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Politics : Idea Of The Day
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To: Crystal ball who wrote (37139)3/12/2001 12:06:15 PM
From: Skywatcher  Read Replies (1) of 50167
 
Why this is happening is understandable. Why this might be just the beginning is also an easy
concept to grasp. There's some awful truth to the old saying that a chain is only as strong as
its weakest link, and you can see that in action by examining recent history.

Just as the Nasdaq was peaking a year ago, interest rate hikes were beginning to test
investors' reluctance to apply traditional valuation metrics to new stocks. Once the funding
dried up for online upstarts, so did the ability for "new-economy" companies to place orders
with "old-economy" companies. While the effect lagged for a few quarters, eventually the
demand for Intel chips and Cisco routers caught up to reality.

Meanwhile, a weaker Wall Street did little to prop up consumer confidence.
Understandably, corporate morale has been shot badly, as employees wonder if their
company will be next -- and if they will be in or out after the restructuring smoke clears.
When people and the companies they work for are unsure about expenditures, so goes the
economy.

So is the worst over for Cisco? Life is lonely at the top. A year ago, Cisco was actually the
country's largest company in terms of market capitalization. But that was yesteryear. Today it
would take you two Ciscos to buy one Microsoft (Nasdaq: MSFT - news). You'd have to
put up three Ciscos for one General Electric (NYSE: GE - news).

I'll raise you 4 CSCO's and see you....

chris
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