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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Dash of Reality who wrote (91216)	4/27/2010 4:37:08 PM
From: qinvestor	Read Replies (1) \| Respond to of 197225

Speculators invest without understanding valuations, blindly believing interested parties (eg. management and analysts) and just hope the value will come with time. On the other hand, Investors try to understand the basis of the valuation of the stock and make investments, both long term and short term. In other words, investors don't have blind faith.. With QUALCOMM it is difficult to know the proper valuation of the company because so much of its valuation is tied to future growth and an opaque royalty model. It is legitimate and necesary to question the foundation of its model, long term growth, and current and projected valuation. Also - tie in the fact that the macro fundamentals of the global economy are still highly speculative. Right now valuations are trending well ahead of the 2002-2004 recovery and analysts are gambling on $100 EPS on the S&P for 2011. Most of the "wonderful" earnings have been on the backs of major cost cutting and little top line revenue growth (still down from 08). More than 1/2 the gain in earnings has come from the "mark to BS" that the banks have been reversing losses against. In other words, we could very likely be revisiting 2008 in slow motion as stimulus is removed or other matters destablize this recovery. If these markets take the path of conservatism, PE's will come down and reality will be what determines valuation, not hope.