Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Asterisk who wrote (14533)	9/3/1998 7:30:00 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 152472

*Long! Markets overall* OOops, did I say this: "...So I've stepped up to the platter and sold my whole position. ......[Is it the weekend yet?] Q.com $30, 30 September 1998"? Ahem, ahhh. Ummm.. Well, to retain the last shreds of my credibility I should hasten to add that I didn't REALLY step up to the platter [US dyxlexics say 'plate']. I was just kidding. I don't REALLY think the Q is going to $30. I'm just amused and bemused by the massive selloff. I thought, in my Cloudy haze that some reverse psychology might reverse the market back to reality - which is defined as being that which I perceive it to be, irrespective of whether that perception is Cloudy or not. I have got my WHOLE position [apart from Techniclone which I sold at $1.50 some time ago] in Qualcomm and Globalstar. I hope my long term optimism about Qualcomm's prospects didn't panic anyone into selling if they took that comment seriously. I'm with Gregg. Except that I think investors can not only predict the future, but create it too! Here is why I think the market drop is not going to be too bad. Ramsey has got 40% cash. Marginmike has 70% cash. $ill Gates and MSFT has umpty billion cash. Cash, cash, cash, everywhere you look. Sure, there are plenty of margined people, present company included. But the crash has been a gradual correction allowing plenty of time for the overborrowed to be sold out, pay up or otherwise stabilize their position. So the brokers, Donaldson Lufkin, Jenrette, Travellers, etc, the clearing banks and all that have had plenty of time to avoid an unmanageable swamping of stock for sale. Markets clear quickly these days. Well, quicker than when it took days and weeks for certificates to be posted around the place, cheques to be cleared and all that snail mail stuff. Now it's the New Paradigm. So the vertical and disastrous falls of 1929, October 97 are less likely to occur and when they do, they are cleared quicker. Not long ago, the worry was that the USA economy was overheating. I doubt that too many people are panicking about that just now. So this is a tidy up of credit. Possibly disastrous if the Fed and trade legislators take the wrong actions, but it would take serial and parallel stupidity. Unlikely. So, all these Ramses emperors sitting on their cash, for just such an event, have to decide when the interest they will get on their cash is less than the earnings they'll get on the stock they are ogling. What are you getting Ramsey, 4%? Qualcomm is already about 3% and their earnings are going up fast, as you know. Interest rates aren't going up any time soon. Next year, Qualcomm will earn you 6% and the year after that 15% [on today's share price]. Then 30%. Then 60%. You'll just be celebrating your 5 year T-bond at 5% or something. Discount the Q for a bit of risk - say halve the earnings. Still not bad. Then, when all these drooling cash holders try to buy stock, they buy at the margin as Gregg says, the same as people sell at the margin, meaning selling or buying very few shares moves the price a long way - especially when there is panic or greed in the air. I can tell you I will be feeling very greedy when the Q starts rising again and I won't be selling any time before $150. If they really are holding half cash, then they will absolutely swamp the markets with money and they will not be able to spend all their money at current prices - there simply won't be enough stock. So, they'll either have to pay a LOT more or sit on cash hoping for another market decline next year. But why should there be a decline when profits are growing? Next year, Qualcomm will be reporting $2.50 or something profit. There won't be a crash if that is the figure Ramsey is looking at. Even if Alan Green$pan is gentle on producing new SuperDs - Ramsey's, MM's and $ill's old ones have to compete with those new ones and when there is competition, the price goes up - just like at a house auction. Meanwhile, Leprosy worldwide is down to 1.2 million cases from 12 million 10 years ago. All part of the New Paradigm. I love it. Mqurice Dow 16000 Feb 2002 Cloudy Bay red is indeed a wine. Marlborough [a district] cabernet merlot. Produced and bottled by Cloudy Bay Vineyards Limited, Jackson's Road, Blenheim, New Zealand. Contains preservative 220. 750ml, 13.5% ethanol. Produced using traditional techniques and maturation in French [curse them - other than my ancestors of course] oak casks. A blend of cabernet sauvignon and merlot it says on the bottle. I have no connection with the company. Beats sherry. I cancelled the Dom Perignon orders a few weeks ago in deference to Chicken Little [mentioned here for no good reason].