Re: Motley Fool on 3Com
Thanks for the info from Motley Fool. It÷Õ good that different points of view are presented here. I don÷Ö agree that COMS is expensive at the present time. Once again, let÷Õ look at CSCO vs COMS. CSCO is a well-run, very profitable company. The problem is, it already has large revenues, and has very high profit margins on those revenues. It is, basically, the Howard Dean of technology companies ?everyone is out to cut it down to size (and no screaming by Howard is going to change things, either). The article states that COMS is selling at 4 times (modest ?for now) revenues ?well, the article fails to mention that CSCO is selling at approx 10 times (huge) revenues. I completely agree that for COMS, it all boils down to the relationship with Huawei, and holding COMS (long term) means you are willing to take on a good deal of risk. If the JV succeeds, COMS will probably see very large percentage increases in revenue, and, eventually, profits ?while CSCO, OTOH, will never again see huge percentage increases in revenue and profits, no matter how well it is run ?the company has matured past the point of that ever happening again. If the JV fails, COMS could very well not exist in a few years ?probably bought at fire-sale prices by a company like Huawei. If the JV does succeed, COMS could possibly be a $40-$50 stock in 3-5 years (with an emphasis on ø³ossibly?. It÷Õ up to each individual investor to make his/her bet. Frankly, I don÷Ö see why anyone would invest in the tech market if they didn÷Ö want to take on risk ?if you want a nice, safe, boring investment, then buy P&G, or Macdonalds, or a company like that. The writer of the article might understand the stock market, but he doesn÷Ö understand technology trends, IMHO.
As far as the broader market goes - I predicted last year that the Nas would rise to approx 2500 sometime by the end of this year, and then either stall or have a mild-to-moderate (100-300 points) correction. If anything, things are a bit ahead of schedule. Any dip or profit-taking is met with strong buying ?I÷Ï not a chart person at all but it÷Õ obvious for anyone to see. I am really getting sick and tired of one guru after another saying how tech is overvalued ?the mantra since last summer for some of them. A lot of people have become frightened and have unfortunately lost out because of these øªurus? Ben Stein, for example, needs to go back to teaching Ferris Bueller. According to Ben, Tech is wildly, insanely overvalued, and if there is a tech stock you should buy, it÷Õ CSCO. Sure, buddy. You should buy a 200 billion dollar company selling at 10 times revenues with huge profit margins that all its competitors are salivating over. Yah, that÷Õ the way to go. A tremendous amount of possible upside there ?NOT! Anyway, I think I÷Ï finished buying for the year myself, I have some big expenses coming up - but if there are long-termers waiting around with some $, my advice, for what it÷Õ worth, is to buy on any dip that presents itself ?the sooner the better, or in my opinion you÷Îl miss out. Don÷Ö wait till the Nas is at 2400 before pulling the trigger, or you might actually then get hurt. Buy now and you÷Îl eventually win some of Ben Stein÷Õ money.
- from YAHOO msg board 01/26/04 05:11 pm Msg: 230605 |
