Steven Thanks for the comment. CSCO Oct 98 collapse has some clues to a collapse. Mar97 is another, but haven't done the study yet.
Some SI posts on the CSCO thread
Sep 24, 98 - CSCO target price by WSJ Smart Money is 46$, csco has no significant large contracts since beginning of this month. CSCO at $68 ($16.23 SPLIT ADJUSTED per Wall Street city)
9/24/98 - Only a masochist would short Cisco, particularly with the Nasdaq still sitting below or near the 200 day moving average, and a Fed ease just around the corner.
9/25/98 - ($16.60) the only way I would agree with Smartmoney's assessment is if Cisco missed their earnings estimate. However, Cisco has only missed once in the 8 or so years it has been a public company and they have not warned that they would miss this quarter. In fact, Chambers has stated that he is comfortable with 30-50% growth going forward.
9/26/98 (Sat) I believe Chambers said he expects Cisco to be a $20B company (revenues) by 2000. If market cap accelerates at an equivalent rate that would put Cisco at $250B...by 2000 or about $150/share. yeeha!
9/27/98 (Sun) . You tell us that "bad market conditions" could cause Cisco to drop 35%. What the hell do you think "bad market conditions" would do to these "small caps" and "also rans" you are pushing? Then you cite the increase of staff in Asia at a time when Asia is in trouble as a great risk. From there you mutter that Europe and Latin America are also very soft. So What? What % of Cisco's Business is Europe and Latin America, and what has happened in Asia has already happened before Cisco increased its staff. You are grasping at straws!
9/28/98 - ($16.56) Nortel just announced a profit warning. Is Cisco next?
9/29/98 - ($16.15) I ran a chart on CSCO tonight,,spent several hours ,, I see 55 as the next support on CSCO ,,
9/30/98 - ($15.45) Cisco is holding up well as LU and TLAB are hit by downgrades
9/30/98 - CSCO from now till earnings report in Nov will be under great pressure; fairly obvious- even the big guys in europe that are european based are not doing well- why would one think that csco can be spared from this even when the european based companie are not- Asia still very soft, and with substantial addition in employees that mkt segment is going to definitely reduce the earnings. and in US, we now have the new startups such as Extreme, Foundry, Packet Engine, Alteon taking some mkt share from csco
9/30/98 - Even when the market was down at those earlier lows Cisco never dipped below 60. So, waiting and hoping for $51-$55 is hoping for a lot. Remember, flight to quality holds Cisco up. Yes, if the market tanks Cisco will weaken, hey - like you say, if it moves to $55 we're all big time buyers.
9/30/98 - Are you thinking of selling because the fundamentals of Cisco are strong?
9/30/98 - look at LU, NT and others; can drop up to 35 - 50%;for those that did move to SPY should be doing pretty good
9/30/98 - Covered 61 1/4 ,, x 4000 was sweet.. shall short again ,, let the fools thinking this is the bottom buy again ,, Come October.. I expect 55 or less ,,,, a traditional ,, CSCO ,, headache .. cycle,, great stock to go long and short ..
9/30/98 - U.S. stocks may fall another 5 to 10 percent in a volatile fourth quarter amid what some analysts are calling the world's worst financial crisis in decades. That would snap the Dow Jones Industrial Average's three straight years of gains of more than 20 percent -- the most powerful run in its 101-year history. Investors are concerned about the worst third quarter for earnings in seven years, Asia's economic turmoil and the growing crises in Latin America and Russia, and the exposure of U.S. banks and trading groups to those fragile markets.
10/01/98 - ($14.31) So CSCO's been dead money for the last quarter. Not too shabby compared to the avg NASDAQ stock down about 40% from its highs, while we're off some 12-13%. It's interesting that the NASDAQ biggies (INTC, MSFT, CSCO, DELL) are all not doing too bad, with MSFT and DELL hitting 52-wk highs earlier this week. Some bear market... I don't care if the Dow, which is full of dogs, drops to 2000 -- there's still nothing like America's technology leadership. You can't buy this stuff anywhere else on the planet.
10/01/98 - Maybe we will see $55. Like I said - load up the truck baby!!! Glad I've got cash waitin this time. I finally won't miss this one.
10/01/98 - Looks like we are near the end of the "run of the Lemmings" I just love it when bargains are generated!
10/01/98 - Next target 53,, Will buy tons,,
10/01/98 - VALUATION, VALUATION, VALUATION. I don't care how good the company is...when inflows stop, valuations will be questioned. A recession is coming that's what I'm trying to tell you. Read the economic indicators. Unemployment=less inflows=bear market.
10/01/98 - mkt is way oversold; acting as though rate cut was not there; typical panic selling by funds as well as investors
10/02/98 - ($13.97) The word I got out of some WStreeters was that some hedge funds dumped their good stocks (CSCO, MSFT, DELL etc) to raise the level of liquidity, and those were the only ones they could sell.
10/02/98 - What a week for CSCO! We went from the high of 68 1/4 Monday to the low of 52 7/8 this morning. I don't know how many weeks like this I can take.
10/02/98 - As far as Cisco goes, there is still alot to go. Look at its cousin, Lucent. Cisco will follow suit. This is the closest its traded to its 200 day MA for a long time. When it breaks, say bye, bye. I believe my price target was $50 (pre-split, 33.33 post split). I'm still looking for that. Cash will be king as the fallout is recognized.
