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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 73.99+3.1%Nov 12 3:59 PM EST
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To: Cynic 2005 who wrote (23754)3/19/1999 12:34:00 PM
From: The Phoenix  Read Replies (3) of 77398
 
MMV,

So, it's a "bubble".... So we contract... that's a buying opportunity, however for Cisco to lose 70-80% of it's value - that's ludicrous...you can't possibly support this assumption with facts. When the bubble bursts... how? I'll share some thoughts.

Individual investors make up a significant percentage of the market either directly or through retirement accounts. They will/may sell some securities here to take advantage of the high valuations. This will cause a minor decline and kick off selling programs which will continue to fuel the decline. Once we retract ... at most to the 8000-8500 level (15-20%) the small buyers will come back into the premier stocks. This always happens.... at least for the past 10 years. This year will be a bit different because of Y2K and the sell-off might be a bit deeper...call it 7000 for arguments sake....a 30% delcine...which probably translates into a 40% shave for Cisco.... call it $70/share. Do you think we'll see buyers there? You betcha!! At $70/share we're looking at a forward PE of something like 30 (just a SWAG didn't do the actual calcs...).

So, please share with us why you expect to see the DOW at 3000-4000 and Cisco at $20-$30....how do we get to those levels?

BTW: Also share with my why you believe that if the bubble bursts the economy will contract? This hasn't been the case for the past 10 years. Again, people will cash in (at a profit mind you) and will re-invest again refueling the market momentum.... what will change this cycle and cause contraction?

OG
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