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Technology Stocks : 3Com Corporation (COMS)

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Nov 26 9:30 AM EST

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To: Mang Cheng who wrote (12146)	12/12/1997 1:46:00 PM
From: hitesh puri	Read Replies (2) of 45548

Just a few points I observed recently : 1) Nobody knows s**t about the future of a companys business. One can only make an educated guess on a daily basis. Recently Cramer on TSC, Cisco bulls, fund managers, analysts (Morgan Stanley) et al were ranting and raving about how Cisco is immune from the Asian Flu and the network slowdown affecting their rivals. I never bought in to that and today the 10Q proves it. Eric B said the industry will grow at 20-40% but Cisco crowed 30-50% will be their growth. I would like to get some of that weed they are smoking. 2) Recent tests show the AS5300 is no where near in performance and price/port compared to MAX TNT and Total Control Hub. And now that the 56k standard will be set in 2 months there is no way the ISPs are gonna wait. That reduces Ciscos entry time into their turf. 3) Their Gigabit switch is still vaporware and many of their rivals are already delivering now and will be in 3 months. 4) In the ISP space Acend/Cascade is winning again. Unknown to most investors AT&T has chosen the Cascade CBX500 ATM switch as the building block for their internal ATM backbone. The 500 can be and will be upgraded to the GX550 (which is in beta-trial now) within 4-5 months. 5) When business slows even the mighty get affected. I am not saying Cisco does not deserve to be in the 70's but as an investor the key question is where do we go from here. This question should specially be asked by people thinking of buying Cisco. Unlike Intel (C,mon AMD is still struggling) and Microsoft, Cisco does not enjoy that much of monopoly in its markets. Its got very strong competitors and even small startups do not have a major barrier from entering into their core markets (John Chambers himself said that) as their is no universal OS to overthrow or expensive fabs to build. I would avoid a lot of falling swords and knives today. The long term picture will not get cleared up till companies hold a conference call soon else we have to wait till the earnings. I believe it will be the latter. -hitesh

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