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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 72.11

-0.3%

Nov 5 3:59 PM EST

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To: kvkkc1 who wrote (55123)	9/8/2001 7:46:32 PM
From: Stock Farmer	Read Replies (1) of 77397

Hi kvkkc1 - yes, NASD has doubled over 9 years. But "we" are Cisco. In 1995 Cisco earned $1.52 a share GAAP and traded for about $56 a share. In 2001 Cisco earned $0.42 a share pro-forma. So having stacked the comparative deck in favor of today's stock price and assuming constant ratios, well according to 1995 criteria Cisco would trade for $15.47 a share today. But oops. Back in '95 Cisco was in this phase called hypergrowth. A future so bright they had to wear shades. Business doubling in 12-18 months. So today's Cisco is not the same Cisco, comparatively speaking. And the business prospects aren't the same. Do we expect revenues of 85 B$ in 2004? So why would we pay a share price that has this same relative outcome built in? And Cisco has NEVER been under-priced according to valuation methodologies of the day. This is why I say we are overpriced against bubble-free criteria. Unfortunately, people are still calibrating their price points using bubble terms. John.

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