Hi mind,
Sorry for not getting back to you earlier. I am not saying that CSCO is not going to dominate in the next generation. They might, but there are lots of uncertainties out there.
It's not a bad idea to buy at current level. We are at least close to 70% down from all time high, so there is definitely less risk here, and long term risk/reward ratio might favor reward. And technically, we are close to the April low, so a technical bounce is very likely from the so called 'oversold' level.
Now the bad.
I think DOW 9500 is too richly valued. Just like kv pointed out, it's more of a psychological issue. When it broke,
watch out. My personal target on this thing is 7.5-8 k before it's over. But the fair value probably won't be reached until it goes down to at least 5k. Just look at what kind of P/E Coke spots. Ridiculous.
You will likely see a Naz rebound to 2k. But my gut feeling tells me that it won't be over until we get to 1200 level (my previous target was 1400 some 7 months ago). Too much trouble ahead. It's not that US economy is going to hell, but the whole market is priced in for a rebound and fast growth ahead. I just don't see that happen within 2-3 years. It's likely that we will be static for the time period, maybe meager growth. But that won't support current valuation, by a mile.
BTW, I was planning to purchase sth for the long run, but have decided to hold. It's not worth the risk.
enjoy,
larry! |
