>>>>>I have very recently been informed that I don't understand growth stocks and growth investors. Using csco as an example, would you say that a 30% growth rate merits a 100+ pe?<<<<<
AR, this is unfair. This should have been kept between you and me. I did not say that you don't understand growth stocks and growth investors. I said that the only thing that would cause Cisco to "go bust," to use your phrase, was for its growth rate to stop, that it had approximately 30% revenue growth and approximately 30% earnings per share growth, and zero long term debt. I did say that growth investors use different parameters. I did not intend you any slight, as I am aware that you are far more knowledgeable than I am. If you perceived what I said as insulting your intelligence, I apologize.
I think you are overstating the P/E ratio a little, I have seen earnings per share estimates of $1.17 for 1998, $1.45 for 1999, and $1.85 for 2000.
Mike has already stated that he thinks that Cisco's margins will be hurt by new technology, in particular he mentioned Lucent. So he agrees with you that short term Cisco is overvalued. |
