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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF
COMS 0.00130-18.8%Nov 7 11:47 AM EST
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To: Dwight E. Karlsen who wrote (9978)12/3/1997 7:25:00 AM
From: Doug Fowler  Read Replies (1) of 22053
 
Dwight:

It seems that only Cisco (which fortunately I own) is the only networker these days that can deliver reasonable earnings. And even they could present us with a negative surprise.

The really strange thing is that investors seem to ignore all common sense, and assign values to the networkers with the assumption that they will grow at 30 to 50 percent forever (or at least five years down the road). I submitted a message about a year ago questioning whether US Robotics would ever bring home earnings totalling its (then) current stock market capitalization. It was totally ignored, as people were caught up in perceived growth rates continuing for years. Obvously, USRX was already stretching the truth of their earnings then. Now we see no (or negative) growth, and yet people still want/expect to see 40 percent plus growth. They always believe current troubles are a one-time thing (in reality, they usually last for at least several quarters).

There are few companies that ever deliver on these kinds of expectations over the long-term (which is needed to justify these high p/e ratios. Cisco is one of them and Microsoft is another.)

Doug

As for many other stocks,
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