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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.87

+3.0%

2:39 PM EST

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To: Stock Farmer who wrote (53226)	5/20/2001 3:33:59 PM
From: RetiredNow	Read Replies (1) of 77397

Well, I get your drift, but eToys was a bad example. eToys was the best in their market niche. Everybody loved using eToys. They made the worst strategic mistake of their life by not partnering with Toys R Us when they had the chance. Then Toys R Us and Amazon put them out of business. Now we have the inferior web sites of Amazon and Toys R Us instead, but those guys have deeper pockets, so they're still in business. The real lesson behind the dot bombs was that a web store front isn't all you need to be successful in the market. You also need the distribution and supply chain networks of the bricks and morter companies. eToys found that out. Amazon found that out and has busied itself building one. Amazon will one day close it doors too or be bought out by Walmart or some other large retail concern. OK. So back to Cisco. What we need to do is to systematically list all the market segments Cisco competes in right now. Then we need to go out and find research that quantifies the size and growth of those markets over the next several years. Then we need to speculate on what Cisco's market share will be based on current market share and historical trends. Then we can get to revenue figures, which will lead to further speculation on gross and net margins, EPS and PE, and ultimately stock price. I don't even want to mention DCF, because the problem with that is as always your horizon and your discount rate. So that's a lot of work. I did this before and I've done it a couple of times over the last 4 years, but I think it's high time to do it again. Don't know if you are interested in doing your own research into this in parallel as I do my own. Then when each of us is ready, we can post our results and then resume the debate. At least, no one can question our value add on this thread after that intellectual exercise. :) What do you think?

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