Cisco Systems, Inc. (CSCO) Message Board

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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.39

+1.3%

Nov 19 3:59 PM EST

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To: RetiredNow who wrote (53313)	5/23/2001 1:40:37 AM
From: Stock Farmer	Read Replies (1) of 77400

Won me over? Don't be so daft. I have merely been fighting against your attempts to EXPLAIN cisco's share price as RATIONAL by showing you that no rational economic logic justifies the current price. I am not trying to explain why the price is wrong! There is a difference!! The price is always right. We can probably agree that rationally there is no reason to purchase CSCO at $20 right now. Rationally it is a lousy investment because the risk weighted expectation value of what some rational soul will want to pay 5 years from now is less than $20 in today dollars. By the same token we can agree the irrational case. Indeed we see strong evidence of completely irrational behavior today. We would be entirely rational to assume continued irrational behavior indefinitely, because there have been few periods in which the stock market was defined by rational behavior. And these have probably been brief and uneventful. The same illogic that would have someone purchasing a share at $20 today or $80 a year or so ago But please, do not ever attempt to convince me that there is a logical reason for paying as much as people are paying. I can admit that people are crazy. I won't fight that. But I can't admit that they are rational. Which is different from insane. Because the insanity of CSCO's current share price is very sane... in a very "Catch 22" and "One Flew Over the Cuckoo's Nest" kind of way! I truly believe that as you said, over the long term the numbers trend towards fundamental economics. So my fundamentals say that I must rely on an ever prolonged irrationality in the market in order to justify a return... I am faced with alternative investments which do not seem to require as much faith in the irrational behavior of mankind as this... With recently bruised faith, I choose these today. May my soul rest in peace. John

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