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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 77.95

+0.2%

Dec 5 9:30 AM EST

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To: Stock Farmer who wrote (61442)	9/26/2002 2:33:59 PM
From: RetiredNow	Read Replies (1) of 77400

To back up what John said about us coming up with a fair value of around $8 using what he called optimistic assumptions, here are some of those assumptions we made: * rev growth of 15% in 2003 * rev growth of 20% in 2004 * rev growth of 25% in 2005 * rev growth of 20% in 2006 * rev growth of 15% in 2007 * rev growth of 10% in 2008 * rev growth of 5% in 2009-2032 * 5% discount rate If you jack up the discount rate to something more reasonable, like 10%, then the price comes to $5.81. Those projections may very well turn out to be optimistic, considering that 2003 is shaping up to be a flat year and no real recovery is in sight. BTW, Warren Buffett uses discounted cash flows to value the companies he buys as well. Can't argue with Buffett when it comes to successful investing. :)

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