10/03/98 - (Sat)People may not realize it, but major damage was done by CSCO on Friday. From what I remember of CSCO's chart, it rarely tests its 200 day Moving Average, and when it has, it's broken it. Plus, that gap below $54 is pretty scary, and that was broken intraday. I don't care if it's intraday or close, it was broken pretty badly and that's all that counts for me. The waters have been tested and they will be broken next week.
10/04/98 - A lot of insiders are dumping DELL right now>
imo, it's one of the stocks that will very likely be half the price a yr from now
10/05/98 - ($12.07) About once every two years in this stock we get a deep, short correction that is a great buying opportunity.
10/05/98 - SG Cowens cuts Q earnings earnings estimate by 1c and CSCO loses $12 Billion in market cap.
10/05/98 - I am curious if anyone has a handle on the drop today. Is it over specific news about Cisco or just "fear" in general.
10/05/98 - This is an excellent opportunity to accumulate csco. I just doubled my holdings at 46 5/8. I don't think a panic sell off will hold once 3Q earnings start rolling in, and longer term, csco will be a winner without a doubt!
10/05/98 - From CNN.com:"Meanwhile, selling was even heavier among major technology issues led by a 6-1/32-point, or 10.8-percent drop in Cisco Systems [CSCO] to 49-23/32 after the company said it will take a charge of 2 to 4 cents a share as a result of its purchase of American Internet Corp."
10/05/98 - Investors are finally beginning to grasp that given current world economic conditions, Cisco Systems will struggle to maintain its "island of prosperity" status in the intensely-competitive networking group. Cisco has been one of the few major names in this arena that hasn't already experienced a sharp downturn in its business.
10/06/98 - ($11.54) I just read 50 posts. Nobody get's it. High PE's are out. Cisco is a good Company but the price of it's stock was too high. The world is going into a deep slump. The big Fiance Boys don't know what to do. Don't buy more now. Raise cash and buy at much lower prices.
10/06/98 - >> You're better off in a CD until a clearer picture is formed<< You must be kidding, right? CD will give you 5 percent a year. Do you think CISCO will be lower than $50 this time next year? The last time I checked packets will still be flowing up and down those networks.
Somebody has to move those bits, and CISCO has arguably the most recognizable face in this market. IMO, after year 2000 is gone IT infrastructure will be booming like crazy... Long-term CISCO should do just fine, thank you.
10/06/98 - Let's calculate this: If CSCO grows 30% year from current levels, we're looking at a valuation of approximately a quarter of a trillion by 2003. You may not be consciously greedy, but you sure are ignorant.
10/06/98 - Reality check, CSCO is now capitalized equally to AT&T and LU is larger than Ford and Chrysler combined!
It's just as ludicrous as the internet stocks and people's analogies of AMZN being larger than Barnes and Noble + Borders combined. Guess what? Same outcome for internet stocks is going to be CSCO's fate!
10/07/98 - ($10.96 - the low for the collapse) I also bet on CISCO by buying some at 47 today. 3coms beat street 4c but still down. I would rather pay a higher price for a well run company (CISCO) than a mediocre company. Let see which stock will outperform the market when things are settle down. I think most likely will be the leaders like CISCO, DELL, etc.
10/07/98 - SMARTMONEY ONLINE: Time To Buy Cisco
10/07/98 - You are one of those guys who thinks the bull market will continue forever. Given the current economic outlooks, I am not sure it's just Asia's problem. Russia basically has no economy now. Brazil and South America is on the verge of collapse, and who's the next one? Australia? South Africa? Sooner or later, it will get to US.
10/07/98 - This stock is a screaming steal here and if people think otherwise then I've got some swamp land to sell them! Still very long and I kinda feel sorry for people selling at these prices. You and I know where this stock will be in a few years.
10/07/98 - The market is driven by negative psychology which, in turn, has been fueled by partisan woes, election year agendas, the craziness 29-year old money managers and above all, the unexpected crumbling of hedge funds tied to "old money". It was widely rumored that the last factor was what caused quality stocks like CSCO and ATI to cave in--kind of dipping into the war chest to raise $$$ for the final bailing-out. As to the bottom, I think we are at IT.
10/07/98 - Cisco has broken through the 200 dma on high volume. This hasn't happened in more than a year. Doesn't bode well IMHO.
10/07/98 - "This market is too volatile, too negative, and there too much uncertainty everywhere" This is frequently a sign of the bottom.....
10/08/98 - $11.67
10/09/98 - $12.51
10/12/98 - $13.09
10/13/98 - $12.67
10/14/98 - $13.03
10/15/98 - $14.23
10/16/98 - $13.84
10/26/98 - $15.34
11/02/98 - $16.17
11/17/98 - $17.18
11/18/98 - $18.12
11/23/99 - $19.04
11/27/98 - $20.00
12/17/98 - $21.21
12/18/99 - $22.60
12/21/98 - $23.67
12/31/98 - $23.20 close.
Lessons:
1) 10/08/98 - "Wall Street is the only place in the world where people run out of the door while there is a sale going on."
2) Bears are always too bearish
3) Buy and holding in a stock that is a leader proved to be a winner
4) The bounce back is so fast that people will wait for a dip that never comes to re-enter
5) When the upturn occurs, no one sees it until later. Many see the bottom, but no one believes them.
6) These analysts didn't accurate pinpoint the market on its way down, so why should we believe them 100% for time of the reversal up.
I got to go to work in five hours. Sheesh!
Jack |
