SI
SI
discoversearch

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.
Strategies & Market Trends : Don't Drink the Kool-Aid Kids
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Stoctrash who wrote (14)2/20/2001 11:14:04 AM
From: Rarebird  Read Replies (2) of 1063
 
Fred, Cisco is a perfect example of what we are talking about here. The consensus estimate for CSCO's five-year earnings growth rate is 33.4%. But the same POLY O analysts project CSCO to grow earnings only 7% from fiscal year 2001 to fiscal year 2002 based on consensus fiscal year estimates. The reason the market continues to buy CSCO even in the face of a recent atrocious earnings announcement and anemic growth projections is the POLY Faith the market has put in the long-term growth estimate. Thus, CSCO's P/E level of roughly 40 times next year's estimate is justified only if the long-term growth estimate is actually realized. This same is true for almost every large-cap tech stock.

The important question then becomes whether the long-term growth estimates are actually obtainable. My Read is that the projected five-year growth rates the POLY Analysts have estimated are far too optimistic. Most analysts working at brokerage firms throughout the country have the experience of the longest bull market in American economic history looming largely in their minds. This experience will undoubtedly create an upward bias to the analyst's long-term estimates.

From Re-listening to Greenspan's recent testimony to Congress, I was struck by the fact that Greenspan pointed towards the strength of five-year growth estimates as an indication that economic weakness will only last two quarters. It is likely that these long-term growth estimates are going to be revised downward in the immediate future as analysts start to realize their expectations of growth are too optimistic.

Greenboink is in a Box, Fred and playing Big Time Poly here. Why bother to listen to him anymore? He has lost credibility.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News