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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.22

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To: Bob Davis who wrote (41223)	10/21/2000 8:33:12 PM
From: Uncle Frank	Read Replies (1) of 77400

>> the cash needed to cover the interest on this theoretical investment is more than the Company itself would generate. Your example was unrealistic, Bob. Market cap is a nice way to get a snapshot of a company, but it was never intended to represent a potential sale price. >> the popularity of the book itself has helped to create the high tech overvaluations that have emerged over the last two years. I think not. Moore's book has only reached a limited audience, and most of it's advocates are ltb&h practitioners. IMO, the rise in valuations is related to liquidity and the incredible top line growth rates associated with successful high tech companies. Silverback Cisco is a behemoth, but its top line growth rate has actually been accelerating, which is completely contrary to conventional wisdom. >> Net-net...the same economic processes are in effect for all investments. Only if you ignore the abnormally long competitive advantage period of a primate. The market has yet to figure out how to value companies with high barriers to entry on products that are in the midst of tornado end markets. Our disagreement on these points is very understandable, Bob. Value investors and Gorilla Gamers speak different languages when it comes to analyzing opportunities. uf

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