Should I sell?
I bought at 48 in April 97, and am close to doubling by the end of the year if current trends continue. I'd really like to wait till the purchase is 18 months old, so the feds get only 20% instead of 40% of my gains. However, I don't feel comfortable owning a stock, even a quality stock, at this PE. Cisco will have to blow out earnings every quarter, have no hint of a slowdown in the industry, continue to gain market share, and the economy as a whole has to keep doing well, in order to justify the current PE. If anything goes wrong, the stock goes down. A lot. What are the chances of holding the stock through 1998, selling on January 2, 1999 (so I don't pay taxes till April 2000), and none of those bad things happening? |
