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Technology Stocks : Intel Corporation (INTC)

INTC 33.76

+0.4%

1:25 PM EST

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To: Joseph Pareti who wrote (86260)	7/28/1999 6:14:00 PM
From: Fred Fahmy	Read Replies (1) of 186894

Joe, < >I just don't see how CSCO can >justify a P/E around 100, can Yhoo justify a P/e=1000 ? what is the p/e of AMZN ? or ebay? > This was my comment regarding CSCO's P/E. In answer to your question, AMZN is possibly the best example of excess in the history of the markets. Of course it's P/E is absurd. Many of the other internet stocks aren't far behind. IMO, that doesn't justify CSCO's P/E...it just means that they are that much more overvalued. I tend to value companies largely relative to their own fundamentals....and while CSCO has excellent fundamentals and great prospects, I think it is fundamentally overvalued by most standards and by some significantly overvalued. This is JMO. <If (and I strongly believe in it) everything will be sold over the internet, C$CO will own the infrastructure, and AMZN will be another '"so what" that uses the infrastructure like all other guys.> I agree with the bolded part of your statement with tremendous conviction and I think few people realize how significant this will be. I also agree that AMZN is nothing special. I also agree that CSCO will own a significant piece of the infrastructure (althouhg not without competition). But a P/E of 100?? Too rich for me. If CSCO can achieve and sustain a growth rate of 60-80%, then I'll buy a P/E of 100. BTW, as with any long term core holding I have, I wouldn't dump it just because I think it has gotten ahead of itself fundamentally (unless of course I think the future is problematic). But I sure wouldn't jump in and buy more at these levels either. Good luck, FF

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