to JP: Why I believe that CSCO can outperform the S&P 500.
I submit the following points:
1. The Internet is still in its infancy, and CSCO is THE vendor of choice for routers/switches/hubs. I keep hearing that the number of people using the internet doubles every ninety days. Add to that the fact that the amount of data being accessed by each of those users is growing by leaps and bounds thanks to streaming media like audio and video clips. This all adds up to an exponential growth in the number of bits being pushed about, and CSCO is the plumber of choice for these data streams. This equals LOTS of further growth, IMHO.
2. CSCO is pushing BIG TIME into "voice over IP", AKA internet based telephony. This is a paradigm shift that is going to pay off big over the years. CSCO is promoting the concept of "webtone", this is going to eventually replace the dial tone. In other words, people are going to use the web for all communications, not just for reading web pages. Eventually TV shows won't be broadcast, they'll be posted and available at your convenience. This will take years to evolve, but remember that right now telecom sales are about $100 billion annually. Also remember that that is serving current demand, not the anticipated demand of over one billion people wanting high speed high quality internet access.
3. CSCO is also moving into the "final mile" AKA "the information driveway" AKA hardware for fast access from the home (I saw some announcements today about that). If they can execute on this they should realize good profit from it.
What can I say. I love CSCO. They have been very, very good to me. I actually find myself wondering if they might someday surpass MSFT in market cap. Wouldn't that be something? I honestly think that it is more likely that it will happen than not.
Finally, comparing CSCO to a Lexus is not really accurate. Lexus has lots of really good competition (Mercedes, BMW, Porsche, Acura, etc, etc) whereas CSCO doesn't really seem to have any competition that measures up against them. Right now Lucent is supposed to be their main competition, but the article at fool.com shows that maybe LU isn't as tough of a competitor as some may have thought. My personal take on LU is that it is a old fashioned slow moving type of a company, and IMHO CSCO is going to run circles around them. If I was going to bail on any network stock it would be that one. CSCO? Nah, think I'm gonna hang on to mine for a while longer yet. Hope this input helps.
Regards
P.S. One last thought. If / when the bubble bursts on the really speculative internet stocks (YHOO, AMZN, EBAY, etc..) all of the internet related stocks will be hit for a little while. But I personally think that once people look around at who has really performed in terms of making money off of the internet then a lot of that cash will come over to CSCO, and they will not only rebound but continue on to new highs. This is entirely IMHO, pure blue sky speculation, so please take it as such. |
