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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 80.66

+3.0%

3:59 PM EST

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To: Nichols who wrote (26206)	6/8/1999 5:48:00 PM
From: Doughboy	Read Replies (1) of 77400

Lastly, the P/E is high, but compared to what? Compared to itself. Admittedly, Cisco has always had a high P/E; I bought when the P/E was just a bit below 50, but Cisco had an earnings growth rate of 50% back then. Since then, the growth rate has steadily come down, to around 35-40% (just as Chambers has repeatedly cautioned), but the P/E has steadily risen. I think we're somewhere around 70 now, aren't we? At some point reality takes hold and Cisco comes back at least within shouting distance of its historic P/E. (It is at this point that Chuzzlewit usually comes out and slams me for using PEG ratios, but I do think it's a valid indicator of value). I don't recommend selling Cisco, and there is a reasonable chance that Cisco will be at 150 by year-end, but as an investment proposition, I do think that Oracle gets you higher return for less risk. Doughboy.

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