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Ray, TheBeckerMan, wrote:

In my personal opinion, you and other QCOM bulls have benefitted from an unprecedented feeding frenzy, and have become overly bullish, believing that the experience of the last couple of years is a basis for thinking that we are in a new era. The Motley Fool credo is a great credo for the recent past, 1996 to 1999. But it is illogical, and not based on reality, and will be discredited.

The feeding frenzy took the risk out of being long tech stocks; but in fact being long tech stocks is risky.

Sincerely yours,

Let's step outside of the 1996 to 1999 'credo' period you suggest and look at some data about the long term realities of successful technology investing and what compounding can do for one's returns. How about a quick look at what the 90's provided certain investors.

Top 5 Millionaire-Maker stocks of the 1990s were:

CMGI--up 57,191%

Now let's take an oldie, but goodie. Intel. Gorilla, Rule Maker - whatever you want to call it. It's a big large-cap fighting for the top spot in market cap along with Cisco and General Electric now that Microsoft has been contained with the DOJ action.

Intel went public 28 years ago. A $100 investment at the IPO is worth $214,793 and no doubt change today. The stock split 12 times since the IPO and will have the 13th split on July 30. Let's look at what 100 original shares at the IPO would be worth to date:

Split Date type Accumulated shares

1. 05/17/73 3/2 150 shares
2. 05/15/74 3/2 225 shares
3. 05/26/76 3/2 337.5 shares
4. 09/01/78 5/4 421.875 shares
5. 05/31/79 3/2 632.8125 shares
6. 10/08/80 2/1 1265.625 shares
7. 06/30/83 2/1 2531.25 shares
8. 10/28/87 3/2 3796.875 shares
9. 06/06/93 2/1 7593.75 shares
10. 06/16/95 2/1 15,187.5 shares

Before we enter Ray's 'credo zone' of 1996 and beyond, let's pause to see what the worth is on the last trading day of 1995 for these original 100 Intel shares:
11. 07/13/97  2/1     30,375 shares
12. 04/11/99 2/1 60,750 shares

*upcoming split will bring the total number of those original 100 shares to:
13. 07/30/00  2/1     121,500 shares

How do the underlying fundamentals of Intel, now heading towards that magical number of being a public company for 30 years, look in the first part of 2000? Let's zip over to the April 19th Rule Maker report on the first quarter's numbers for 2000:
13%    sales growth
63% gross margins
30.8% net margins
9x more cash than debt
.93 on the Richter scale for the Foolish Flow Ratio

Not bad for an oldie, but goodie. Compounding marches on and the company continues to perform and meet the requirements for Rule Maker status. We could apply the same historical look at other technology stocks like Oracle, Microsoft, Cisco, EMC and see exactly what data shows us for a dominant technology company within a technology adoption life cycle. However, at this point, I'm not even sure you are reading my post any more - so why should I bother to point out to you what I already know? Qualcomm is young and the future is very bright within the CDMA technology adoption life cycle. Some of us will be around 20 years from now with various investments to see if another 28 year record like Intel has had will have come to the surface in an investment like Qualcomm as well as others. Some of us won't be around to see that in physical presence or in our portfolio holdings for a variety of reasons.

You labelled all of the 1996 to 1999 technology share price appreciation as 'illogical, not based on reality and will be discredited'. Iago, in Verdi's adaptation of Shakespeare's Othello, is granted a moment alone on stage to sing a wonderful dramatic piece of music which is commonly referred to in operatic circles as 'the Credo'. This is not Shakespeare's original pen, but the combined work of Arrigo Boito and Giuseppe Verdi. It's mean, dirty and demonic stuff that permeates the core of Iago. It has the audience on the edge of their seats to hear a man who is Othello's ensign share his deep, dark thoughts about God and heaven. Without scaring anyone on this board as to what the entire text is of Iago's credo, I will share a few highlights. The piece begins as Iago plants the notion to Cassio that he should go and visit Desdemona, Othello's wife, so that he can plant the seed in Othello's head that Cassio is having an affair with her. As Cassio leaves the room, Iago follows him with his eyes and says these words to himself:

"Go. I see your destiny already. Your demon drives you and I am your demon."

Chilling stuff.

He then proceeds to share his 'credo' with the audience that a cruel God created him in his image - as a wrathful monster. He tries to justify that he was born wicked and his destiny is to create evil. He claims that all honest men are mocking actors. I'll spare you some of the blasphemous text, but the 'credo' ends with these powerful words set to some of the most spine tingling music ever created by man after contemplating one's fate here on earth:

"...after so much derision comes death. And then? And then.......? Death is nothingness. And heaven is an old wives tale!"

Iago is certainly, in the Verdi adaption, an evil force that promotes the fate of Othello, Cassio and Desdemona. Just as Iago struggles with his fate and destiny in his 'credo', we as investors have to piece together our fate and our destiny when it comes to our investing lives. What is fact and what is fiction?

Is it illogical? Is it not based on reality? Will it be discredited? Is the strategy of being invested in technology stocks risky? Is The Motley Fool credo of investing a demonic attempt to corrupt the very core of our financial being? Is heaven an old wives tale?

Would Iago look into the eyes of TheBeckerMan and say these words about a single metric focus known as the price to earnings ratio?

"Vien dopo tanta irrision la Morte. E poi...e poi? La Morte e il Nulla.....e vecchia fo la il Ciel!"

Will the market do unto us as we have done unto it by our demonic, illogical, non realistic view which will lead to all of us being discredited? In the Shakespeare play set by Verdi, Othello kills his wive, then ends by killing himself after he realizes that the demonic Iago had planted the seeds of his jealousy which were all proven untrue after he had strangled his lovely wife. Where's the good and where's the evil in that story?

Hey, TheBeckerMan, enjoy your weekend.


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