Cisco Systems, Inc. (CSCO) Message Board

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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 75.59

-0.6%

3:59 PM EST

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To: Road Walker who wrote (39152)	8/9/2000 9:43:39 PM
From: sea_biscuit	of 77400

Over the last 5 years, Cisco's earnings have increased about 6-fold or so, whereas the price has increased about 30-fold or so. That means, the P/E multiple of the stock has kept on expanding. So unless you predicate that the P/E multiple will keep on expanding into the future, you shouldn't be buying this stock. It is as simple as that. As for me, I suspect that at some point, not only will the P/E expansion stop, but it will actually get reversed and will start contracting. Now, if I knew exactly when that will happen, I could make a lot of money through options or shorting. But since I don't, the best thing for me to do is to simply stay away from the stock.

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