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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 77.99

-0.2%

Dec 23 3:59 PM EST

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To: Razorbak who wrote (49052)	2/17/2001 10:07:46 PM
From: FESHBACH_DISCIPLE	Read Replies (1) of 77400

DREAM ON Management blames a ‘… faster and more severe economic downturn in the United States which we now expect will result in a slower overall market growth of approximately 10% in 2001’. We do not believe there is a significant causal relationship between a perceived economic slowdown and what is currently going on in the telecom equipment sector. While it is certainly the case that enterprise spending would be tempered by an economic slowdown, there is simply no reason to believe that carrier spending would be impacted to the degree that we are currently seeing. Rather, at a minimum we believe that the anomalous period was 1999 and 2000, when the cost of capital was essentially 0 (in other words, any company with a business plan was able to raise equity, irrespective of valuation). This ‘gold rush’ phenomenon, tightly coupled with the ‘dot com’ hysteria, fueled extraordinary growth in demand for equipment. In other words, we believe capital markets fueled the growth. This level of hysteria is unlikely to return; therefore, the extraordinary growth is unlikely to return. NEVER AGAIN!

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