I read the same things in '87. I had ATT and MSFT before the crash, remarkably enough I lost the same percentage with both but msft had the high PE. The truth is that csco has a model that nobody has been able to beat yet. Look at Nortel's chart, it has been going down for a long time, even before the warning. As for Lucent, they are good at telecomm, but not great . csco is great for networks across the board. (Ask 3com, bay, nortel, cabletron etc. etc. etc.) If you think Internet is going to keep growing, then csco will grow 20-30% year over year for quite a while. Buffet does not see it beacuse he does not invest or understand high tech.
As to whether the Internet will keep growing, think about it, only 3% penetration in France, only 30 million people have downloaded realplayer/video/audio. In two/three years it will be 200 million people watching something important like the comedy channel over Internet. Someone has to sell the plumbing and it will not be Amazon, yahoo, netscape or any of those.
I bought csco on July 5th. 1991, I have seen the price cut in half once, have seen it gyrate a few times, if I had tried to time it using experts opinion, I would never have had what I have today.
Miguel
Caracas, Venezuela (Internet penetration around 1.2%) |
