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

To: Art Bechhoefer who wrote (30605)	5/22/1999 9:53:00 PM
From: KyrosL	Read Replies (2) \| Respond to of 152472

I am very uneasy about international developments. but with American nuclear technology, China could provide that technology to some not very reliable third world countries China has its own home-grown nuclear weapons technology which it can provide to our enemies, if it wants to -- it does not need ours. I am much more concerned that our current misadventure in Kosovo will give them more of an incentive to do so. Moreover, I think that the greatest danger from loose nukes is no longer some hostile third world country but Russia itself. Last week I sold almost all my stocks, including QCOM, and switched to cash and zero-coupon bonds. I only kept some utilities and some company stock. Here is my reasoning: 1. War in Yugoslavia. I think this is one of the greatest disasters in American foreign policy, that damaged, perhaps irreparably, American interests. We managed in a couple of months to set back our relations with Russia and China to Cold War levels (if not worse). Moreover, we managed to cause large numbers of the Russian and Chinese population to hate America -- something that the communists failed to do after decades of anti-american propaganda. Pundits dismiss Russia as a has been. They forget that there are 30,000 nuclear weapons in Russia, controlled by a poorly paid, demoralized, chaotic army, which now hates us. Many of these weapons are tactical nukes that fit in a suitcase. What would happen to the bull market if one of them explodes in downtown Manhattan? The chances of this happening are still fairly small, but they are no longer negligible. 2. Last year there was an Asian crisis, which was defused partly by Fed action, but also because China chose not to devalue their currency -- partly as a favor to us. I think that if the opportunity arises in the next few months for China to devalue the yuan (e.g. if the dollar rises above 130 yen), China will probably devalue, and may rekindle the Asian crisis. Another side-effect of the war in Yugoslavia. Also, Japan, which was supposed to be growing by now, shows no signs of growth. 3. The stock market is about 30-40% overvalued compared to treasury bonds. This overvaluation may be sustained for a long time in a perfect world -- such as we had in the last few years. We no longer have a perfect world, not only because of sharply rising tensions between the US and Russia and China, but also because of Y2K. 4. Millenial fears of apocalypse. Ordinarily, I would dismiss this as affecting only a small percentage of crackpots. The Y2K bug increased their numbers considerably. The intensifying war in Yugoslavia is increasing their numbers dramatically. I am afraid they will have a real effect on the stock market, unless the war ends very soon. At current valuation levels the stock market is very vulnerable to disturbances in the psychology of the crowds that keep it aloft. In the past I have been rather early in getting out of stocks, so I want to emphasize that my actions this time around are probably premature and the stock market (and QCOM) will continue to live and prosper. The above is just my very humble opinion. K