A Question about CSCO valuation.
Yeah, this stock has shown it can drop a lot! The question you gotta ask yourself is: do you want to ride it out? I rode it out last summer, and did fine. I tried to out guess it in November, and broke even. There has been a lot of comment on this thread from people who have guessed and lost. If we got a poor earnings report, I would use my "Russian Army" approach and reduce my holding while reinforcing some other holding. For instance, I increased my MSFT and reduced my DELL recently. I will sell and run only if the basic story changed. I will hold on a short slide. I know from experience that I will be tempted to try to out guess a protracted slide, like the one last summer.
CSCO is at $94/share which makes current P/E of 100
Hey, J.C.Reddy, this is not a shot at you, but a general comment on PE ratios. You are quoting a 100 PE at 94 a share, which means you are using a figure of 94 cents a year for earnings. "The Street.com" says it is a PE of 86.9 at a price of 96.5, which works out to earnings of 1.11 earnings a year. I used a PE I got from "The street.com" on the Microsoft thread the other day, and got called on it by Ibeex, who had a much higher figure. I have seen quotes the last few days on AOL ranging from 380 to 420. I would like to use a "forward" PE figure of one year, which would mean 00 to me, and that is what you used. I am sure we will never get a consensus on this, but I think I will at least give my source from now on. (That will at least keep Ibeex off my butt!) |
