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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Bruce Brown who wrote (40005)	3/5/2001 9:15:39 PM
From: Jacob Snyder	Read Replies (1) of 54805

re: CSCO article: Yes, I found the article interesting also. I sold my CSCO in 1999 when they hit a PE of 100, on the general premise that nothing is worth that much. I intend buying back at some point, but I'm in no hurry. My thoughts: 1. The whole telecom/telecom-equip area in in disarray at the moment. A lot of companies have business plans that just aren't viable, and we are at the beginning (just the beginning) of a weeding-out process. I think CSCO will be a survivor, but I doubt that the (recently-reiterated) 30-50% LT growth rate is achievable. 2. CSCO and her peers did exactly the same thing I watched in the mobile-home building industry: make sales numbers by offering easy credit to customers. Sooner or later, this causes trouble. There are very few manufacturing companies that are competent to act as bankers. 3. I had always thought that CSCO's acquisitions were to get products, not people. And this "buying freeze" is a change from their consistent practice for many years, up until very recently. Anyway, if they don't start buying again soon, we are going to find out whether CSCO can develop products in-house.

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