Cisco Systems, Inc. (CSCO) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.22

+0.1%

Nov 24 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: RetiredNow who wrote (36794)	6/1/2000 7:36:00 AM
From: GVTucker	Read Replies (2) of 77400

mindmeld, RE: This fundamental concept once grasped will allow you to realize why long term holders of Nortel and Cisco could care less about these rate hikes. They just don't matter. Rates do matter to long term holders, particularly for a stock like Cisco. When you pay 100x earnings for a company, you are counting on earnings far out to justify holding the stock today. The higher rates go, the less those far out earnings are worth today. $1 of earnings 10 years out is worth 48½ if you use 7.5% as a discount factor. It is worth 38½ if you use 10%. Looking even further to the future, high rates render earnings 20 years hence close to zero today. Rates do matter. If you don't care about rates personally, it will be to your detriment.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next