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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: P2V who wrote (3098)	4/3/1999 8:09:00 PM
From: Bux	Read Replies (1) \| Respond to of 5390

BTW I'm still looking for the next Qcom, and remaining nervously greedy with my present holdings . Marden, A word of advice. If you are currently holding QCOM, just relax. Sure, it might shed 20-40 points or even more if the markets crash but I wouldn't bet my future on it. Great companies are great not because their stock doubled or tripled but because they are true leaders. These companies will walk away from the rest of the pack. I was able to buy QCOM because MSFT appreciated so much over the last 8 years. The appreciation isn't measured in dollars but in multiple splits. Think about it. If you have 1000 shares of a company that does a 2-1 split say seven times you will have 128,000 shares. That's alot more than you could make trying to catch every little run up and avoiding every down-draft even if it were possible to do so and it takes a lot less work. Am I diversified? No. Am I worried? Not really because I know that my assets are invested in the best companies I can find. Even if the markets crash and my assets are only worth 1/2 of present value, I am only set back to where I was last year. Many people thought they had missed a great opportunity when MSFT ran from $30 - $60 many years ago but if you look at the split adjusted price, you will see that they are talking pennies a share. The boat was missed by those who continued to refuse to recognize that MSFT had a superior position and the management to utilize it. Tero has refused to admit QCOM's superior position even though this position was patiently explained to him by persons who knew more about it than he. All last year he continued to insist that QCOM was primarily a phone manufacturer and couldn't compete with the big boys and was a bad investment. He couldn't seem to understand that QCOM is an innovator. I'm not sure how many telecommunication investors actually appreciate just how unique CDMA is. It's not just another standard like GSM vs. TDMA. Fundamentally, these two standards use the same principles to get the message from A to B. That is because they both use time divided channels. CDMA is a quantum leap ahead of this and Tero failed to recognize the magnitude of this difference and the inherent advantages since he insisted (and sadly still insists) that GSM has enough of a lead to keep it in the lead. Bull headedness does not make a successful investor and a nervous, flighty investor is in even worse shoes because there is a tendency to sell the winning companies (after a relatively small run-up) and move on to greener pastures which may wither and turn brown. I went on longer than anticipated. My point is, you don't need to feel nervous when you are holding a winning company, no matter how high the price goes. I don't know how many times I have kicked myself for not selling MSFT at some seemingly ridiculously high price only to be glad weeks or months later when it screamed right by that price up to some higher and more ridiculous price. When do I sell some? When I want to spend a little extra money but watching the shares multiply makes it really difficult to spend on unnecessary things. For example, in I have a '93 model year car that was purchased new with $20,000 worth of MSFT proceeds. The true cost of that car today is $372,000 since MSFT has appreciated over 18 times since then. I sold MSFT to buy QCOM. I thought it was expensive at 62. It wasn't and I plan on buying more in the future since I think QCOM has more potential looking forward than MSFT. Do I think Ericsson could provide a good return? Yes. Would I invest in them? No because it's too risky. There are too many things that can go wrong. For example, I wouldn't be surprised if some carriers, who have been convinced by ERICY to stick with TDMA based technologies, demonstrate some of the animosity they must feel (or will feel) for having been advised to invest millions on TDMA/GSM equipment and engineers whose expertise lie only in TDMA/GSM. That is no way to build relationships but ERICY was between the proverbial rock and a hard place and acted in their best short-term interest. Did it help them? In the short-term, yes. The long-term profitability may have been damaged. The next couple of years will tell. I'm not going to find out with my money.