The RM column writers shall not take the following as a criticism but as shall be considered as a suggestion for further improvement.In today's RM column Bill wrote about wireless technology players. I noticed that at few locations there have been deviations from our basic RM principles. One of the basic principle is look for Quality, Quality ……& Quality, not for the valuation. This was deviated during the analysis of QCOM. Consider few statements like"I'm not going to make too many friends in the Qualcomm camp here, but this pricing is ridiculous""And the current share price is at a level that leaves exactly zero room for error"How come RM managers have started taking about pricing. I am not in favor or against QCOM, but the rejections shall be on the basis of RM's qualitative and quantitative analysis.I remember Tom had mentioned in one of his radio show (when YHOO was around 300) that YHOO still could be undervalued and other $10 share can be overvalued, if analyzed as per RM. So in my opinion we must follow our guidelines in selecting next RM and not just few words about analyzing some analyst opinion. As an investor we must be convinced before we say Yes or No.Analysis for SNRA was slightly OK. But not to the satisfaction. The rejection for SNRA was "Sonera is not providing their services on a worldwide stage as of yet, which means that they lack the inevitability that we would ideally like to see in a Rule Maker" I think TROW is also still not providing their services worldwide. But still it is in our portfolio.Readers expect from TMF writers that they must make decisions based on detailed analysis, which was missing in today's column. I was introduced to TMF six months back and regularly reading their daily columns. I am very thankful to them for the knowledge I gained from TMF. But today's column was not upto the standard of their "Educate, Amuse, Enrich" mission.I hope the above will be taken as positive suggestion while writing analysis in further columns of Wireless Telecom.
I don't think that the comparison between the Globalisation (or perhaps un-Globalisation) of Sonera and T. Rowe Price is a valid one. Fair enough, T. Rowe Price might not be a globalised company, but globalisation isn't necessary to ensure its survival. No matter how many advanced services Sonera can provide, unless it can go global, it simply won't be able to survive. Vodafone Airtouch already is the dominant player in the UK and US, and if it can acquire Mannesmann it will become the dominant player in Europe. Companies that big could deal with Sonera in seconds. Sonera might be dominant in Finland and Turkey etc. , but these are very small markets compared to the US, UK and "Euro zone" . I also disagree with your belief that valuation shouldn't be considered. If Intel (an extremely good company judged by the RM Ranker) was priced at $200 per share would the RM Portfolio be buying it now? Of course not, and I doubt that anyone would be able to advocate buying the stock at that price. If such an overpricing situation exists in Qualcomm (whether it does or doesn't is another matter), it would seem a little stupid to pour our 500 smackeroons of hard earned moolah into something that was overpriced. Clearly, as examples have shown, relative to sales of CDMA devices, Qualcomm and its $250 price target are getting a little ahead of themselves. That doesn't mean however, that either company is a bad investment, or that either won't become the next Microsoft, only that it wouldn't be appropriate to treat either as a potential buy.
Do you want to be a doctrinal purist, or do you want to make sound investments? Even if QCOM is destined to become the most profitable company on earth in short order, its too expensive. SNRA is not dominant enough, except maybe in tiny Finland, to be a rule maker. If anything its a breaker (and I doubt any former telephone monopoly is destined to fit that mold either.)Can somebody tell me who said "Consistency is the hobgobblin of small minds?"
Scrog asked:Can somebody tell me who said "Consistency is the hobgobblin of small minds?"Ralph Waldo Emerson: "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines."Dave GoldmanPortland, OR
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |