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

To: mozek who wrote (13174)	7/31/1998 11:46:00 AM
From: bdog	Read Replies (1) \| Respond to of 152472

Anybody have a clue why QC is bucking the trend by heading north of the market? I suppose Maurice is buying his heart out but still . . .

To: mozek who wrote (13174)	7/31/1998 12:41:00 PM
From: Gregg Powers	Read Replies (1) \| Respond to of 152472

Thank you... If I understand you correctly, the pool of dollars (i.e. slips of paper in circulation) is constant (assuming neutral Fed policy). Therefore, your point is that if I convert my stock certificates into dollars, the actually supply of dollars remains unchanged, so the money supply remains unchanged. Makes sense to me. Now, let's think beyond the mechanics. Why is money supply important? The value of paper currency, on one hand, is ostensibly (directly?) related to the (perceived) economic stability and wealth of the issuer and on the other, ostensibly (directly?) related to the relative return that a holder of such currency expects (i.e. short-term money rates). Inflation (i.e. devaluation of the currency) can occur when the Fed prints money (i.e. changes the supply of slips of paper relative to the underlying asset value) or when economic conditions create upward price pressures on goods, services and wages (but a strong economy should improve the currency's relative value and drive up short-term rates, both of which should help mitigate the inflation?? Argg..I'm getting a headache). What's the point? Rising equity prices create actual or perceived wealth by increase actual or perceived income (i.e. realized or unrealized gains). Since "consumers prefer current consumption to future consumption", higher incomes should translate into greater spending (a correlation which is exacerbated (or multipled) by America's comparably low savings rate). This feedback loop has bolstered the domestic economy at a time when external factors (i.e. the Asian crisis) have substantially deflated the cost of important imported goods (oil comes to mind). So we have the illusion of Nirvana...good economic growth coupled with very modest price pressures (i.e. inflation) resulting in low interest rates and sky-high PE multiples. This is what I believe Greenspan was talking about in his recent congressional testimony. As investors we are charged with asking the question, Is Nirvana Sustainable? And secondarily, IF Nirvana is Not Sustainable, what gives out first...does the U.S. economy tank or do domestic interest rates rise. The more I think about it, the more certain I am that I should devote my attention to concepts within my skill set. Best regards, Gregg

To: mozek who wrote (13174)	7/31/1998 3:32:00 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 152472

I smell money! When everybody says nobody knows, statistics lie and it is all magic and boredom precedes understanding, but the actual measurement tool we are using is $$$$$ and I see logical inconsistencies, then there is an opportunity for me to make a lot of the unknowable by being a step or 5 ahead of the crowd. I reckon there is no magic and while not everything is knowable, dragging back the mists of ignorance is the way people create value. So, sorry Jon if it is boring, but I am drooling and need to try. Rake receivers and Walsh Orthogonality in Wave Functions are much less boring and eye glazing I know, but $$$ is the consequence of our investment, so I'd love to understand what this metric means. Inflation is to be held constant seems a consensual agreement. We all seem agreed on that...due to better ways of producing things getting more done for $1. 'In fact, the more stock certificates we convert into cash, the less cash there is readily available for continued conversion.' Not so. When we convert stock into cash, we sell the stock, which means somebody bought it, which means they had money but now you have it. There is still exactly the same amount of money available to convert more shares to cash. But it is now you that hold it. If you buy an icecream instead, then the icecream seller has the cash to do the conversion. The amount of cash doesn't decrease, no matter how many times it changes hands and it is always available to convert more shares to cash. But if the government prints more of the cash, then there is more available to convert stock, but if the amount of stock is constant, then more of the cash is needed to give value equal to the stock converted. Of course the amount of stock is increasing too! So it becomes a complicated paper chase. But stock represents production so that is a stake in the ground. But even that is slippery, because production is a slippery concept, become really slippery since IPR rather than H2SO4 has become the unit of currency in the stock market world and it can be produced by magnetic, electronic or photonic cloning at zero marginal cost. I bet nobody is glaze-eyed! Gregg said "At the micro-level I think there are substantial wage pressures boiling just below the surface. At the macro-level, I would argue that we have had a hyper-inflation in financial assets, which has dramatically increased the potential money supply." Sure Gregg, some wage pressure, but with 2 bn people in China and India, and another billion here and there who have a very low wage rate, the pressure in the USA can't go too high because production will simply slip over the borders. As it is doing. It will be a long time before the 4bn people who are more or less poor [financially] need to be moaned at for creating wage pressure. Also, haven't you got it round the wrong way? The big inflation in financial assets is because of the increased money supply, its velocity and productivity rather than potential money supply being increased by the market increase in value. We are at A but I don't really know we'll get to C. I prefer not to sleep walk into the future with a dream. A is reality. C is only a dream. Mqurice Half an hour to go till $80! You can see the trend. Don't be the one to miss the spike!