether it comes tomorrow or in the next few years I feel that it is coming our way. My other worry is that a resolution to Qualcomm's legal problems will occur in a lengthy down market. As I get older the worry trends toward the vanishing point.

To: ggamer who wrote (147295)	12/28/2006 8:33:40 PM
From: Jim Fleming	Respond to of 152472

ggamer re worry about credit crunch and market fallout Yes I have struggled with a decision about reducing QCOM exposure or riding out whatever is coming our way. I have decided to hold on at least for now. Jim

To: ggamer who wrote (147295)	12/29/2006 4:32:17 AM
From: John Carragher	Respond to of 152472

no

To: ggamer who wrote (147295)	12/29/2006 10:31:43 AM
From: John Hayman	Read Replies (1) \| Respond to of 152472

Pundits Misread Bonds in '06 and They'll Flub Stocks in '07 By Donald Luskin December 29, 2006 QUICK. DON'T THINK. Just give me the first answer that comes into your mind. Here at year-end, which was the best-performing investment for 2006? Stocks or bonds? The correct answer is stocks. Stocks crushed bonds this year. It wasn't even close. There's one day to go before the final tally, but at this moment it looks like the S&P 500's total return for the year will be about 16%, and the total return of 10-year Treasury bonds will be about 2.5%. Yes, you could have made some money either way. And stocks are riskier than bonds, so you'd expect them to perform somewhat better in an average year. But the performance gap in 2006 was huge. Stocks won hands down. So no one should have answered bonds in my pop quiz. Yet I think a large number of people would. The supposed strength of the bond market has been one of the dominant stories repeated over and over in the financial media this year. I've written repeatedly about how investors should not own bonds, but instead should sell them short (see my recent column1 for more on that). Believe it or not, you would have made more money shorting bonds in 2006, even though bonds were up. Don't believe me? Take a look at the performance of the Rydex Inverse Government Long Bond Fund (RYJUX2), a mutual fund that does nothing but sell Treasury bonds short — it's going to be up about 8% for 2006. How could you have made more money on the short side than the long side, when bonds had a positive return for the year? Simple. When you (or the Rydex fund folks) sell a bond short, you get to reinvest the proceeds from the sale in a money-market fund. Because short-term rates have been high this year — higher than long-term rates, in fact — you've made more in interest than you lost on the bond. I think the reason why many investors — and the financial media — are treating bonds as big winners is really just because they haven't been the big losers they should have been this year. The Fed has hiked short-term interest rates one full percentage point in 2006, and normally that would make a disastrous year for bonds. But bonds have squeaked by with a modest positive return. So, it seems, everyone thinks they've done just great. But perhaps a better explanation for why bonds have been put on a pedestal this year is because many people are interpreting their surprising strength in the face of Fed rate hikes as evidence that the economy is about to sharply slow down. If that were to happen, the theory is the Fed would have to quickly lower rates. The media loves a good scare story. Nothing glues those old eyeballs to the TV screen better than predicting a coming depression. So bonds are held up to the public as some kind of crystal ball of economic doom. Except that the economy just refuses to act anything like the bond market is supposedly predicting. Even the worst-performing sector of the economy — residential real estate — gives every sign of stabilizing. While a supposed "housing crash" is going on, homebuilding stocks have been steadily rallying for the last five months. I think real GDP in the fourth quarter of this year will come in about 3% — and that meets anyone's definition of a strong economy. Bonds have also hung in there remarkably well in the face of frightening inflation data. If you exclude volatile energy and food prices, all "core" inflation measures have been rising steadily for the last three years. By all historical standards, bonds should have cratered — yet they haven't. In fact, the resilience of bonds in the face of the inflation data has persuaded most observers that there's no inflation risk at all. And now that a couple of official measures of "core" inflation have ticked down slightly in the last couple months, the financial media has given us the "all clear" on inflation, and hailed bonds as brilliant prophets of the macroeconomy. Why does the media salivate over the bad news of a coming recession, and at the same time go all fluttery about the good news of falling inflation? Maybe because the perpetually bearish media thinks that falling inflation is part and parcel of a slowing economy — the silver lining that allows them to trumpet the story of the dark cloud. But whatever the reason is, in reality there is nothing resembling an "all clear" on inflation. All the "core" inflation measures remain in strong uptrends. And throughout history, bonds have always been wrong on inflation. In the 1960s and 1970s, when inflation was really getting out of control, bond yields were always too low to compensate investors for actual inflation risk. In the 1980s and the 1990s, when inflation was falling, bond yields were always too high. So it's an all-too-familiar story, isn't it? Once again, the market has managed to cloud the minds of the investing public — convincing many investors that what's good is bad (stocks) and what's bad is good (bonds). Wait — it gets worse. Here's what happens next. Over the next couple months investors are going to be forced to realize that the economy is stronger than anyone expected. Fourth-quarter real GDP will come in above 3%. Retail sales will be strong. The unemployment rate will stay low, and get lower. The supposed housing crisis will be stabilized. Then all of a sudden the media will have a new story. Suddenly the story will be how great stocks are, how their spectacular performance in 2006 (which got no credit at all in 2006) was predicting the economic recovery all along. Recovery? What recovery? You have to have weakness before you can have a recovery, and we've never had any real weakness. But never mind.... So it will be time to back up the truck and buy stocks! Oh, and about those bonds that were supposed to be so wonderful....well, take your losses like a man. Sell them and buy stocks. Wrong! Because that's just when the Fed is going to look at that economic strength and decide it's time to raise interest rates. And then, when they do, in a couple of months we'll really have some economic weakness. Oh, and about those stocks....well, take your losses like a man. All is illusion. There's no economic weakness now, yet everyone including the Fed thinks there is — so stocks are a great investment. But soon the Fed, and everyone else, will see the truth of how strong the economy really is — and inflation just won't magically go away like everyone is assuming now. So the Fed will end up creating the economic weakness that doesn't exist now when everyone thinks they see it, but will exist when the Fed creates it, when no one will see it. So here's your New Year's resolution. There will be a top in stocks in 2007. Resolve not to get sucked in! -------------------------------------------------------------------------------- Donald Luskin is chief investment officer of Trend Macrolytics, an economics consulting firm serving institutional investors. You may contact him at don@trendmacro.com3.