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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.28

+0.1%

Nov 25 3:59 PM EST

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To: GVTucker who wrote (36814)	6/1/2000 11:19:00 AM
From: RetiredNow	Read Replies (1) of 77400

Yes if you use interest rates as your discount rate in your calculations. However, that is too simplistic an approach. My premise is that increasing rates will NOT cause telecom companies to decrease their spending on infrastructure buildout over the next 5-10 years. If it did, then those who slowed down spending would be left behind in one of the biggest tectonic shifts in the economy since the industrial revolution. So if my premise is correct, you have to use the rate of earnings growth or better yet, the rate of operating cashflow growth and a discounted cashflows value for the company. Use these as your tools, it is clear that interest rates DO NOT matter to companies like Nortel and Cisco, in the next 5-10 years. But discount rates (rates of growth) do matter as you said. Hope that clarifies my meaning.

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