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Mohan, High valuations are my #1 contrary indicator, followed closely
by high margins. EPS rising are also part of the mix, but mostly
because that is what causes the funddumbs to bid up the stocks to
ridiculous levels. But I also look for something that can cause the
high valuations and margins and eps to look short term in nature. In
the case of the two you mentioned, along with Shiva, Cisco buying out
Stratacom was one such indicator. The best company, that is making
life tough for everyone with whom they compete, bought out one of the
technological leaders. In other words, Stratacom and Cascade used to
share rapidly growing markets and both made a ton of dough. But Cisco
never learned to share in Pre-School and they are mighty predators.
Also, Cisco just bought out another company recently that allows them
to attack even more markets served by these three pricey companies.
So, Ascend, Cascade and Shiva are the main recipients of the emergence
of Cisco's wider competitiveness. Ask Baynet how much fun that can
be? -G- That being said, these stocks are having nice rallies and I
have reduced my put positions to 1/3 on each. As they get near the
old highs, I will reestablish. MB |
