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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 77.04

-0.5%

3:59 PM EST

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To: Road Walker who wrote (39239)	8/9/2000 9:25:00 PM
From: Skeeter Bug	Read Replies (1) of 77400

john, i had a guy tell me that in 10 years his cisco, msft, intc and oracle portfolio was going to split 4 times (go up 1500%) in the next 10 years. he's counting on this to retire. msft would be worth $5.9 trillion. intc would be worth $6.4 trillion. oracle would be worth $3.5 trillion. csco would be worth $7.1 trillion. the grand total w/b about $22 trillion dollars. us gdp was $8.4 trillion in 1998 so, 4 companies are going to be valued at nearly 3 times the gdp of the entire country? my friend thinks so. actually, he doesn't think. he just thinks [logic starts] they split so much in the past they will continue to do so [logic ends]. just like japanese investors felt when the nikkei was 40k. this is the biggest stock market bubble in history. $3.60 trades for every $1 purchased - nearly 100% higher than the old mark of $2 traded for $1 purchased in 1929. inflation is statistically adjusted downward while productivity is statistically adjusted upward. hint: they are adjusted b/c reality isn't pretty enough. read up on hedonic pricing and chained (as opposed to real!) dollars. rule #6: rules 3-5 always exist in a bubble - by definition. rule #7: bubble participants (society!) ALWAYS end up worse off (not everyone, but nearly all) b/c they stick head in sand and follow rules #3 - #5. ALWAYS. note one bubble in history where many folks became and stayed rich. i can't. trend following works until it doesn't. just ask qcom investors that bought in near $200. they were a cocky bunch, too. then again, pride cometh b4 a fall. i hope only a few went broke as opposed to a lot.

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